Companies that are publicly traded make their annual financial reports available to the public once they have been completed. A review of the Kroger Company's 2012 financial report, more specifically the income statement and the balance sheet, will show where those finances are coming from and going.
The assets on the Kroger Company's 2012 Balance Sheet are listed in the correct order. They are listed as follows: Cash and temporary cash investments, Deposits in-transit, Receivables, FIFO inventory, LIFO reserve, Prepaid and other current assets, Property, plant and equipment, net, Goodwill, and Other assets (Kroger Co., 2012). They are classified as current assets, property, plant and equipment, net, goodwill, and other assets. The cash and cash investments, deposits, receivables, inventory, and prepaid assets are listed as current assets. .
Assets are to be listed in order of how liquefiable they are. Current assets are always first because they are what the company has right at that moment. Cash is to be listed first and is already a liquid asset. Deposits in-transit are listed next because they will become cash, they just have not reached the bank yet. Receivables are next. This is any income that is still owed to the company and will be paid at a later date. Inventory is listed next because it is income that has yet to be earned. Once the inventory is sold, it becomes a cash or receivable asset. Prepaid assets such as insurance are listed next. These are prepaid services for the company. At this point you will typically see a subtotal for the current assets, and it will be followed by the other company assets.
Other assets are listed after the current assets because they are typically long term, or intangible assets. Property and equipment are listed next. These assets are liquefiable, but typically used as a last resort for income because they are essential to the company being able to operate.
