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. Leverage Ratio

    1. Any ratio used to calculate the financial leverage of a company ...
  3. Degree Of Combined Leverage - DCL

    A leverage ratio that summarizes the combined effect the degree ...
  4. Degree Of Operating Leverage - ...

    A type of leverage ratio summarizing the effect a particular ...
  5. Interest

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

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

    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 ...
  4. Investing

    Operating Leverage Captures Relationships

    Find out how fixed and variable costs interact to shed new light on old companies.
  5. Fundamental Analysis

    Should companies break out accounts receivables into subledgers?

    Find out why every company that sells on credit should break down its accounts receivable into individual customer subsidiary ledgers, or subledgers.
  6. Fundamental Analysis

    What's a Prospectus?

    The Security and Exchange Commission (SEC) requires that any company raising money from potential investors through the sale of securities must file a prospectus with the SEC and then provide ...
  7. Fundamental Analysis

    Cash Flow From Operating Activities

    Cash flow from operating activities is a section of the Statement of Cash Flows that is included in a company’s financial statements after the balance sheet and income statements.
  8. Fundamental Analysis

    What's Net Debt?

    Net debt is one of the many metrics used to measure a company’s ability to pay its debts. There are other metrics such as net liquidity ratio, cash conversion cycle and the debt to equity ratio, ...
  9. Active Trading Fundamentals

    What is the difference between cash flow and fund flow?

    See how cash flow and fund flow differ from each other, and why fund flow can be used very differently by accountants and investors.
  10. Fundamental Analysis

    What kind of financial reporting requirements does GAAP set out?

    Look at some of the major financial reporting requirements set forth by the generally accepted accounting principles and the required financial statements.

You May Also Like

Hot Definitions
  1. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  2. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  3. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  4. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  5. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  6. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
Trading Center