Marketable Securities – Current Assets in Financial Accounting

Many firms experience uneven cash flows during a year. Department stores, for example, make a large portion of their sales during November and December, resulting in significant cash inflows. In many instances, such large amounts of cash are not immediately needed to fund operations. Many firms elect to put excess cash balances into short-term investments. These investments, known as marketable securities, typically produce higher earnings than those available from bank accounts, thus enabling firms to increase their earnings.

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