Assets

An asset can be cash, a receivable, inventory, a factory, a brand, or a right-of-use lease. The test is control and a probable future benefit, not physical form.

Assets are recorded at cost, amortised cost, or fair value depending on the item. The balance-sheet total is not the market value of the company.

Growing assets should eventually support growing profit. Assets that rise faster than sales for a long stretch are a sign of idle capacity, unsold stock, or uncollected bills.

Intangibles and deferred tax assets depend on future profit that may not arrive. A large asset number is not strength if much of it cannot be sold or does not earn its cost of capital.