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 Commentary
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 Links
Reading The Balance Sheet
Advanced Financial Statement Analysis
Trying To Predict Interest Rates
See also: Balance Sheet, Current Assets, Current Liabilities, Debt, Long-Term Liabilities, Working Capital
Also spelled: term out