Wall Street Words word of the day = Asset
Hello YouTube, Todd Ault here, and Welcome to Wall Street Words! Today's Wall Street term is "Asset"
If you're a company and you own a business, inside that business is an asset like a barbershop or an ice cream shop or a machine, that's an asset. It has some sort of value because in the future it will produce future value. Now, you can look at a manufacturing facility or some sort of technology you own, even a patent can be an asset. Assets are designed to help the company benefit with future earnings. Now, the size of the assets of the company, they call it asset light or asset rich. If you're an automotive company and you make cars, well, you need a lot of assets. Let's talk about Uber, as an example, of an asset. Uber's asset could be the drivers, right, but they use the app. So, the app is the asset and the drivers are additional assets but they can come and go. Drivers can sign up and they can quit. But the asset, meaning the app, is worked on by technologists and becomes more valuable later. They can add features and benefits to it. If you're a manufacturer and you have a big plant, you can add new tools and dyes and things that make it more efficient. Assets are the driver of a company's balance sheet and the driver of their future earnings. Today's word is "Asset."
Definition - A resource with economic value that an individual or business owns or controls with the expectation that it will provide a future benefit. Assets are bought or created to increase a firm's value or benefit the firm's operations. An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses, or improve sales, regardless of whether it's manufacturing equipment or a patent.
Assets are listed on a firm's balance sheet and include tangible items such as inventories, equipment, and real estate as well as intangible items such as property rights or goodwill.
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