Current assets & fixed assets

GoldenRetreiver

Hi I wonder if someone can help me, I have been asked if on a balance sheet the current assets are a negative figure and fixed assets are positive, what does this mean? I take it that in order to achieve liquidity they should release some of their fixed assets e.g. sell, mortgage business property, in order to achieve liquidity. Could someone please tell me am I right or wrong?

Toffeemadblue

I presume you mean net current assets (CA-CL). This is a difficult question to answer without examining the profit and loss account and assessing both the extent of the liquidity problems, and the detail of the fixed assets. Is it actually feasible to realise the fixed assets? in general fixed assets are acquired because they are fundamental to the operation of the business. So I guess what I'm saying is I think it depends on other information that you have been given, not sure if I'm helping at all:001_unsure:

GoldenRetreiver

Thanks, yes you are right and yes it is a help. The fixed assets in this case I understand are the premises which do not have a mortgage neither are there any company loans, so I will bail out of this one I think and suggest they take professional advice with the possibility of taking out a loan.