Property, plant, and equipment are long-term assets vital to business operations. Property, plant, and equipment are tangible assets, meaning they are physical in nature or can be touched; as a result, they are not easily converted into cash. The overall value of a company’s Property, plant, and equipment can range from very low to extremely high compared to its total assets.
Key Takeaways:
- Property, plant, and equipment are long-term assets vital to business operations and the long-term financial health of a company.
- Property, plant, and equipment are also called fixed or tangible assets, meaning they are physical items that a company cannot easily liquidate.
- Purchases of PP&E are a signal that management has faith in the long-term outlook and profitability of its company.
Examples of property, plant, and equipment include the following
- Machinery
- Computers
- Vehicles
- Furniture
- Buildings
- Land
