What is a company asset?

Question

Zippia Team · Accepted Answer

A company asset is either a physical or intangible item that delivers value to a specific company. Company assets give value to companies because they can be utilized to produce goods or products, fund company operations, and generate profit and drive growth.

Here are some examples of physical items that might be considered company assets:

Machinery
Cash and other monetary assets
Manufacturing facilities
Company vehicles
Property (buildings, factories, etc.)
Raw materials
Company inventory

And here are some examples of intangible items that might be considered company assets:

Intellectual Property (IP)
Patents or product designs
Marketable securities
Trademarks
Distribution rights
Royalties
Other forms of IP

Company assets are a vital component of a specific organization's net worth. Companies benefit from having a lot of assets in many ways, like when trying to secure a loan from a lender.

Lenders are more apt to issue loans to companies that hold a lot of assets because, in the event of a default or non-payment, the company can liquify its assets to pay off the loan balance.

Assets are also valuable because they can generate revenue, or be turned into cash if a financial scenario calls for this. Assets are also one of the key components of a company's balance sheet, which is a critical financial document.