What are Quick Assets? You know that quick assets are the ones that are either already in the form of cash or can be easily converted into the form of cash in a short period. Some assets that can qualify as quick assets are marketable securities and accounts receivable; or equivalently, current assets excluding inventory.
As far as household budget is considered, some of the most common examples of quick assets are the bank accounts with active balances. To maintain balanced home budget, it's very important to have funds contained in a savings or checking account that can be utilized for cash purposes as and when required. Personal assets, such as jewellery that can be very easily and quickly sold on the open market, can qualify as quick assets.
As for business purpose, there're many different assets that can be considered quick assets. This includes any type of inventory that the business currently maintains. Corporate quick assets would usually consist of both raw material inventories as well as finished goods inventories. Both these assets can be conveniently sold at fair market values to generate quick cash. In majority of the countries, any balances that are currently included in the accounts receivables can qualify as quick assets. This is because the customer with outstanding invoices is supposed to pay off those balances within three calendar months after obtaining the invoices.
Benefits of Quick Assets: One of the most notable advantages of quick assets is, they can be conveniently used to settle necessary and unavoidable expenses that need to be met immediately. Besides serving as a source to manage everyday debt obligations, quick assets can prove to be a savior in an emergency situation. For instance, if you have taken a loan and after some months lose your job and don't find a new one for more than a couple of months. In such a case, it can be very difficult to manage your household expenses and complete your debt obligations on time. This is where quick assets come in. You can sell them and use the proceeds of the sale to run your house and pay your monthly installments till the time you find a new job.
It is recommended that you possess some form of quick assets. This can prove immensely helpful in the near future and can be very useful in any economic situation- from planning the regular household budget to the operating budget of an MNC.