StockSignal
Short Duration Funding
Story type: Vulnerability
Short-term debt is elevated relative to total debt. The funding structure relies on continuous access to short-term credit markets.
State
Short duration funding
Emergence
The funding structure shows elevated short-term debt reliance. When short-term debt ratio is high while current ratio is moderate and duration mismatch exists between assets and liabilities, the company depends on continuous access to short-term credit markets to fund longer-duration assets.
Limits
This story describes structural exposure, not liquidity crisis prediction. It does not predict credit market conditions, rollover failures, or funding stress. Many companies successfully manage short-duration funding.
Explanation
This vulnerability describes a structural exposure: Short-Term Debt Ratio indicates reliance on near-term maturities. Current Ratio shows liquidity buffer relative to current obligations. Asset-Liability Duration Mismatch indicates whether assets and funding have similar time horizons. When short-term funding is elevated, the company must regularly refinance. This creates sensitivity to credit market conditions and interest rate movements. The exposure is to funding market disruption, not operational performance.
Interpretation
This story identifies funding duration mismatch, not crisis prediction. It does not claim credit markets will tighten or that refinancing will fail. Many companies maintain short-duration funding as deliberate strategy.
Required Signals
current-ratio
Ratio of current assets to current liabilities