Cash and marketable securities management, Finance Basics

Cash and Marketable Securities Management

The management of marketable and cash securities is single of the key areas of working capital management. Because cash and marketable securities are the firm's most liquid assets, they offer the firm along with the ability to meet its maturing obligations.

Cash refers to cash in hand and cash on demand deposits or current accounts. Therefore it excludes cash in time deposits that is not instantly available to meet maturing obligations. Marketable securities are short-term investments made with the firm to acquire a return on temporary idle funds. When a firm realizes such as it has accumulated more cash than required, it often puts the excess cash into an interest-earning instrument. The firm can invest the excess cash in type of or a combination of the given marketable securities.

  • Government treasury bills
  • Agency securities like local parastatals securities or government's securities
  • Banker's acceptances that are securities, accepted through banks
  • Commercial paper or unsecured promissory notice
  • Repurchase agreements
  • Negotiable certificates of deposits
  • Eurocurrencies and so on.
Posted Date: 1/31/2013 7:58:58 AM | Location : United States







Related Discussions:- Cash and marketable securities management, Assignment Help, Ask Question on Cash and marketable securities management, Get Answer, Expert's Help, Cash and marketable securities management Discussions

Write discussion on Cash and marketable securities management
Your posts are moderated
Related Questions
Explain the Giving Margin Money to Broker Marin  is  the  amount  of  money  which is provided  by customer to the brokers who have agreed to trade their securities. It may

Tests of Term Structure of Interest Rates Theories Various tests have been conducted mainly in USA and they show that all the three (3) theories have some validity and therefo

Example of Asset Based Valuation Extracted information from the books of Kent Limited.   Current liabilities Bank overdraft    Sh. 300,000

Explain the method of Offer of Sale Method of offer of sale consists in outright sale of securities through intermediary of issue houses or share brokers. In other words, sh

Suppose an entrepreneur owns a firm that has a production technology that generates the following revenue: R(e) = e 2 +100e where revenue depends on his effort level e. The monetar

Matching Approach - Financing Current Assets This approach is further referred to as the hedging approach. Beneath this approach, the firm adopts a financial plan that involve

how can I get?

Limitations of Middle Asia Stock Exchange Index 1. The twenty (20) company's sample whose share prices are utilized to calculate the index are not true representatives. 2.

explain the financial planning process in a private limited company

a bond that has a 1000 per value and a contract or coupon interest rate of 12.8%. The bond is selling for a price of $1125 and will mature in 10 years. The firm''s tax rate is 34%