The Finance Dictionary

This information provides users with thorough and reliable meanings to all the most common, and even uncommon, financial terms

Financial Terms Beginning With The Letter G

GAAP

GAAP stands for generally accepted accounting principles. The financial statements of a business must be prepared according to GAAP. The primary source for generally accepted accounting principles is the CICA handbook.

GIC

A GIC is a guaranteed investment certificate. GICs are interest-bearing investments which can be short or long term. Funds are normally locked in until the maturity date, although some GICs have the option of cashing in early.

See also index-linked GIC.

Goodwill

When one corporation acquires another, goodwill (an intangible asset) will be shown on the purchaser's consolidated balance sheet if the purchaser pays more than the agreed-upon value of the fixed assets acquired.

Goodwill is calculated as the total cost of the acquired corporation minus the agreed-upon value of the assets acquired minus liabilities assumed. Prior to 2002, a portion of goodwill was required to be amortized, or written off, by the corporation on their income statement every year. Beginning in 2002, the value of goodwill on the balance sheet need not be written down unless it is determined that there has been an impairment in the value of the goodwill.

Gross margin

Gross margin, also called gross profit, is determined by deducting cost of goods sold from total revenue.

Gross margin %

The gross margin percentage is gross margin divided by total revenue.

Growth investor

A growth investor purchases shares in companies which are expect to grow their revenues and earnings at above-average rates.

See also momentum investor and value investor.