Maturity Mismatch

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DEFINITION of 'Maturity Mismatch'

The tendency of a business to mismatch its balance sheet by possessing more short-term liabilities than short-term assets and having more assets than liabilities for medium- and long-term obligations. How a company organizes the maturity of its assets and liabilities can give details into the liquidity of its position.

INVESTOPEDIA EXPLAINS 'Maturity Mismatch'

Changes in a company's maturity profile can also be useful in learning more about the status of a company because it indicates a company's ability to borrow. Using the maturity mismatching structure of a company along with additional information can help investors to assess the company's liquidity position.

RELATED TERMS
  1. Asset

    1. A resource with economic value that an individual, corporation ...
  2. Current Assets

    1. A balance sheet account that represents the value of all assets ...
  3. Current Liabilities

    A company's debts or obligations that are due within one year. ...
  4. Liability

    A company's legal debts or obligations that arise during the ...
  5. Liquidity

    1. The degree to which an asset or security can be bought or ...
  6. Maturity

    The period of time for which a financial instrument remains outstanding. ...
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