Distinguish, differentiate, compare and explain what is the Difference between Real and Financial Assets. Comparison and Differences.
Difference between Real and Financial assets
1. Real assets represent tangible possessions. Financial assets represent intangible possessions.
2. Real assets have lesser liquidity. Financial assets have more liquidity because they can be easily converted to cash.
3. Generally, real assets take more time to dispose of or sell. Financial assets are easily disposable.
4. Over a period, real assets lose its value Financial assets will provide continued growth and increased value.
5. Real assets are used to produce products and services to generate revenue. Financial assets use the income to purchase real assets that offer revenue.
6. Examples of Real assets: Machinery, and production equipment. Examples of financial assets: Stocks and bond.