Definition:

Other Current Assets (OCA) are a category on a company's balance sheet that represents assets expected to be converted into cash or used up within one year, which do not fit into the standard current asset categories like cash, accounts receivable, or inventory.

Examples

Examples of Other Current Assets include prepaid expenses, short-term investments, and advances to suppliers.

Formula:

There is no specific formula for Other Current Assets, as it is a category that aggregates various short-term assets not classified elsewhere.

How to use the metric:

Other Current Assets can be analyzed to understand a company's liquidity and operational efficiency. By examining the components of OCA, investors and analysts can gain insights into how a company manages its short-term financial obligations and resources.

Limitations:

The category of Other Current Assets can sometimes be a catch-all for miscellaneous items, making it less transparent. This can obscure a clear understanding of a company's financial health if not broken down into specific components.

Applies to:

Other Current Assets apply to all industries, as every company will have some form of short-term assets that do not fit into standard categories.

Doesn't apply to:

There are no specific industries where Other Current Assets do not apply, but the relevance and composition of these assets can vary significantly between industries based on their operational nature.

Summary:

Other Current Assets are a diverse category on the balance sheet that includes various short-term assets not classified under standard headings. They provide insight into a company's liquidity but can lack transparency if not detailed. This metric is applicable across all industries, though its significance may vary.