Investment

1. Investment Group 6 (2CFM): Dator, Camille Cruz, Nicole Cabusas, Joey Nocon, Francis Araza, Gilbert

2. What is investment? • Short-term or long-term • are assets held by an entity or the accretion of wealth • not directly identified with the operating activities

3. Cash is used for the following purposes: • Investing in current operations • Investing in temporary investments to earn additional revenue • Investing in long-term investments in stock of other companies for strategic reasons

4. Cash is also used to pay the following: • Expenses • Suppliers of merchandise and other assets • Interest to creditors • Dividends to stockholders

5. Investing cash in temporary investments: • Debt securities – notes and bonds that pay interest and have a fixed maturity date. • Equity securities – preferred and common stock that represent ownership in a company and do not have a fixed maturity date.

6. Primary objective in investing in temporary investments is to: • Earn interest revenue • Receive dividends • Realize gains from increases in the market price of the securities

7. Investing cash in long-term investment: • Strategic purpose of long term investment: • Reduction cost • Replacement of management • Expansion • Integration

8. Debt and Equity Securities are classifies as follows:

9. Trading securities • debt and equity securities that are purchased and sold to earn short-term profits from changes in their market prices. • Realize profit through trading

10. 2. Available-for-sale securities • are debt and equity securities that are neither held for trading, held to maturity, or held for strategic reasons. • Neither trading securities or held-to-maturity • Direct equity item

11. 3. Held-to-maturity securities • debt and investments, such as notes or bonds that a company intends to hold until maturity date. • Collect interest and principal