Introduction:
Fixed assets are one of the primary pillars of any businesses and it represents a significant section of the balance sheet with a huge amount of net worth. They are intangible in nature, along with this, they form the basis of the entire organisation, which makes them indispensable to the business. Through this report, the importance of plant and equipment’s towards a business has been established.
Discussion:
Fixed assets consists of Plant, equipment, machinery, along with other assets as well. They help the business in ensuring study supply of products and services, helps in making the ancillary products required by the business. Plants and machinery plays a key part in financial planning and analysis of the company’s operations and future capital expenditure (Shi, 2015). They are tangible in nature and provide a certain amount of economic return to the business, which exceeds a single operating cycle. They help in providing two most important things in the form of quality products at a short span of time and timely production of better quality products and goods, which helps the company, remain competitive in the mark (Tauringana, & Adjapong Afrifa, 2013). This helps the business, of having an edge over its immediate competitors in the business.
Conclusion:
Thus, it can be concluded that plant, machinery and equipment’s are some of the most important aspects of any businesses as it provides the base for the production of the products, which the company or the business has to offer.
References:
Shi, S. (2015). Liquidity, assets and business cycles. Journal of Monetary Economics, 70, 116-132.
Tauringana, V., & Adjapong Afrifa, G. (2013). The relative importance of working capital management and its components to SMEs' profitability. Journal of Small Business and Enterprise Development, 20(3), 453-469.
