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. Land Value

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

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

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

    Land that is located next to a pooled body of water. Littoral ...
  6. Airport Tax

    A tax levied on passengers for passing through an airport. The ...
Related Articles
  1. Personal Finance

    Memory Foam

    We use these products all the time.
  2. Professionals

    The Top Six Richest Supermodels

    Through excellent investing, brand management and high earnings, these six supermodels have cultivated multi-million dollar net worths.
  3. Real Estate

    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.
  4. Home & Auto

    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.
  5. Personal Finance

    Crocs

    Though they may seem like a rare breed these days, these organizations have built their reputations on just one item.
  6. Stock Analysis

    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.
  7. Budgeting

    Market Crashes: What are Crashes and Bubbles?

    By Andrew BeattieA bubble is a type of investing phenomenon that demonstrates the frailty of some facets of human emotion. A bubble occurs when investors put so much demand on a stock that they ...
  8. Economics

    Understanding Frictional Unemployment

    Frictional unemployment is one aspect of natural unemployment, which is unemployment caused by things other than an underperforming economy.
  9. Home & Auto

    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.
  10. Entrepreneurship

    5 Steps to Become an Entrepreneur

    Understand what it takes to become an entrepreneur, and learn about five steps that can help someone become an entrepreneur and build a successful business.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  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 is the difference between cash flow and free cash flow?

    Learn about the main differences between cash flow and free cash flow. In addition to the differences, learn how to calculate ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center