Definition of Marketable Securities

Marketable securities are financial instruments that the companies use to convert them into cash at a short notice. Normally these securities can be equity-related or debt related. The purpose of holding these securities as current assets in your balance sheet is to support the urgent need for cash. That is why they are held for trading purposes and can be sold on public exchanges like a stock exchange or bands exchange whenever needed.


The businesses can keep or invest the idle cash somewhere it seems fit. It is considered as a smart cash budgeting technique to invest idle cash resources into marketable securities for short term earnings as the marketable securities mature within one year.

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