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. Carve-Out

    The partial divestiture of a business unit. A company undertaking ...
  3. Layoff

    1. When a company eliminates jobs regardless of how good the ...
  4. Merger

    The combining of two or more companies, generally by offering ...
  5. Spinoff

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

    Any firm whose business generates significant positive cash flows ...
Related Articles
  1. Evaluating A Company's Management
    Active Trading Fundamentals

    Evaluating A Company's Management

  2. Governance Pays
    Options & Futures

    Governance Pays

  3. Putting Management Under The Microscope
    Options & Futures

    Putting Management Under The Microscope

  4. Using Appreciative Inquiry To Solve ...
    Investing Basics

    Using Appreciative Inquiry To Solve ...

Hot Definitions
  1. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  2. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  3. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  4. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  5. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
  6. Macroeconomics

    The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena ...
Trading Center