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Is stock price a current asset or not?



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Hi Binny,
Regarding the question on Stock Price being a current asset or not, I am confused because according to me if a company wants to liquidate its stocks then the current stock price will be considered and on that basis the current asset will be determined. Where am I going wrong?

1 Answer(s)


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Hi, There are 2 kinds of reference to shares on a companys balance sheet. In the current assets section there is the shares of other companies that it holds for investment purposes. So everytime current assets is calculated we typically take into account the most recent share price.

The second reference to shares is in the "Shareholders equity" section. These are shares of the company itself and it is always represented as book value and not market value and hence no market share price is involved.

Does this make sense?

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