# How to Calculate Your Total Available Assets

Camino Financial26 Feb 2024

## How Do You Calculate Your Total Available Assets?

Certain assets, like cash and accounts receivable, will have clear values. However, other tangible assets, like company cars or real estate, might not have a specific value. For these items, you can use the purchase price if the item was purchased recently. Otherwise, you can get a professional to appraise your property for a more accurate value. Assuming you have already recorded all of your assets, all you have to do is look at the value of each asset on your balance sheet and add them all together. It’s that easy! Once you’re done, you’ll have a clear understanding of what assets you own and how much value they add to your business. Calculating your total available assets isn’t too difficult once you understand what assets are and how to categorize them (keep reading to better understand these topics). It’s kind of like gathering up all your kids’ toys.

### Why Calculating Your Total Available Assets is Important

Why is calculating your total available assets important? Why bother putting in the effort? Aside from the importance of understanding your business’ financial status, there are a number of situations in which knowing your total available assets may be necessary. For example, you may need to know the total value of your assets if you:
Additionally, knowing the total value of your assets tells you how much cash is tied up in your company. So, if you are having cash flow issues, you can see whether or not you should sell any of your assets to generate some extra cash for your business. Moreover, if you’re getting ready to retire, you may decide to sell your business. In this case, adding up the value of your assets and subtracting your liabilities is a standard way of determining the value of your company before selling it. Ultimately, learning how to calculate your total available assets will help prepare you for a variety of situations you might face as a business owner.

## What Are Assets? What Are Total Available Assets?

### What Are the Different Types of Assets?

Assets can fall into a variety of categories depending on your preferred method of keeping track of them. Common assets categories include:
• Cash: This includes petty cash as well as all the cash in your business’ bank account.
• Accounts Receivable: These are your unpaid bills, which can be sold for financing.
• Liquid Assets: Liquid assets are anything that can be sold quickly for cash, like stocks.
• Fixed Assets: Fixed assets are assets that take longer to sell for cash, like real estate and office equipment.
• Intangible Assets: These are nonphysical assets, like stocks, bonds, royalties, etc.
• Tangible Assets: Tangible assets are all of your physical assets, like supplies, equipment, vehicles, and similar items.
Classifying assets based on shared qualities will make it easy to keep track of them. Basically, anything that can be converted to cash should be included in your asset inventory.

## How Do You Record Assets on a Balance Sheet?

For the most part, you’ll want to divide your assets into two separate categories: current and long-term assets. Current assets are assets that may be used or sold within a year. These are usually your liquid assets. For example, cash and accounts receivable would typically count as current assets. Everything else counts as a long-term asset. If you own your office building, that’s a long-term asset. Vehicles and equipment would also be included in this category. Once you divide your assets into current and long-term assets, you should record your assets on a balance sheet based on liquidity, or how easy it would be to sell the assets. For current assets, cash is typically at the top of the balance sheet, followed by accounts receivable, short-term investments, inventory, etc. For long-term assets, your office building might be at the top of the balance sheet, followed by other tangible assets, then intangible or fixed assets.

## How to Keep Your Assets Safe

Many small business owners that are in need of extra capital end up getting secured loans. These types of loans require you to put up collateral (the collateral will take the form of your business assets). The problem is, that if at any point you can't pay off the loan, the bank or financial institution can seize your assets to sell them and recoup their losses.

From your company’s bank account balance to your office equipment, it’s important to keep track of all of your business’ assets. Knowing how to calculate your total available assets is a great way to stay on top of your company’s finances and prepare for the future. By following the tips mentioned above, you can learn how to record and calculate your assets quickly and easily. Want to learn more about how you can set your small business up for success? Subscribe to our weekly newsletter: at Camino Financial we help small business owners like you improve their financial performance by providing free resources, tips, and materials. ADD_THIS_TEXT