Short-term assets are also known as current assets and refer to those company belongings that have a low shelf-life. These include cash, securities, accounts receivable and expenses like rent. It helps describe how liquid the company is and how it plans to fund its ongoing operations on a day-to-day basis.
For example…
Jack’s accounting and tax agency calculates its short term assets and realises that they mainly consist of cash and accounts receivable. To help increase his firm’s liquidity, he decides to purchase securities and several short term investments. This in turn adds to the firm’s short-term assets.
