ASSET STRIPPING Meaning and
Definition
-
Asset stripping refers to a strategy employed by companies or individuals to extract maximum value from a company's assets, with little regard for the long-term viability of the business. This practice typically involves forcefully liquidating assets and selling them off to generate immediate cash flow, often leaving the company with diminished resources and potentially leading to its eventual demise.
Asset stripping is often employed by opportunistic investors or corporate raiders, who acquire struggling or undervalued companies primarily to exploit their assets rather than to support their overall growth and sustainability. Examples of assets that are commonly stripped include physical properties, inventory, patents, trademarks, and any other valuable resources or intellectual property that can be sold for profit.
The term also describes the process of breaking up or downsizing a company to reduce costs and boost efficiency. In this context, asset stripping may involve divesting certain non-core business units or operations that are deemed unprofitable or redundant.
While asset stripping may be legally permissible in some instances, it is often viewed negatively due to its short-term focus and disregard for the long-term consequences on employees, shareholders, and the broader economy. Critics argue that such practices can result in job losses, diminished competition, and economic instability.
Overall, asset stripping is an exploitative and controversial practice aimed at extracting maximum value from a company's assets, often at the expense of its long-term health and prospects.
Common Misspellings for ASSET STRIPPING
- aaset-stripping
- aasset-stripping
- a3set-stripping
- a sset-stripping
- zsset stripping
- ssset stripping
- wsset stripping
- qsset stripping
- aaset stripping
- azset stripping
- axset stripping
- adset stripping
- aeset stripping
- awset stripping
- asaet stripping
- aszet stripping
- asxet stripping
- asdet stripping
- aseet stripping
- aswet stripping
Etymology of ASSET STRIPPING
The term "asset stripping" originated in the world of finance and business in the mid-20th century. It combines the words "asset" and "stripping" to describe a specific practice.
- Asset: The word "asset" comes from the Old French word "acetz", meaning "enough to pay off". It further derives from the Latin word "ad-satis", which means "to satisfy". In the context of finance and business, an asset refers to something valuable owned by an individual, company, or organization that has the potential to generate economic benefits.
- Stripping: The word "stripping" comes from the Old English word "strypian", which means "to plunder" or "to rob". Stripping involves removing or taking away parts or elements from a whole.
Infographic
Add the infographic to your website:
