what is a hard asset 
a hard asset refers to a tangible asset or resource with fundamental value examples of hard assets include a fleet of trucks for the delivery of consumer goods land real estate and commodities businesses purchase hard assets to help improve production increase revenues and act as a buffer against soft asset losses however sometimes the value of hard assets decreases in tandem with the value of soft assets understanding hard assetshard assets are usually fixed assets meaning they re long term assets that aid in the production of a company s goods and services fixed assets have a life of more than one year hard assets are typically classified as property plant and equipment on a company s balance sheet some examples of hard assets include however hard assets can also be short term assets called current assets which are typically used up within one year inventory for example could be a hard asset for a company if a company manufactures machinery the raw materials or inventory such as the machine parts would be hard assets hard assets that are fixed assets usually involve capital investment decisions for a company s executive management team these assets usually involve a large outlay of cash or capital and as a result are considered long term funding decisions the funding for big ticket hard assets can come from banks venture capital firms issuance of corporate bonds or debt as well as issuing new shares of stock the capital investment of hard assets such as a new manufacturing plant means the company plans to use the facility for many years to generate revenue hard assets are considered particularly valuable because they can be used to produce or purchase other goods or services they can also be sold to generate cash in the event the company has financial difficulties when analysts calculate a company s intrinsic value a portion of this underlying value is derived from the value of its hard assets the intrinsic value of a company is a calculation of a company s value using various models that include analyzing a company s cash flow assets future revenue streams and its cost structure hard assets come into play when valuing a company since they can be sold for cash to pay off debts bondholders and shareholders in the event of financial distress or liquidation hard assets vs intangible assetshard assets are the opposite of intangible assets which are non physical assets that are used over the long term examples of intangible assets include technology companies tend to have many intangible assets since they have patents for their products as well as significant capital tied up in research and development on the other hand oil producing companies have many hard assets such as oil rigs and drilling machinery ford motor company nyse f is a us automotive company that produces various cars and trucks the company s executive management team is looking to buy new machinery for their assembly line the company will also purchase steel and aluminum for the rivets all of the assets the machinery steel and aluminum are considered hard assets the assembly machinery is a long term hard asset on the other hand the steel and aluminum raw materials are current assets since their inventory will likely be used up within one year also any patents on the equipment are considered intangible assets 