What is Short-Term Investments?
An account in the current assets section of a company’s balance sheet. This account contains any investments that a company has made that will expire within one year. For the most part, these accounts contain stocks and bonds that can be liquidated fairly quickly. Read more for examples and further explanation including related video clips and also comments
Example explains Short-Term Investments
Most companies in a strong cash position have a short-term investments account on the balance sheet. This means that a company can afford to invest excess cash in stocks and bonds to earn higher interest than what would be earned from a normal savings account.
Microsoft, which is always in a strong cash position, had short-term investments totaling approximately $32 billion at the end of 2005.
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