What is the Total Assets Formula?

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on January 11, 2021

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 which 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.

What is the Total Assets Formula FAQs

Total Assets = Non Current Assets + Current Assets
Assets are anything that the company owns, has economic value, and can be converted to cash.
How quickly an asset can be converted to cash or a cash equivalent is a term called liquidity.
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.