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| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
This article refers to investments listed on company financial statements for information on gerenal investments, see the section on How to Invest.
Investments are assets expected to generate a return greater than the purchase price
Investments come in two forms -- Short Term Investments and Long-term investments. Short Term Investments are extremely liquid and can be sold at anytime. These include things like money market funds, certificates of deposit, and treasury bills. Long-term investments are less liquid and have a horizon of more than one year. These types of investments include large investments in other companies, such as Warren Buffett's minority stake investment in the Coca-Cola Company (KO) as well as long run hedges against rising oil prices.
Investments can be found on both the Balance sheet and the Cash Flow Statement. On the Balance sheet, investments are recorded as Assets for the company. On the Cash Flow Statement, investments are either listed as cash inflows or outflows depending on the investment activity for the period. If a company increases its investments in a period, it will be recorded as a cash outflow, whereas, if the company decreases their investments by selling them, they will record a cash inflow in the Cash Flow Statement.
Examples


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