Maturity Mismatch


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.

BREAKING DOWN '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.

  1. Maturity

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

    The degree to which an asset or security can be quickly bought ...
  3. Current Assets

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

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

    A company's legal debts or obligations that arise during the ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
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  1. Can a company's working capital turnover ratio be negative?

    A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
  2. Can working capital be negative?

    Working capital can be negative if a company's current assets are less than its current liabilities. Working capital is calculated ... Read Full Answer >>
  3. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  4. Does working capital include prepaid expenses?

    The calculation for working capital includes any prepaid expenses that are due within one year, since such prepaid expenses ... Read Full Answer >>
  5. Does working capital include short-term debt?

    Short-term debt is considered part of a company's current liabilities and is included in the calculation of working capital. ... Read Full Answer >>
  6. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>

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