Marketable securities

Liquid assets are those that can be realized almost immediately, such as cash, accounts receivable, and marketable securities. Although inventories are current assets, they must not be regarded as hquid assets because they cannot usually be converted into cash without winding up the business. 

Assets are classified as current, fixed, or intangibles. Current assets include cash, cash equivalents, marketable securities, accounts receivable, inventories, and prepaid expenses. Cash and cash equivalents are those items that can be easily converted to cash. Marketable securities are securities that a company holds that also may be converted to cash. Accounts receivable are the amounts due a company from customers from material that has been delivered but has not been collected as yet. Customers are given 30, 60, or 90 days in which to pay however, some customers fail to pay bills on time or may not be able to pay at all. An allowance is made for doubtful accounts. The amount is deducted from the accounts receivables. Inventories include the cost of raw materials, goods in process, and product on hand. Prepaid expenses include insurance premiums paid, charges for leased equipment, and charges for advertising that are paid prior to the receipt of the benefit from these items. The sum of all the above items is the total current assets. The term current refers to the fact that these assets are easily converted within a year, or more hkely in a shorter time, say, 90 days. 

Assets The list of money on hand, marketable securities, monies due, investments, plants, properties, intellectual property, inventory, etc., at cost or market value, whichever is smaller. The assets are what a company (or person) owns. 

Liquidity ratios are a measure of a company s ability to pay its shortterm debts. Current ratio is obtained by dividing the current assets by the current liabilities. Depending on the economic climate, this ratio is 1.5 to 2.0 for the chemical process industries, but some companies operate closer to 1.0. The quick ratio is another measure of liquidity and is cash plus marketable securities divided by the current liabilities and is slightly greater than 1.0. 

The accounting definition of woridng capital is total current assets minus total current liabilities. This information can be found from the balance sheet. Current assets consist chiefly of cash, marketable securities, accounts receivable, and inventories current liabilities include accounts payable, short-term debts, and the part of the long-term debt currently due. The accounting definition is in terms of the entire company. 

A mutual fund is an investment company that pools the money of many investors and invests it on their behalf. Based on a fund s stated objective, the money is invested in stocks, bonds, money market securities, or a combination of these. At the end of 2004, there were about 8,000 mutual funds with 267 million accounts worth in excess of 8.1 trillion. All investments have an element of risk. Mutual funds are no different. And, with so many choices, great care should be exercised to find a fund that is right for you. 

Assets are commonly divided into the classifications of current, fixed, and miscellaneous. Current assets, in principle, represent capital which can readily be converted into cash. Examples would be accounts receivable, inventories, cash, and marketable securities. These are liquid assets. On the other hand, fixed assets, such as land, buildings, and equipment, cannot be converted into immediate cash. Deferred charges, other investments, notes and accounts due after 1 year, and similar items are ordinarily listed as miscellaneous assets under separate headings. 

The ratio of total current assets to total current liabilities is called the current ratio. The ratio of immediately available cash (i.e., cash plus U.S. Government and other marketable securities) to total current liabilities is known as the cash ratio. The current and cash ratios are valuable for determining the ability to meet the financial obligations, and these ratios are examined... 

Only the most liquid of assets are included in this ratio, and the best ratio is usually 1 1, but this varies with the industry concerned. Table 9.12 calculates the acid-test ratio. Although the Blue company has a better current ratio than the Gold company, it does not have a better acid-test ratio, and, therefore, may have to sell its inventory at discounted prices in order to raise cash for current debt that is due. The Gold company, which did not have a favorable current ratio, does have an acceptable acid-test ratio because most of its current assets are in cash, accounts receivable, and marketable securities. 

To raise funds to purchase these receivables, the SPV issues securities in the capital markets. The SPV, however, must be structured as "bankruptcy remote" to gain acceptance as an issuer of capital market securities. Bankruptcy remote in this context means that the SPV is unlikely to be adversely affected by a bankruptcy of the originator. ... 

Presently, one-off transactions are structured in a multitude of ways, and new structures are limited only by the creativity of the professionals involved. While it is beyond this article s scope to attempt to categorize all available structures, a catalog of approaches would begin by identifying the types of capital market securities to be issued by the SPV. 

Significant economies of sode can be obtained, however, by originators such as GMAC, Citibank, and Chrysler that fiequently use an SPV to issue capital market securities. 

A balance sheet contains some real figures (e.g., cash and marketable securities), some estimated amounts or allowances (e.g., inventories and accounts receivable), as well as some fictitious figures (e.g., intangibles for which numbers are difficult to assess). 

Total Current Assets. The sum of cash, marketable securities, inventories, accounts receivable, and prepaid expenses is called total current assets. 

The cash or quick ratio expresses the ability of a company to cover from its assets an emergency. It is the cash plus marketable securities divided by the current liabilities. Atypical figure is greater than 1.0. 

V. How much cash and marketable securities were left at the end of the year ... 

Marketable Securities Accounts Receivable Inventories Prepaid Expenses Total Current Assets... 

What does this spell for security of supply In the American gas market, security comes in the form of a large array of sellers and buyers transacting in highly liquid and competitive markets for both gas and gas transport. The American gas market did not always have supply security in gas - in living memory it saw gas shortages that cost Americans billions of dollars yearly in social costs (Pierce, 1988). But the market has learned to deal successfully with extreme winter weather, California energy crises and natural disasters. Europe, in contrast, worries about the potential dominance of Russia, Algeria or Norway as gas suppliers, despite the fact that none has much more than a 20 percent share of Europe s gas sales, either now or in the foreseeable future. 

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