Which type of assets is considered necessary for a company to operate?

Fixed assets are essential for a company to operate because they represent long-term investments in the company's infrastructure and operational capabilities. These assets typically include property, buildings, vehicles, machinery, and equipment that a business uses in its production or service delivery. Their value is not only in their current utility but also in their ability to generate revenue over an extended period.

Fixed assets are crucial because they support the daily functioning of the business and are often necessary for fulfilling contracts, providing services, and manufacturing products. Without these assets, a company would struggle to maintain its operations effectively and might be unable to meet its business objectives.

Current assets, while important for liquidity and day-to-day transactions, are used primarily for operating expenses and working capital needs rather than the foundational structure of the business. Convertible and liquid assets, on the other hand, relate more to the company's ability to access cash quickly or convert investments, rather than the physical infrastructure needed for ongoing operations.