The first asset subgroup is current assets, and the first liability subgroup is current liabilities. Current assets generally are cash or will become cash within a year. Current liabilities are obligations that must be paid within a year. These items get prominent attention by being at the top of the balance sheet. Locating the current assets and current liabilities in this way ensures that the reader can quickly get some assessment of the liquidity of the firm.
Investments are primarily securities purchased as a long-term investments.
Securities purchased for short-term interest or capital appreciation are included in the current assets. Intangible assets, although frequently not included on the balance sheet, are shown with the assets when accounting rules permit them to be included on the balance sheet. In addition to current liabilities, the firm also typically has obligations that are due more than a year from the financial statement date and are called long-term liabilities. The stockholders' equity consists of contributed capital and retained earnings. Contributed capital represents the amounts that individuals have contributed to the firm in exchange for shares of ownership such as common or preferred stock.