Average Annual Current Maturities

AAA

DEFINITION of 'Average Annual Current Maturities'

The amount of principal paid on outstanding long-term debt during the upcoming year. Average annual current maturities is a financial figure listed in the notes to the financial statements. If this number is rising annually, it can be assumed that the company is taking on more debt.

INVESTOPEDIA EXPLAINS 'Average Annual Current Maturities'

Current maturities is the amount of time before a debt needs to be paid back. For example, if a loan was taken eight years ago and needed to be paid back in 10 years, the current maturity is two years.

When a company leverages itself through debt, it can be positive; however, too high a debt level could put a strain on cash resources as the company tries to make its interest payments. A prudent investor will monitor whether a company is taking on more debt and compare the debt levels with assets and revenues to see if the company is leveraging itself efficiently.

RELATED TERMS
  1. Degree Of Financial Leverage - ...

    A ratio that measures the sensitivity of a company’s earnings ...
  2. Interest

    1. The charge for the privilege of borrowing money, typically ...
  3. Leverage

    1. The use of various financial instruments or borrowed capital, ...
  4. Leverage Ratio

    1. Any ratio used to calculate the financial leverage of a company ...
  5. Degree Of Operating Leverage - ...

    A type of leverage ratio summarizing the effect a particular ...
  6. Degree Of Combined Leverage - DCL

    A leverage ratio that summarizes the combined effect the degree ...
Related Articles
  1. Investing Basics

    Reading The Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.
  2. Fundamental Analysis

    Analyzing A Bank's Financial Statements

    A careful review of a bank's financial statements can help you identify key factors in a potential investment.
  3. Investing

    Operating Leverage Captures Relationships

    Find out how fixed and variable costs interact to shed new light on old companies.
  4. Investing

    What are the risks of having both high operating leverage and high financial leverage?

    In finance, the term leverage arises often. Both investors and companies employ leverage to generate greater returns on their assets. However, using leverage does not guarantee success, and the ...
  5. Fundamental Analysis

    What is a bad interest coverage ratio?

    Understand how interest coverage ratio is calculated and what it signifies, and learn what market analysts consider to be an unacceptably low coverage ratio.
  6. Fundamental Analysis

    What is the difference between a capital gearing ratio and a net gearing ratio?

    Understand the definition of gearing in the finance industry, the difference between net gearing and capital gearing ratios and how they are interpreted.
  7. Fundamental Analysis

    What is the difference between interest coverage ratio and DSCR?

    Understand the basics of the interest coverage ratio and the debt-service coverage ratio, including calculations and how each type reflects financial stability.
  8. Fundamental Analysis

    When does a business report gross margins?

    Learn how gross margins are calculated and when publicly traded companies release these figures. Explore consensus street estimates.
  9. Investing Basics

    What is the difference between accrual accounting and accounts payable?

    Understand the difference between accrual accounting, an accounting method, and accounts payable, which is a ledger entry within the accounting system.
  10. Investing Basics

    How To Calculate Goodwill

    Goodwill is an intangible, but it is still possible to effectively calculate or estimate goodwill for a company.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center