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Method of Valuation of Goodwill - Chart.pptx

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Kumarasamy Dr.PK
Kumarasamy Dr.PK

Goodwill valuation

Education
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Methods of Goodwill 1. Average Profit AP X Purchase Years Simple/Weighted Average Profit 2. Super Profit Average Profit Adj. Avg. Profit Normal Profit Average Capital Employed x NRR Super Profit Avg.Profit-Normal Profit SP x Purchase years 3. Capitalization Average Profit Value of Business Avg.Profit/NRR X100 Value of Business – Capital Employed Super Profit Adj.Avg.Profit Normal Profit = Capital Employed X NRR Super Profit= Adj.Avg.Profit-NP Super Profit / NRR x 100 4. Annuity Method Average Profit Normal Profit = Capital Employed x NRR Super Profit = Avg.Profit-Normal Profit Super Profit X Annuity Value

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Method of Valuation of Goodwill - Chart.pptx

  • 1. Methods of Goodwill 1. Average Profit AP X Purchase Years Simple/Weighted Average Profit 2. Super Profit Average Profit Adj. Avg. Profit Normal Profit Average Capital Employed x NRR Super Profit Avg.Profit-Normal Profit SP x Purchase years 3. Capitalization Average Profit Value of Business Avg.Profit/NRR X100 Value of Business – Capital Employed Super Profit Adj.Avg.Profit Normal Profit = Capital Employed X NRR Super Profit= Adj.Avg.Profit-NP Super Profit / NRR x 100 4. Annuity Method Average Profit Normal Profit = Capital Employed x NRR Super Profit = Avg.Profit-Normal Profit Super Profit X Annuity Value