Metatron Global Fund Mauritius

Summary: Metatron Global Fund is a Private Limited Company in Port Louis, Mauritius.

Organisation details






Metatron Global Fund


Port Louis


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Company Limited by Shares

Short-term financial investments: definition and examples

What is meant by financial investment?

These are investments in financial assets , which can be made both by individuals and by companies in order to obtain passive income .

What are short-term investments?

Within the financial investment portfolio there are long-term and short-term ones . The latter are those that in principle are settled in, at most, a term of one year . There is, however, the possibility that they will not be settled within that time limit of one year. This usually happens when it comes to investments made by companies that seek to achieve a certain power or dominance over other companies in which they have invested.

Short-term investments are generally considered current assets.

Examples of short-term financial investments

Dividends and interest accrued with maturity not exceeding one year or without maturity.
Bonds and short-term deposits.
Other types of financial assets and short-term investments.

Advantages of financial investments

They allow to maximize the wealth of the shareholders.
They serve to increase profits from a surplus of capital.
They enable the transfer of funds and risks.
They help finance the business growth of a country.
They can be carried out both by individuals (small investors) and by companies.
They are transparent, since the prices of the different shares or public securities can be consulted in real time from the internet or with a simple phone call. Also through these channels can be bought or sold very quickly.
Short-term financial investments

How financial investments are accounted for

The most important thing is that the different financial investment accounts appear clearly separated as follows:

They must be represented at the accounting level through independent accounts.
In addition to indicating the investment in question, it is necessary to specify data such as the relationship established with the companies in which it is invested. For example, if they are companies of the same group or outside of it, multi-group companies or associates.
As a general rule, financial investments are a product highly sought after by investors , and their use has become very popular in recent years as they can be managed very easily online. In any case, despite being a recommended product for all those (individuals or companies) who have a financial surplus and wish to invest it , seeking greater profitability, to avoid unpleasant surprises it is necessary to carry out an exhaustive analysis of each investment . For this, factors such as: financial assets, technical issues, the risk factor, etc. must be assessed. Our recommendation if we are not experts on the subject is to seek advice from specialized professionals and, as a general rule, try to diversify the investment , since in the same way that there can be increases of 10% and even more in certain assets, there can also be decreases of the same proportions and, therefore, significant losses.

Liquidity ratio: what is it and how is it calculated?

Learn how to correctly deduct financial expenses

Do you know what analytical accounting is and how it can benefit your business?

What is the liquidity ratio?

It is an indicator that you can use to check if your business or company has the capacity to meet its short-term financial obligations . Put simply, if you have enough money to meet your immediate payments, whether they are bills to suppliers, the installments of a line of credit or bank loan or payments to the Tax Agency.

The liquidity ratio is, therefore, a very useful tool to manage your treasury and know if you have room to face your payments without problems or if, on the contrary, you should be moderate in your expenses if you do not want to be overwhelmed at the time. to pay the bills.

How is the liquidity ratio calculated?

To calculate it, a fairly simple formula is used : you only have to divide the company’s current assets (which include short-term collection rights, cash and inventories) by current liabilities (which are payment obligations and commitments to be fulfilled in the short term). This formula can be represented as:

current active

current liability

This division can give two types of results: greater than one, or less than one .

How the result of the liquidity ratio formula is interpreted
Once the result is obtained, we must interpret it in two different ways depending on whether the quotient is greater or less than one.

First option: the result is greater than one . In principle, this is good news, since it means that the assets of our company are greater than the liabilities. However, if the data is much higher than one, it could be a symptom that our company has too many active resources that are probably not being sufficiently exploited.
Second option: the result is less than one . It is the most negative result, since it indicates that our SME or business may have liquidity problems. What does this mean? That we will probably have difficulty paying bills and other obligations in the short term. Normally, what we have to pay in less than a year is taken as a reference.
In any case, we must take the result of our liquidity ratio as a simple reference . It all depends on the type of company in question, since some work without problems with some treasury tensions and, in the end, they can always face the payments.

In addition, the positive part of making this type of calculation is that, as it is carried out a certain time in advance, it allows us to have a certain margin of maneuver to take the measures that we consider appropriate to reverse the situation.

Be that as it may, it is always good to know this index in order to have more data and arguments in order to control the treasury of our company , thus avoiding surprises and last minute rush for not being able to face an important payment.

Creating a company or setting up a business is, without a doubt, an exciting adventure that can bring us great personal and also collective benefits in the form of wealth generation and jobs.