Core assets

Core assets
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Core assets are the assets without which the company would not be able to generate profit. Core assets are profitable components of a business and form the fundation of an investment portfolio. Assets may be a physical or non-physical things. It depends on the type of industry. They include all valuable and important property of the business that help in gain benefits. In every business some assets are so essential that are called core assets. Maintaining the amount of equity at an appropriate level often determines the stable and long-term development of the company.

Analysis of core assets is one of crucial points of company analysis. If the core assets are old, require renovation or investments, the company can be unable to compete on the market. In case of financial problems, core assets should be the last to be sold because without them the company can not function property. Basic assets help the company stay viable and they are necessary to carry out business strategy in company. Company which sell off their core assets is on the fastest way to bankruptcy or dissolve their achievements. The company should own them or lease them in order to operate in certain industry. (Yu Q., Miche Y., Séverin E., & Lendasse, A., 2014, 296-302)

Keeping core assets on optimal level should be part of every business strategy. Companies should plan how many core assets will be required in following years and plan how to obtain them. Core assets are things reusable. All business activity is based on them. (Lee K., Kang K. C., & Lee J., 2002, p.1-2)

Typical core assets are:

The core assets in one industry can be normal assets in another.

Examples of Core Assets[edit]

Different business have different core assets. It depends on the industry or geographic region of enterprise. What is core assets in one company can be non core assets in other business. For example in a company that produces clothes the core assets are sewing machines, dressmakers and textile. Without these things, the company could not function.

Investors and analysts are watching core assets in company. This helps them decide to invest money or not. Worrisome trends or changing the structure in core assets is important information for them. Usually long-term capital finances core assets in company (for example bonds). We use term „core assets” to describe the Basic functional part of assets that built details of the core. Asset management system monit details of the core. (Reinhartz-Berger I., Tsoury A., p.1-3)

Core assets are profitable components of a business and form the fundation of an investment portfolio. Equity constitutes a very important economic category for every enterprise. They ensure financial stability, high guarantee for creditors and provide a solid basis for financing.


See also:

References[edit]

Author: Iwona Tuleja