Definition: Assets with long lives.
Example: Furniture, buildings, land, and equipment.
Why It’s Important: Fixed assets usually require cash flow planning to build the cash needed to buy them. If borrowing money for fixed assets, use loans with a similar term as the asset. You may not have enough cash to pay back a short-term loan that’s due before a fixed asset is sold or has had time to produce cash for your company.« Back to Glossary Index