In terms of liquidity, cash is the highest quality current asset and inventory is the lowest quality. When constructing a balance sheet, assets and liabilities are listed in a specific order. Assets are listed in descending order with cash and assets most like cash first. Liabilities are also listed in descending order with those obligations which are due soonest listed first. Current liabilities are those liabilities which must be paid within the next twelve months.
Liabilities are creditors who have provided cash to the company.
They must be paid in a timely manner in order to keep them as sources of cash. The payable should be kept current so that the supplier will provide additional inventory in the future. Net Worth Net worth simply represents the owner's investment in the company. It is treated the same as a liability in that both creditors and owners are a source of cash for the company. The owner's investment, however, is an obligation which may never have to be repaid.