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What is the Importance of marketable securities in financial management?
Wiki User
∙ 15y ago
For companies that are financial institutions (banks), and insurance companies, Marketable Securities are a significant portion of their income. Depending on the industry of other companies, this line item on the Balance Sheet should be relatively small. For example, manufacturing companies might have some Marketable Securities, but this figure should pale in comparison to their inventory, and plant, property and equipment figures.
Wiki User
∙ 15y ago
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What are the importance of financial management in a business organisation?
Financial management ensures that a business is monitoring their finances. Financial management involves setting budgets and ensuring that departments remain on budget throughout the year.
What is the importance of credit management?
Credit management is vitally importance for a successful financial future. Good credit can ensure better loan terms, higher credit limits, and greater availability to financial products.
What is the definition of a liquidity ratio?
Liquidity ratio are designed to test a company's ability to meet its short-term financial obligations. To find the ratio, you take Cash and Cash Equivalent + Marketable Securities + Accounts Receivable divided by Current Liabilities.
Could you Evaluate the importance of capital structure and the cost of capital in efficient financial management of companies?
How do i start answering this question?
What are the importance of financial management in any business organization?
Financial management is the managing of income and expenditure and also about making decision that will enable the business to survive financially. The aim is to create ggggggggggggwealth and generate cash in order to make the business profitable.
What does a negative value of cash and marketable securities mean?
A negative value of cash is an overdraft. It represents money owed to the bank, usually for overdrawn checks. Marketable securities can rarely have a negative value. This is because the lowest possible value of most marketable securities is zero; investing in a marketable security should not result in a liability. Certain financial instruments could have negative values, meaning that the holder of the financial instrument owes an economic sacrifice to its counterparty. This should be recorded as a liability at fair market value.
Use the Wall Street Journal or some other financial publication to find the going interest reate for marketabe securities?
I'm unable to browse the internet in real-time to provide current interest rates for marketable securities. I recommend checking reputable financial websites like the Wall Street Journal, Bloomberg, or CNBC for the most up-to-date information on interest rates for marketable securities.
A financial ratio that measures the ability to pay current liabilities with liquid assets (cash marketable securities and receivables) is called?
Quick ratio.
In the management of cash and marketable securities why should the primary concern be for safety AND liquidity rather than profit maximization?
the firm may hold excess funds in anticipation of cash outlay.when funds are being held for other than immediate transaction purposes, they should be converted from cash into interest-earning marketable securities which should be of highest investment grade usually consist of treasury bills, commercial paper, certification of time deposits from commercial banks realistically, management of cash and marketable securities cannot be separated. management of one implies management of other reasons for holding marketable securities there are several reasons for holding marketable securities such as 1. they serve as a substitute for cash balances many firms prefer to hold marketable securities as a substitute for transaction balances, precautionary balances, for speculative balances of for all three. in most cases the securities are held primarily for precautionary purposes or as a guard against a possible shortage of bank credit. 2. they held as a temporary investment where a return is earned while funds are temporarily idle. 3. they are built up to meet known financial requirements such as tax payments, maturing bond issue and so on. factors influencing the choice of marketable securities among the factors that will influence the choice of marketable securities 1. risk such as a. default risk. the risk that the issuer of the security can not pay the principal or interest at due dates. b. interest rate risk. the risk of declines in market values of the security due to rising interest rate c. inflation rate. the risk that inflation will reduce the real value of the investment. in periods of rising prices, inflation risk is lower on investments whose returns tend to rise with inflation than on investment whose return are fixed. 2. maturity MARKETABLE SECURITIES held should mature or can be sold at the same time cost is required. 3. yield or returns on securities. generally, the higher a security's risk the higher its required return. corporate investors, like other investors must make a trade-off between risk and return when choosing marketable securities. because these securities are generally held either for specific known need or for use in emergencies, the portfolio should consist of highly liquid short-term securities issued by the government or very strong corporations. treasurers should not sacrifice safety for higher rates of return. 4. Marketability (liquidity) risk this refers to the risk that securities cannot be sold at close to the quoted market price and is closely associated with liquidity risk.
What are the importance of financial management in a business organisation?
Financial management ensures that a business is monitoring their finances. Financial management involves setting budgets and ensuring that departments remain on budget throughout the year.
What is the importance of credit management?
Credit management is vitally importance for a successful financial future. Good credit can ensure better loan terms, higher credit limits, and greater availability to financial products.
What is ratio analysis and importance of ratio analysis in financial management?
what is ratio analysis
What does an asset management company do?
An asset management company takes care of a customer's financial investments by investing in a variety of securities. They diversify a customer's portfolio according to their personal needs.
Definition of professional management?
Professional management in finances is when financial professionals invest, make returns, and watch securities for an investment entity. These often include firms, institutions, and individual investors.
What is the definition of a liquidity ratio?
Liquidity ratio are designed to test a company's ability to meet its short-term financial obligations. To find the ratio, you take Cash and Cash Equivalent + Marketable Securities + Accounts Receivable divided by Current Liabilities.
What services does RBC Dominion Securities provide?
RBC Dominion Securities provide the following services: investment products and plans, private investment management. They also offer financial planning, retirement planning and tax minimization strategies.
What has the author Ernest Winfield Walker written?
Ernest Winfield Walker has written: 'The securities industry in the Southwest: a feasibility study of the distribution process' -- subject(s): Securities industry 'Essentials of financial management' -- subject(s): Corporations, Finance
