How Do You Know What Are Assets?

Like demand and supply, you've probably heard about assets and liability in one context or another. These terms are often used in economics and business to describe what a person, company, or government owns versus what they owe. 

How Does an Asset Work?

Whether you're a business owner, an investor, or a consumer, understanding how assets work is essential to achieving financial success. 

Fixed Asset

These are long-term assets used to produce income and do not easily convert into cash. If you own or control a business, fixed assets such as real estate, machinery, or equipment allow you to generate revenue. 

Liquid Asset

These are assets you can easily convert into cash. In contrast to fixed assets, liquid assets are used when you need to cover your day-to-day expenses or an unexpected financial emergency. 

Tangible and Intangible Asset

An example of an intangible asset is intellectual property, such as patents or copyrights, that allow companies to protect their ideas and make money from them. Examples of tangible assets include physical property such as land, buildings, and equipment.

How to Determine the Value of Your Asset

You can do this by comparing current and historical values, looking at asset performance and activity trends, or using other analytical methods to evaluate your assets. 

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