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.