What Are Marketable Securities on the Balance Sheet?

Marketable securities are financial assets that can be easily bought and sold on a public market, such as
stocks, bonds, and mutual funds. These securities are listed as assets on a company's balance sheet
because they can be easily converted into cash.

What Is the Most Common Example of a Marketable Security?

In most cases, companies strive to hold bonds as marketable securities. These types of investments are
more ideal for those seeking short-term capital preservation. Another common form of marketable
securities are stocks, as this type of marketable security is easily exchanged and have a slight
opportunity for capital appreciation.

What Kind of Asset Is Marketable Securities?

Marketable securities are financial assets that are easily traded on public markets and can be quickly
converted into cash. As such, marketable securities are typically classified as current assets on the
balance sheet, alongside cash and cash equivalents, accounts receivable, and inventory.

What Are the Safest Types of Marketable Securities?

The safest types of marketable securities are typically those that are issued by governments or
government agencies. These securities are generally considered to be low-risk investments because they
are backed by the full faith and credit of the issuing government The default risk of these securities is
very low, especially when compared against the risk of corporate default.

The Bottom Line

There are liquid assets that are not marketable securities, and there are marketable securities that are
not liquid assets. For example, a recently minted American Eagle Gold Coin is a liquid asset, but it is not
a marketable security.

On the other hand, a hedge fund may be a marketable security without being a liquid asset. Every
marketable security must still satisfy the requirements of being a financial security. It must represent
interest as an owner or creditor, carry an assigned monetary value, and be able to provide a profit
opportunity for the purchaser.