Definition of 'Short-Term Investments'
An account in the current assets section of a company's balance sheet. This account contains any investments that a company has made that will expire within one year. For the most part, these accounts contain stocks and bonds that can be liquidated fairly quickly.
Investopedia explains 'Short-Term Investments'
Most companies in a strong cash position have a short-term investments account on the balance sheet. This means that a company can afford to invest excess cash in stocks and bonds to earn higher interest than what would be earned from a normal savings account.
Microsoft, which is always in a strong cash position, had short-term investments totaling approximately $32 billion at the end of 2005.