Finance Formulas / July 19, 2018 / Alia Marquez
Consider the following example to illustrate the concept. Assume hypothetical company BigBox has operating income or earnings before interest and taxes (EBIT) of $100 million in Year 1, with interest expense of $10 million, and has 100 million shares outstanding. (For the sake of clarity, let’s ignore the effect of taxes for the moment.)
Current assets are generally listed first on a company's balance sheet and will be presented in the order of liquidity. That means they will appear in the following order: cash (which includes currency, checking accounts, petty cash), temporary investments, accounts receivable, inventory, supplies, and prepaid expenses.
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