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. Investopedia Says:
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. Related Terms:
Asset
Current Assets
Current Liabilities
Liability
Liquidity
Long-Dated Asset
Maturity |