Long term investments, often known as 'non-current assets', are the investments made by a company with an expectation of generating returns over a period longer than one year. These can include bonds, stocks, real estate properties, and more, which a company intends to hold for several years.
While the brief definition provides a basic understanding, a deeper look into long term investments is necessary for a comprehensive view. These investments are assets that a company intends to hold for more than one fiscal year. They are a part of the company's long-term strategy, either for generating revenue or for other operational purposes.
Long term investments can include a variety of asset types. For instance, they can consist of bonds or stocks in other companies. They could also be real estate or tangible assets that the company plans to use over several years. Additionally, long term investments can include cash set aside for future capital improvements or for large projects.
Long term investments are usually recorded on the balance sheet under 'non-current assets', and can provide a significant portion of the company's future economic benefit. However, these investments also come with risks, as their value can fluctuate over time.
Apple's long term investments mainly consist of marketable securities, like equity and debt securities, which it intends to hold for more than one year. These investments are part of Apple's strategy to manage its cash efficiently and generate returns.
Ford's long term investments include its stakes in other companies, bonds, and cash set aside for future capital improvements. These investments are part of Ford's long-term strategy for generating revenue and funding its operations.
Amazon's long term investments include equity stakes in other companies, bonds, and real estate properties for future expansion. These investments are critical components of Amazon's long-term growth strategy.