Marketable Securities
Liquid financial instruments readily bought or sold on public markets, providing short-term investment opportunities for excess cash while maintaining liquidity.
Marketable Securities
Liquid financial instruments that can be quickly bought or sold on a public market and are expected to be converted to cash within one year, including stocks, bonds, and Treasury bills.
For instance, a company with temporary excess cash might purchase $200,000 in government bonds or blue-chip stocks that can be readily sold if the funds are needed, while earning a higher return than bank deposits.
Marketable securities help companies maximize returns on idle cash while maintaining liquidity. Securities expected to be held for less than one year appear as current assets, while those with longer intended holding periods are classified as long-term investments. Their fair value fluctuations may affect reported earnings depending on classification.