Fundamental Glossary / Management & Corporate Governance
Window Dressing
Actions taken just before a reporting date to make the statements look stronger than the typical day.
Formula
Examples: delaying payables, accelerating collections, selling receivables, repaying debt for a week, or pushing shipments into the last days of the quarter.
What it means
Window dressing uses real transactions timed for the photograph. The balance sheet on 31 March may be healthier than the balance sheet on an average day.
It is most common around debt covenants, credit ratings, and year-end bonuses.
How to read it
Compare the year-end cash and debt with the quarterly figures. A company that is net cash only on 31 March and borrowed on 30 June is showing you the window.
What to watch
Auditors test cut-off, but a legal sale on the last day still counts. The analytical test is the reversal in the next quarter.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.