Total Assets Formula

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on April 11, 2024

Formula for Total Assets

Total assets formula can be defined as:

Total Assets Calculation

Assets are anything that the company owns, has economic value, and can be converted to cash.

Current assets are assets that are expected to be converted to cash within one financial year, while non-current assets are held by a company for more than one year, and are not readily convertible into cash.

Liquidity of Assets

How quickly an asset can be converted to cash or a cash equivalent is a term called liquidity.

The most liquid asset is cash itself, while non-liquid assets include things such as real estate, machinery, or land because they cannot be converted quickly to cash.

Total Assets on a Balance Sheet

Total assets from a company are typically presented on a balance sheet, where the total assets must be equal to the sum of total liabilities and stockholders’ equity combined.

The liabilities and shareholders’ equity show how the assets of a company are financed.

Total Assets Meaning

This accounting equation ensures that a company’s balance sheet remains balanced, and is the foundation for the “double entry system” in accounting.

Total Assets Formula FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.