Asset

“ It is a valid asset—a tangible security for one's money—from a business point of view. And Americans or foreigners like myself and my niece, for instance, are securing substantial property and equal return, when we bring large fortunes in our marriage settlements to this country. ”

“ In the interest of conservatism and as producing certain other desirable results which will be brought out as each asset is examined in detail, cost price, if lower than market, is deemed the desirable basis for the valuation of this group. By way of explanation, it should be said that working capital as used here is the difference between current assets and current liabilities and so represents the portion free to be put to the further pursuit of business. ”

“ Fixed assets are those permanent forms of property which are a necessary part of the equipment used for conducting the business—such as real estate, buildings, machinery, etc.
Active or floating assets are those forms of property of which the quantity in our possession varies from day to day—as merchandise, accounts, cash, etc. ”

“ If the capital liabilities exactly balance the property assets, it is plain that the surplus will exactly balance the net quick assets. If the surplus is smaller than net quick assets, it is usually a sign that capital liabilities have been created to provide working capital. ”

“ When property rights fall into definite shape and the price system comes in, and more particularly when the practice of investment arises and business enterprise comes into vogue, such differential advantages take on something of the character of intangible assets. ”

“ Investment is a pecuniary transaction, and its aim is pecuniary gain,—gain in terms of value and ownership. Invested wealth is capital, a pecuniary magnitude, measured in terms of value and determined in respect of its magnitude by a valuation which proceeds on an appraisement of the gain expected from the ownership of this invested wealth. In modern business practice, capital is distinguished into two coördinate categories of assets, [Pg 353] tangible and intangible. ”

“ Capital assets are fixed assets—the plant and those assets in which the capital must first be invested before revenue can accrue. When the group of capital liabilities is shown it usually includes both the long-term obligations incurred for raising capital as well as the capital stock. This unfortunately does not recognize a distinct section for the net worth items. ”

“ Every effort is offset by the cost of that endeavor, and unless the result of the effort be more than its cost, its aim, viz., the increase of net worth, is not accomplished.
Relation between Profit and Loss and Financial Elements.—These income-producing efforts are the agencies that bring about the changes in the values of assets and liabilities. Expenses and costs are incurred for the purpose of securing income. Every expense or cost that is settled causes a diminution of business assets, usually of the asset cash. ”

“ Sources of Capital.—From an accounting viewpoint, the capital of any business enterprise is the excess of its assets over its liabilities. Usually, the main fund of capital is secured by original contribution. In a partnership, the partners’ investments provide the common partnership fund. Thereafter, additions to the capital may be secured in several ways:
1. Profits may be left in the business instead of being withdrawn. ”

“ The Head Rifler of an insolvent bank, learning that it was about to be visited by the official Noser into Things, placed his own personal note for a large amount among its resources, and, gaily touching his guitar, awaited the inspection. When the Noser came to the note he asked, “What’s this?”
“That,” said the Assistant Pocketer of Deposits, “is one of our liabilities.”
“A liability?” exclaimed the Noser. “Nay, nay, an asset. That is what you mean, doubtless.”
“Therein you err,” the Pocketer explained; ”

“ These liabilities are in turn supported by the assets of the business men. If we continue to follow up the ultimate basis of the bank's liabilities we shall find it in the visible tangible wealth of the world. ”

“ It makes no difference whether it involves a quantity of goods entrusted in natura to a travelling merchant, the proceeds of which may consist in other goods in natura acquired by trade, or whether it involves a manufacturing enterprise, the assets of which consist of buildings, machinery, cash, raw materials, partly and wholly manufactured goods, which are balanced against liabilities. ”

“ Such goods, material items of wealth, are "assets" to the amount of their capitalisable value, which may be more or less closely related to their industrial serviceability as productive goods. "Intangible assets" are immaterial items of wealth, immaterial facts owned, valued, and capitalised on an appraisement of the gain to be derived from their possession. ”

“ Some types of undertakings are more subject to the effects of wasting assets than others. Concerns dealing in investments, insurance of all kinds, brokerage and commission, manufacturers’ agents, banking and financial houses, professional firms, and the like, only a small portion of whose capital is tied up in fixed assets, are comparatively unaffected by the charge for depreciation. ”

“ Before leaving the subject of net quick assets, it is well to note the importance of the figure showing the actual amount of current liabilities. If a company has outstanding large amounts of bills and notes payable, it occupies a vulnerable position. ”

“ Since we began, our capital had increased from the sum of twenty-eight thousand dollars, as the reader will recollect, to one hundred and thirty-eight thousand seven hundred and sixty dollars in stocks and assets, after deducting all probable bad debts and what the firm owed. ”

“ As a sub-group under Current or as a separate group we find Working and Trading assets. Other groups are Fixed or Capital, Investments, Sinking and Reserve Fund Assets, Deferred Charges to Operation, Deferred Assets, Deferred Debits, Suspense Debits, with similar titles for corresponding credit items, Contingent Liabilities—in short almost any title which seems best to fit the needs of the particular case. ”

“ I call those first-rate which are composed of treasures one possesses under one's hand, such as mines, lands, and funded property, in such states as France, Austria, and England, provided these treasures and property form a total of about a hundred millions; I call those second-rate fortunes investments in manufacturing enterprises, joint-stock companies, viceroyalties, and principalities, not drawing more than one million five hundred thousand francs, the whole forming a capital of about fifty millions ”

“ The capital is not an ideal, fictitious, arbitrary sum of meney set down in the articles of association, but, in the theory and practical operation of the system, is composed of substantial property, and which gives value and solidity to the stock of the institution. ”

“ Presumptively all the property of the corporation or company is held and used for the purposes of its business, and the value of its capital stock and bonds is the value of only that property so held and used. ”

“ The immediate supply of loanable funds is indeed a matter of great importance, but before any economic interpretation of that condition be made it is essential to examine the sources of those funds.
Underlying everything is wealth, which in the economic sense is physical property, either in the form of land, buildings, railways, machinery, etc., and stocks of commodities. A relatively small element of wealth is the physical property that we know as gold. ”

“ It is not less difficult to pronounce how far the effect of any given quantity of money, as capital, or in other words, as a medium for circulating the industry and property of a nation, may be increased by the very circumstance of the additional motion which is given to it by new objects of employment. ”

“ We live under the dominion of capital, that is to say, of property other than land, or rather, perhaps, of an accumulated, and still accumulating, interest or dividend-bearing essence of all property (which is labour stored up in some material) , 107reconvertible at will, for productive purposes, into land, labour, or anything men have of exchangeable value. This mighty essence of all property is within the reach of us all, in proportion to our respective opportunities and abilities, and the efforts to gain possession of it we choose to make. ”

“ But the harlots have another kind of capital which you, my blind practical friend, don’t call ‘Property’; but which I, having the use of my eyes as well as of my hands, do. They have beauty of body;—many of them, also, wit of mind. And on these two articles of property, you observe, my friend, being much more their own, and much more valuable things, if they knew it, than china and timepieces—on these they [318] do make an annual income, and turn them over, as you call it, several times perhaps in the year. ”

“ The Inventory of Movable Property or Securities—The capital represented by movable properties, stocks, bonds, shares, etc., is the only kind of capital which lends itself to statistics—The great groups of movable properties: National Funds, Railway Shares, Insurance Companies, Foreign Banks, Mortgage Companies, and agricultural and industrial undertakings. ”

“ A thousand men contribute to the production of $1,000,000 of wealth, all of which is gobbled up in a few weeks or months by the scheming of a single “financier.” The board of directors of a railroad, a mining company or a manufacturing company, may issue to themselves certificates of watered stock for which [98] they pay not a cent, and which represent wealth having no existence, but which they are in a position to compel the public to make good. ”

“ They came to understand that property is a [114] physical actuality, the result of some form of labor; that capital is that portion of the results of production which can be reserved and made available for new and further production; that money is an instrumentality for facilitating the distribution and use of capital and the interchange of products and services; that production alone buys production ”

“ It includes money in the hands of individuals employed in a similar way, invested in loans, or in securities for the payment of money, either as an investment of a permanent character, or temporarily with a view to sale or repayment and reinvestment. In this way the moneyed capital in the hands of individuals is distinguished from what is known generally as personal property. ”

“ The agents of production, land, capital, and labour, derive their value from the value of their products, ultimately, therefore, from the utility of those products. As stock is valued by the expected dividend, so is the field by the expected crop. ”

“ In the second, I have endeavoured to explain the nature and operation of money, considered as a particular branch of the general stock of the society. The stock which is accumulated into a capital, may either be employed by the person to whom it belongs, or it may be lent to some other person. ”

“ Under the head of Capital will be considered, at a fair rate of valuation, Stock of every description, all Implements of Husbandry and other articles, which may be applicable to the purposes of productive Industry, or which may be necessary for the establishment of the Settler on the land where he is to be located. ”

“ Capital's contribution to industry is in the nature of material substance loaned by way of investment. Its possessor may be any kind of person, from a social parasite or ne'er-do-well, who is the inheritor of a fortune, to an infant totally incapable of any service to industry, and whose property is necessarily held in trust. ”

“ Unless it can be seen to possess inherent value entirely apart from the earning capacity of the subsequent investment or from the actual earnings resulting from such investment, the value asserted or claimed is but a duplication of that derived from the use of the tangible property when so invested. ”

“ I want you to learn, so far as is possible for a woman, the care of [Pg 17] property. These newspapers and reports will help you somewhat. I shall be glad to answer all your questions, and will keep you supplied with the latest intelligence relating to your property; for I give you these stocks and bonds to use as you see fit. You will find a cheque-book and a bank-book inside. One must learn to appreciate the value of money in order to use it well. I would not advise you to change your investments at first without consulting me. ”

“ It will seem to you that I propose to make away with your property before you have even come into possession of it.’ He laughed. ‘But, in fact, what I have in mind is merely an investment for your capital, and that an admirable one. Five thousand pounds at three per cent.—one doesn’t care to reckon on more—represents a hundred and fifty a year. ”

“ Embraced in the rule I have presented in the beginning, never to tax anything that would be of value to your State, that could and would run away, or that could and would come to you, are two or three kinds of movable property which I regard as most important, and which I will mention—to wit, money, merchandise, and capital to be used in manufacturing. ”

“ We have no occasion to consider under what circumstances a court of equity may, through appointment of receivers and judicial sale, lend aid to protect the interests of creditors and effect a reorganization of an insolvent corporation. [7] Nor need we consider under what circumstances a court of equity may, because the assets of a corporation are ample to meet all liabilities but cannot then be immediately converted into cash, properly appoint receivers in order to preserve values and prevent unequal treatment of creditors. ”

“ The so-called money value of real or personal property is but a conveniently short method of expressing present potential usefulness, and 'investment' becomes meaningless if construed to mean what the thing invested in cost generations ago. Property, whether real or personal, is only valuable when useful. ”