Long-term investments

Long term investments are financial assets a company plans to hold for more than a year, such as bonds that mature after the next twelve months and shares in other companies. They sit in the non-current assets section of the balance sheet.

They differ from short term investments in time horizon, not in kind. A bond maturing in eight months counts as a short term investment, while the same type of bond maturing in three years counts as a long term one.

For companies holding a lot of cash, these investments can be large, and some analysts add them to cash and short term investments when judging how much money a company could put to use. Be careful doing so: shares and bonds with distant maturities can lose value and may take time to sell, so they are less certain than cash.