What is a 'Restructuring Charge'

A restructuring charge is a one-time cost that must be paid by a company when it reorganizes. A restructuring charge might be incurred in the process of furloughing or laying off employees, closing manufacturing plants, shifting production to a new location or writing off assets. When a company restructures, it is usually experiencing significant problems and restructuring is an attempt to improve the business and recover financially.

BREAKING DOWN 'Restructuring Charge'

A restructuring charge will cost a company money in the short run, but it is meant to save the company money in the long run. A restructuring charge will be mentioned in stock analysis as lowering a company's operating income and diluted earnings. Restructuring charges will often have a significant effect on a company's income statement as a result.

RELATED TERMS
  1. Restructuring

    A significant modification made to the debt, operations or structure ...
  2. Debt Restructuring

    A method used by companies with outstanding debt obligations ...
  3. One-Time Charge

    A charge against earnings that is expected to be an isolated ...
  4. Earnings Before Interest, Taxes, ...

    A non-GAAP indicator of a company's financial performance calculated ...
  5. Furlough

    A temporary layoff, involuntary leave or other modification of ...
  6. Corporate Refinancing

    The process through which a company reorganizes its debt obligations ...
Related Articles
  1. Investing

    Difference Between Restructuring and Refinancing

    Refinancing and restructuring are very different debt reorganization processes to improve finances and avoid bankruptcy.
  2. Personal Finance

    Refinance Vs. Debt Restructuring: What's Best For Your Credit Score?

    Discover key differences between refinancing and restructuring debt in regard to terms, the negotiation process and effect on credit scores.
  3. Investing

    Detecting Accounting Manipulation

    "One-time charges" and "investment gains" are two strategies companies can use to distort their numbers.
  4. Investing

    Deutsche Bank Suffers 98% Plunge in Q2 Profits (DB)

    The decline was driven by costs related to the company's massive restructuring efforts.
  5. Investing

    What Greece Can Learn From Argentina’s Mistakes

    Contingent on fiscal reform, Greece can learn from Argentina in determining the terms of restructuring its debt.
  6. Investing

    The One-Time Expense Warning

    These income statement red flags may not spell a company's downfall. Learn why here.
  7. Personal Finance

    South Korea Makes Surprise Rate Cut

    The South Korean Central Bank cut the benchmark interest rate to 1.25% Thursday, but economists want further stimulus to shore up the economy.
  8. Investing

    Some Good News Is Bad News For Investors

    Some companies excel at announcing news that is bad for shareholders, but spinning it as good news.
  9. Investing

    Intel "Restructuring" for Future Growth

    Included in a solid earnings report on April 19 that once again demonstrated Intel (NASDAQ: INTC) CEO Brian Krzanich's shift to new, cutting-edge technologies is taking hold, the world's largest ...
  10. Investing

    Ralph Lauren Shares at 6-mo High on Earnings Beat, Olympics

    Beleaguered garment company Ralph Lauren beat Q1 expectations; the stock price reached a six-month high on the news.
RELATED FAQS
  1. What are some alternatives a company can attempt prior to resorting to liquidation?

    Learn the different alternatives that a company may pursue prior to liquidation. All of these options have their advantages ... Read Answer >>
  2. What are the key differences between pro forma statements and GAAP statements?

    Learn the key differences between pro forma and GAAP statements. Review examples and cautionary notes about reliance on pro ... Read Answer >>
  3. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Discover how the fixed charge coverage ratio is useful to investors and analysts, and when it suggests that a company should ... Read Answer >>
  4. Does a shareholder lose all of their equity once a Chapter 11 bankruptcy is filed ...

    When a company files for Chapter 11 bankruptcy, the management of the company is still in charge of the daily operations. ... Read Answer >>
  5. Are 'gray' credit card charges legal?

    Read the fine print and all credit card statements carefully to avoid misleading charges that often go unnoticed on credit ... Read Answer >>
  6. How can I prevent commissions and fees from eating up my trading profits?

    First off, understand that there is no universal system regarding trading commissions charged by brokerage firms. Some charge ... Read Answer >>
Hot Definitions
  1. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  2. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  3. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  4. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  5. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  6. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
Trading Center