Knowing the breakdown of current vs. non-current assets helps assess a company's financial health in several ways:
Short-term liquidity: A healthy balance of current assets ensures a company can meet its short-term obligations like paying bills and covering operating expenses.
Long-term solvency: Non-current assets represent a company's long-term investment and contribute to its future earning potential.
Efficiency: Analysing how efficiently current assets are managed (e.g., inventory turnover) provides insights into operational effectiveness.