Question

What's the difference between short-term investments and marketable securities in balance sheet？
And which type of activities in statement of cash flow do they belong to？

Answer 1

Short Term Investments are wide range of Investment which also include marketable securties . marketable Securites are those securities which can be tradeable in the market.

Short-term investments must be purchased with the intention to be sell within a period of One year.

Short term Investment includes marketable debt securities, short-term paper or marketable equity securities.

So if any investment which is easily convertible in cash within a period of one year will termed as Short term Investment which will appear in the current asset in Balance sheet.

Marketable Securities is one of the type of Short term Investments which includes government bonds, common stock or certificates of deposit.

Marketable Securities is generally traded at Stock exchange. Businesses invest excess cash into this investment to make small money and can be liqudated whenver required.

Since these kind of Securites can be easily converted into cash, in cashflow it will be a part of Cash and cash equivalents.