Foam The Runway

DEFINITION of 'Foam The Runway'

A term indicating the last-minute infusion of cash into a company about to go bankrupt. Airports foam runways prior to an imminent crash landing to help reduce friction and sparks. Just as foaming the runway is a last stand against a horrible crash landing, a company obtaining a loan to stay in business is a last stand against going under.

"Foam the runway" is also a general statement in business, which refers to preparing for a potential disaster.

BREAKING DOWN 'Foam The Runway'

If a company is in trouble before having to obtain an infusion of cash, foaming the runway will usually just delay the inevitable. Prudent investors should not assume that a cash infusion will save a company, and should carefully review all available information before making an investment decision.

RELATED TERMS
  1. Shapley Value

    In game theory, a manner of fairly distributing both gains and ...
  2. Burn Rate

    The rate at which a new company uses up its venture capital to ...
  3. Land Value

    The value of a piece of property, including both the value of ...
  4. Land Value Tax - LVT

    A tax on the value of a piece of land. Land value tax inherently ...
  5. Crash

    A sudden and significant decline in the value of a market. A ...
  6. Littoral Land

    Land that is located next to a pooled body of water. Littoral ...
Related Articles
  1. Managing Wealth

    The Top Six Richest Supermodels

    Through excellent investing, brand management and high earnings, these six supermodels have cultivated multi-million dollar net worths.
  2. Managing Wealth

    How to Keep a Land Investment From Going Bust

    Investing in land can yield big returns. But investors should consider their goals, as well as the following details, to make the deal a success.
  3. Personal Finance

    Uncover The Next Real Estate Hot Spot

    Real estate land speculation is a way to get in on a hot investment before a boom hits.
  4. Markets

    Fitbit Stock Rises 4% on Analysts Upgrade (FIT)

    The fitness wearable device maker received some bullish comments from analysts at Wedbush, who say they see a 'long runway' for the company's growth.
  5. Markets

    Is the Stock Market Crashing? 5 Signs to Consider

    Learn about some signs of a potential stock market crash including a high level of margin debt, lots of IPOs, M&A activity and technical factors.
  6. Investing

    The Silver Lining of a Stock Market Crash

    A stock market crash isn't always bad news for investors. Here is the silver lining.
  7. Markets

    How Does Casper Work and Make Money?

    Learn how the startup Casper is delivering a good night's sleep directly to customers' homes for a fraction of the cost of the competition.
  8. Personal Finance

    Top 4 Things That Determine A Home's Value

    Your house depreciates over time, while the land beneath it is likely to do the opposite.
  9. Markets

    Understanding Frictional Unemployment

    Frictional unemployment is one aspect of natural unemployment, which is unemployment caused by things other than an underperforming economy.
  10. Markets

    Cash: Can A Company Have Too Much?

    Cash is something companies love to have. But if they are not using it there could be problems.
RELATED FAQS
  1. Why does an investor need to look at the burn rate of companies in the internet sector?

    Understand why an investor needs to look at the burn rate of companies in the Internet sector. Learn what a burn rate is ... Read Answer >>
  2. How do investors lose money when the stock market crashes?

    Over the last hundred years, there have been several large stock market crashes that have plagued the American financial ... Read Answer >>
  3. What is the difference between frictional unemployment and structural unemployment?

    Learn about structural unemployment and frictional unemployment, the differences between the two types and their main characteristics. Read Answer >>
  4. How can you use a cash flow statement to make a budget?

    Understand how a cash flow statement can be used to create a company budget. Learn the difference between a cash budget and ... Read Answer >>
  5. What caused the stock market crash of 1929 that preceded The Great Depression?

    Find out what led to the stock market crash of 1929, which in turn led to the Great Depression. It sparked a nearly 90% loss ... Read Answer >>
  6. What does the cash ratio of a company measure, and how does it affect decision making?

    Learn what the cash ratio of a company measures, and understand why its an important liquidity ratio for a company to use ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center