Permanent Current Assets

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permanent current assets

The minimum level of current assets that a firm needs to continue operation. Because some level is always maintained, they are called permanent current assets.

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The current assets a firm needs in order to continue operations. Examples include inventory and perhaps rapidly depreciating assets such as computers. These assets are current because they do not remain assets for longer than a year, but they are permanent because they must be replaced with similar assets. Despite the seeming contradiction in the name, they are called permanent current assets because every company must permanently maintain a certain amount in current assets in order to exist.

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