Vous êtes sur la page 1sur 9

Chapter 7 (Part a)

Financial Assets

Assets & Its Types

Those things which are being owned by a business is called as

1.Financial Assets:
. An asset that derives value because of a contractual claim.
Stocks, bonds, bank deposits, and the like are all examples of
financial assets.

2.Real Assets:
. A type of asset that does not derive its value from any
contractual claim. E.g, Physical asset like Plant, Equipment etc.

Financial Assets
We have different financial assets present in a

i. Cash:
. Money that is deposited in banks or in your hand or bank
accepts it as deposit is called as cash.

ii. Marketable Securities:

. Whenever you have extra or unwanted cash with you,
than for a wise financial manager, he should invest
that money into short term highly liquid assets. Those
assets are called as marketable securities.

Financial AssetsContt
iii. Accounts Receivables

Receivables is that money which your customer owe to you

because of credit purchase he did from you.
Receivables are treated as current assets as because it has
a life of less than one year but I can be for more than 1 year
too and still we will consider it as current asset.


We are now going to discuss each of the financial asset in

more detail form in coming lectures.

How to find value of Financial Assets

Basis for Valuation in

Type of Financial Asset
the Balance Sheet
Cash (and cash equivalents) Face amount
Short-term investments
Current market value
(marketable securities)
Net realizable value

How Much Cash Should a Business


Cash (and cash




Excess cash
is invested

Investments are
sold as cash is

Marketable securities

Cash & Cash Management

Money that is deposited in banks or in your hand or bank accepts it
as deposit is called as cash.

Different Terms Related to Cash:

1. Cash Equivalents:
Cash equivalents are the closest financial asset near cash.
Cash Equivalents is actually when you invest the extra money
to liquidize things.
Such investment is done for few days or a month.

2. Restricted Cash:
That amount of cash which is deposited in bank but
according to the rules you cannot withdraw the money
for running the business operations:

Cash & Cash ManagementContt

Bank agrees in advance to
lend money.

Lines of Credit

Liability is incurred
when line of credit is

Unused line of credit is

disclosed in notes.