Curtailment

AAA

DEFINITION of 'Curtailment'

The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations.

INVESTOPEDIA EXPLAINS 'Curtailment'

A company may use several techniques for curtailing its operations, such as cutting down its workforce or spinning off some operations. This is an effective management technique as it helps to refocus the company on operational efficiencies, which improve shareholder wealth.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Layoff

    1. When a company eliminates jobs regardless of how good the ...
  3. Carve-Out

    The partial divestiture of a business unit. A company undertaking ...
  4. Growth Company

    Any firm whose business generates significant positive cash flows ...
  5. Spinoff

    The creation of an independent company through the sale or distribution ...
  6. Merger

    The combining of two or more companies, generally by offering ...
Related Articles
  1. Active Trading Fundamentals

    Evaluating A Company's Management

    Financial statements don't tell you everything about a company's health. Investigate the management behind the numbers!
  2. Options & Futures

    Governance Pays

    Learn about how the way a company keeps its management in check can affect the bottom line.
  3. Options & Futures

    Putting Management Under The Microscope

    We tell you where to find the telltale signs of corporate misdeeds.
  4. Fundamental Analysis

    How do you use Microsoft Excel to calculate liquidity ratios?

    Learn how to calculate the most common liquidity ratios in Microsoft Excel by inputting financial figures from a company's balance sheet.
  5. Economics

    America's Most Notorious Corporate Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.
  6. Investing Basics

    What is revenue cycle management?

    Learn more about revenue cycle management and why the healthcare industry in particular has adopted this payment process philosophy.
  7. Fundamental Analysis

    Is it important for a company always to have a high liquidity ratio?

    Understand the significance of the liquidity ratio and how it is used in conjunction with other measures to arrive at an overall evaluation of a company.
  8. Fundamental Analysis

    To what extent should you take a company's liquidity ratio into account before investing in it?

    Find out how important it is for an investor to know a company's liquidity ratio before deciding to invest, and why relying on one ratio can be dangerous.
  9. Fundamental Analysis

    How can a company quickly increase its liquidity ratio?

    Discover what high and low values in the liquidity ratio mean and what steps companies can take to improve liquidity ratios quickly.
  10. Investing

    Corporate Governance

    Corporate governance refers to the formally established guidelines that determine how a company is run. The company’s board of directors approves and periodically reviews the guidelines, which ...

You May Also Like

Hot Definitions
  1. Portfolio Turnover

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

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

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. 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 ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center