Term Out


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.


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.

  1. Balance Sheet

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

    A balance sheet account that represents the value of all assets ...
  3. Working Capital

    Working capital is a measure of both a company's efficiency and ...
  4. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  5. Current Liabilities

    A company's debts or obligations that are due within one year. ...
  6. Long-Term Liabilities

    In accounting, a section of the balance sheet that lists obligations ...
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