big bath

Definition

The strategy of writing off massive losses all at once to get the bad news over with, typically when a new CEO arrives and can blame everything on their predecessor. It's financial spring cleaning with someone else's mess.

Example Usage

The new CEO took a big bath in Q1, writing off everything remotely questionable so future quarters would look amazing by comparison.

Origin

Corporate finance slang from the 1980s, referring to washing away all the problems at once

Fun Fact

Taking a big bath is particularly popular in turnaround situations—tank one quarter spectacularly so every quarter after looks like a recovery story.

Source: Corporate accounting and restructuring terminology

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