What distinguishes fixed assets from current assets?

Fixed assets are characterized as long-term resources that a business utilizes over an extended period, typically exceeding one year. These assets include items like buildings, machinery, and vehicles, which are not expected to be converted into cash quickly but instead provide ongoing value through their usage in operations.

On the other hand, current assets represent short-term resources that a company anticipates converting into cash within a year. This category includes items like cash, accounts receivable, and inventory. The distinction is crucial for financial analysis, as it reflects the liquidity position of a business and its ability to meet short-term obligations.

The correct answer highlights this key difference between fixed and current assets in terms of their duration and liquidity, making it essential for understanding overall asset management within a business context.