Category: Financial Terms

Goodwill Impairment Overview Goodwill impairment occurs when the recorded (carrying) value of goodwill on a company’s balance sheet exceeds its fair value. When acquired assets and liabilities no longer generate the expected future cash flows, the excess purchase price recorded as goodwill may be overstated and must be written down. The resulting charge is recognized…

Understanding Goodwill in Accounting Goodwill is an intangible asset that arises when one company acquires another for a price greater than the fair value of the target’s identifiable net assets. It represents non‑quantifiable strengths such as brand reputation, customer relationships, workforce expertise, and proprietary processes that justify an acquisition premium. Key takeaways Goodwill = Purchase…

Goods and Services Tax (GST) Key takeaways * GST is a value-added, indirect tax on goods and services consumed domestically. * Consumers pay GST at point of sale; businesses collect and remit it to the government. * Many countries use a single, nationwide GST rate; some use dual systems (federal + local). * GST simplifies…

Goodness-of-Fit Key takeaways * Goodness-of-fit tests assess how well sample data match an assumed probability distribution or expected frequencies. * Common tests: chi-square (categorical data), Kolmogorov–Smirnov (continuous distributions), Anderson–Darling (sensitive to tails), Shapiro–Wilk (normality for small samples). * Choose a test based on the data type, sample size, and whether tail behavior matters. Ensure expected…

Good ‘Til Canceled (GTC) Good ‘Til Canceled (GTC) orders let investors place buy or sell orders that remain open until they either execute at the specified price or the investor cancels them. Unlike day orders, which expire at the end of the trading day, GTC orders persist beyond a single session—although most brokerages set an…

Good This Week (GTW): What It Means and How It Works What is a GTW order? A Good This Week (GTW) order is a trading instruction that remains active until the end of the current trading week. If it is not executed before the close of the trading week, the order is automatically canceled. Key…

Good Faith Money Good faith money (also called earnest money) is a deposit a buyer gives to a seller to demonstrate serious intent to complete a transaction. It is typically held in escrow and credited toward the purchase price at closing. Depending on the contract terms, the deposit may be refundable under specified contingencies or…

Good Faith Estimate (GFE) Key takeaways A Good Faith Estimate (GFE) is a written estimate of the expected fees, costs, and terms for a reverse mortgage. Since October 2015, GFEs apply only to reverse mortgages; other mortgage types use loan estimate forms. Lenders must provide a GFE within three business days of receiving a borrower’s…

Good Delivery Good delivery means the transfer of ownership of a security from seller to buyer without impediment—i.e., all legal, documentary, and physical or electronic requirements for delivery have been satisfied. It is a necessary condition for settlement: if delivery is not “good,” the buyer may not be able to take or register the asset….

Good Credit: What It Means and How It Works What is good credit? Good credit describes a credit history and score that indicate a borrower is a relatively low credit risk. Lenders use credit scores from reporting agencies—most commonly the FICO score—to evaluate applications for loans, credit cards, and other forms of credit. Explore More…

Goldilocks Economy A Goldilocks economy is an economic state that is “just right”: steady growth, low inflation, and low unemployment without overheating or sliding into recession. The term evokes the children’s story—conditions that are neither too hot nor too cold. Because many variables must align, a Goldilocks economy is typically temporary. Key characteristics Steady GDP…

Golden Share A golden share is a special class of share that grants its holder exceptional voting or veto rights—most commonly the power to block changes to a company’s charter, key corporate decisions, or transfers of control. Governments and private companies use golden shares to preserve strategic influence over firms, especially when national security, critical…

Golden Rule of Government Spending What it is The golden rule of government spending is a fiscal principle that a government should borrow only to finance long-term investments (infrastructure, education, productive capital) and not to fund ongoing, current expenditures (salaries, transfer payments, routine operating costs). Current spending should be paid from tax revenues; borrowing should…

Golden Parachute: Definition, How It Works, and Controversy Key takeaways * A golden parachute is a contractual agreement that awards substantial benefits to top executives if they lose their jobs following a merger, acquisition, or takeover. * Typical benefits include cash severance, accelerated stock vesting, bonus payments, and continued insurance or pension coverage. * Golden…

Golden Handshake A golden handshake (also called a golden parachute) is a pre-negotiated severance package that guarantees substantial compensation to executives if they leave a company — typically following firing, takeover, restructuring, or retirement. Packages often include cash severance, accelerated stock vesting, bonuses, and continuing benefits. Key takeaways Golden handshakes are contract clauses that promise…

Golden Handcuffs Golden handcuffs are financial incentives and contractual arrangements designed to keep valuable employees at a company for a specified period. Employers use them to protect the investment made in recruiting, training, and developing top performers and to reduce turnover in roles that are hard to replace. Key takeaways Golden handcuffs are retention tools—financial…

Golden Cross A golden cross is a bullish technical chart pattern that occurs when a short-term moving average crosses above a long-term moving average. Traders interpret it as a signal that a market’s momentum has shifted from bearish to bullish and that a longer-term uptrend may be beginning. Key points Commonly seen when the 50-day…

The Gold Standard Introduction The gold standard is a monetary system in which a country’s currency value is directly tied to a fixed quantity of gold. Under this system, paper money could be converted into a specified amount of gold, which constrained money supply and linked international exchange rates to gold parity. Most nations abandoned…

Understanding Gold Options: Types, Mechanisms, and Trading Insights What is a gold option? A gold option is a derivative contract that gives its holder the right — but not the obligation — to buy or sell gold at a predetermined price (the strike) on or before a specified expiration date. Options can reference physical gold…

Gold Certificate: Meaning and Overview A gold certificate is a paper document that proves ownership of a specific amount of gold. When the U.S. dollar was tied to the gold standard, gold certificates were issued as currency equivalents and could be used like legal tender. Today, U.S. gold certificates are collectibles, while banks and bullion…

Gold Bug: What It Is, How It Works, and an Example Key takeaways A gold bug is an investor who strongly favors gold as a store of value and hedge against risks to fiat currencies. Gold bugs view inflation, expansive monetary policy, rising national debt, or fiscal mismanagement as reasons the U.S. dollar (and other…

Going Public: What It Means and How It Works What is going public? Going public is the process by which a privately held company offers its shares to the general public for the first time through an initial public offering (IPO). The IPO converts privately held equity into publicly tradable shares and requires extensive legal,…

Going Private — Definition Going private is a process that converts a publicly traded company into a privately held entity. After the transaction, the company’s shares are no longer traded on public markets and ownership is concentrated among a smaller group of investors or insiders. How It Works Going private typically occurs when shareholders, management,…

Going-Concern Value Definition Going-concern value is the total value a company has as an operating business—reflecting its ability to continue generating profits into the future. It incorporates both tangible and intangible elements, including expected future cash flows, brand strength, patents, and customer relationships. How it works The difference between a company’s going-concern value and the…

Going Concern What is a going concern? A going concern is a business that is expected to continue operating for the foreseeable future—commonly interpreted in accounting as at least the next 12 months. In accounting practice, a company is assessed as either a going concern or not; that assessment determines how assets and liabilities are…

Godfather Offer A Godfather offer is an overpowering takeover bid in which an acquirer offers shareholders a very generous premium over the target company’s current share price, making it difficult for the target’s board to reject without angering shareholders or appearing to breach its fiduciary duty. The term references the famous line, “I’m gonna make…

Goal Seeking Key takeaways Goal seeking finds the input value needed to produce a known output. It is commonly used in spreadsheet programs as part of what‑if analysis. Built‑in goal‑seek tools work when a single input variable must be solved; use more advanced tools (e.g., Solver) for multiple unknowns. What is goal seeking? Goal seeking…

Goal-Based Investing Definition Goal-based investing (GBI) is an investment approach that prioritizes achieving specific life goals on a personalized timeline—such as retirement, a child’s education, or a home purchase—rather than focusing primarily on maximizing portfolio returns or beating market benchmarks. How it works Instead of measuring success by relative performance against market indices, GBI evaluates…

Go-Shop Period A go-shop period is a clause in an acquisition agreement that allows a target company to solicit and consider competing bids for a limited time after accepting a firm offer. The original bidder’s proposal acts as a floor while the target seeks potentially better terms. Go-shop windows typically last one to two months….

Go-Go Fund: Definition, History, and Consequences What is a go-go fund? A go-go fund is a mutual fund that pursues an aggressive, high-risk strategy—typically concentrating on growth stocks and speculative securities—to try to achieve above-average returns. These funds prioritize rapid capital appreciation over preservation of capital, accepting higher volatility and the potential for large losses….

GmbH — Definition, requirements, and variants Key takeaways * GmbH stands for Gesellschaft mit beschränkter Haftung — “company with limited liability.” * It is the common private limited company form in Germany (roughly equivalent to an LLC in the U.S. or Ltd. in the U.K.). * Minimum nominal capital for a standard GmbH is €25,000…

Understanding glocalization Glocalization is the strategy of combining global reach with local adaptation: multinational companies offer standardized products or services but tailor them to local laws, culture, tastes, and consumer needs. The goal is to preserve the efficiencies and brand consistency of global operations while increasing local relevance and acceptance. Key points Glocalization adapts global…

Globex: What It Is, How It Works, and Its History Globex (officially CME Globex) is a continuously operating electronic trading platform for derivatives—futures, options, and commodity contracts—developed for the Chicago Mercantile Exchange (CME). Launched in 1992, it provides near‑24/7 global market access, supports a wide range of asset classes, and now accounts for the vast…

Globalization: Definition, History, Effects, and Challenges What is globalization? Globalization is the growing interconnection of national economies, societies, and cultures through the cross-border movement of goods, services, capital, people, ideas, and technology. Economically, it is driven by reduced trade barriers, advances in transportation and communications, and multinational business activity. The result is a more integrated…

Asset Class Breakdown: Meaning, Types, Example An asset class breakdown shows the percentage allocation of a portfolio across broad asset categories. It’s commonly provided for mutual funds, exchange-traded funds (ETFs), target-date funds, and other pooled investments to clarify the fund’s investment objective, risk profile, and return potential. What an asset class breakdown represents It expresses…