Short-term investments are readily convertible to cash that are intended to be converted into cash within one year or the operating cycle,whichever is longer.

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Short-term investments are defined as investments that have a maturity period of one year or less and are readily convertible to cash, making them easily accessible for use in business operations or to meet short-term cash needs. The operating cycle refers to the time it takes for a company to purchase raw materials, produce goods or services, sell them, and receive payment for them, which may exceed one year for some industries. Therefore, short-term investments can be converted into cash within one year or the operating cycle, whichever is longer.

Short-Term Investments Are Readily Convertible to Cash That Are Intended