Which type of assets usually indicates a company's financial strength?

Long-term assets are crucial indicators of a company's financial strength because they represent investments in resources that the company will use over an extended period, typically more than one year. This category includes property, plant, equipment, and sometimes intangible assets like patents and trademarks, depending on their expected longevity.

The presence of significant long-term assets can indicate that a company is invested in its infrastructure and capabilities for future growth. These assets are often less liquid than current assets, but they tend to appreciate in value or generate revenue over time, contributing to the overall stability of the company's finances.

In contrast, while current assets provide insight into a company’s short-term liquidity and ability to cover immediate obligations, they do not provide the full picture of long-term financial health. Intangible assets, although they can represent significant value, are not always easily convertible to cash and can be subject to impairment. Liabilities represent debts and obligations and are not an indicator of financial strength; instead, they signify the financial obligations the company must meet.

Thus, the presence and value of long-term assets highlight a company's capacity for sustained operational performance and financial resilience.