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July 17, 2009

What is disinvestment?

In business, disinvestment means to sell off certain assets such as a manufacturing plant, a division or subsidiary, or product line. Disinvestment is sometimes described as the opposite of capital expenditures. Some people use the term divestiture, or to divest when discussing disinvestment.

For example, an electric generator manufacturer might sell off its consumer generator product lines and manufacturing facilities in order to raise money that can be used to expand its industrial generator product line.

Another example is a consumer products company selling off a profitable division that no longer meets its long range goals. The proceeds from this disinvestment are then used to improve the company’s financial position by reducing its debt.

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Comments

7 Responses to “What is disinvestment?”

  1. pedro on July 22nd, 2009 10:42 am

    very much interesting and satisfactory.

  2. shamim on August 4th, 2009 10:54 pm

    i got to know this new terminology. it’s good. such type of accouting terms help us in improving our knowledge.

  3. Emmanuel on August 5th, 2009 5:22 am

    simply disinvestment is a withdrawal of interest from a business entity

  4. Louis Nubaridoo on August 6th, 2009 5:53 am

    How does accounting controls enhanced or aid profitability in a supermarket business.

    Thanks

  5. Ghulam on August 6th, 2009 11:17 pm

    Many thanks of your accounting coach team.

    I am very glad becuase you team helpled me.

    I hope you help me further more.

    Mehdi

  6. James on August 10th, 2009 8:59 pm

    this is interesting stuff

  7. Avnish on August 24th, 2009 2:01 am

    Self-explanatory, good content

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