fixed assets & current assets

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GoldenRetreiver
GoldenRetreiver Registered Posts: 64 Regular contributor ⭐
in General accounting discussion
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?

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  • Brownie3
    Brownie3 Registered Posts: 45 Regular contributor ⭐
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    On a Balance Sheet you will have Non-Current Assets and Current Assets = Total Assets, both should be positive figures
  • GoldenRetreiver
    GoldenRetreiver Registered Posts: 64 Regular contributor ⭐
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    the current assets appear as a minus - which I presume means there will be insufficient cash, however, there is a healthy fixed asset amount. Is the way out of this to utilise the value of the fixed assets?
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    It is not possible for current assets to be a minus are you sure its not net current liabilities i.e current assets less current liabilities can be a minus.

    Possibly due to finance on fixed assets.
  • GoldenRetreiver
    GoldenRetreiver Registered Posts: 64 Regular contributor ⭐
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    Yes sorry it is net current assets. Apparently there is no finance on the fixed assets i.e. they own the premises outright with no mortgage, so would it probably be one option to take out a loan etc against the fixed asset, which I realise will increase the liabilities but would free off available cash

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