Term Out

AAA

DEFINITION of 'Term Out'

The transfer of debt within a company's balance sheet without acquiring new debt. This is done through the capitalization of short-term to long-term debt.

INVESTOPEDIA EXPLAINS 'Term Out'

By changing the characteristic of debt on the balance sheet, companies can improve their working capital situation as well as take advantage of lower interest rates, based upon the projection that they will rise in the future.

RELATED TERMS
  1. Working Capital

    This ratio indicates whether a company has enough short term ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  3. Current Assets

    1. 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. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  6. Long-Term Liabilities

    In accounting, a section of the balance sheet that lists obligations ...
Related Articles
  1. Investing Basics

    Reading The Balance Sheet

  2. Investing Basics

    Interest Rates And Your Bond Investments

  3. Options & Futures

    Advanced Financial Statement Analysis

  4. Investing Basics

    What's the difference between capital ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center