An account in the current assets section of a company's balance sheet. This account contains any investments that a company has made that will expire within one year. For the most part, these accounts contain stocks and bonds that can be liquidated fairly quickly.
Investopedia Says:
Most companies in a strong cash position have a short-term investments account on the balance sheet. This means that a company can afford to invest excess cash in stocks and bonds to earn higher interest than what would be earned from a normal savings account.
Microsoft, which is always in a strong cash position, had short-term investments totaling approximately $32 billion at the end of 2005.
Related Links:
Learn this easy-to-understand technique of analyzing a company's financial statements and reports. Introduction To Fundamental Analysis
Learn about the components of the statement of financial position and how they relate to each other. Reading The Balance Sheet
Learn how the CFS relates to the balance sheet and income statement as a part of a company's financial reports. What Is A Cash Flow Statement?
Learn what it means to do your homework on a company's performance and reporting practices before investing. Advanced Financial Statement Analysis
