Goodwill is the excess of the purchase price over the fair value of the net assets acquired. It is calculated as the purchase price minus the fair value of net assets. There are three main methods to value goodwill: the super profits method, capitalization method, and annuity method. The super profits method values goodwill as the super profits (profits above a normal rate of return) multiplied by the number of years of purchase. The capitalization method values goodwill as the normal capital employed minus the actual capital employed, divided by the normal rate of return. The annuity method values goodwill as the super profits multiplied by the annuity value of the number of years of purchase.
· Read the article and summarize.· Discuss your reaction to th.docxoswald1horne84988
· Read the article and summarize.
· Discuss your reaction to the article
· Generate 2-3 recommendations for an organization needing to create a more "thriving" environment.
· Your recommendations should be written as if you were an OB Consultant and were trying to convince top leadership the value of a "thriving" environment.
Be sure to utilize your breadth of knowledge about OB. You will be graded on your ability to use the concepts from our course to strengthen your argument. For example: performance management, motivation, leadership, and/or job design would likely relate to the article but I am sure other concepts would also fit.
**Please write 2 pages. Please provide high quality.
Aswath Damodaran! 1!
Financial Statement Analysis!
“The raw data for investing”
Aswath Damodaran! 2!
Questions we would like answered…!
Assets Liabilities
Assets in Place Debt
Equity
What is the value of the debt?
How risky is the debt?
What is the value of the equity?
How risky is the equity?
Growth Assets
What are the assets in place?
How valuable are these assets?
How risky are these assets?
What are the growth assets?
How valuable are these assets?
Aswath Damodaran! 3!
Basic Financial Statements!
The balance sheet, which summarizes what a firm owns and owes at a
point in time.
The income statement, which reports on how much a firm earned in
the period of analysis
The statement of cash flows, which reports on cash inflows and
outflows to the firm during the period of analysis
Aswath Damodaran! 4!
The Accounting Balance Sheet!
Assets Liabilities
Fixed Assets
Debt
Equity
Short-term liabilities of the firm
Intangible Assets
Long Lived Real Assets
Assets which are not physical,
like patents & trademarks
Current Assets
Financial InvestmentsInvestments in securities &
assets of other firms
Short-lived Assets
Equity investment in firm
Debt obligations of firm
Current
Liabilties
Other
Liabilities Other long-term obligations
Figure 4.1: The Balance Sheet
Aswath Damodaran! 5!
Principles underlying accounting balance
sheets!
An Abiding Belief in Book Value as the Best Estimate of Value: Unless
a substantial reason is given to do otherwise, accountants view the
historical cost as the best estimate of the value of an asset.
A Distrust of Market or Estimated Value: The market price of an asset
is often viewed as both much too volatile and too easily manipulated
to be used as an estimate of value for an asset. This suspicion runs
even deeper when values are is estimated for an asset based upon
expected future cash flows.
A Preference for under estimating value rather than over estimating it:
When there is more than one approach to valuing an asset, accounting
convention takes the view that the more conservative (lower) estimate
of value should be used rather than the less conservative (higher)
estimate of value.
Aswath Damodaran! 6!
Measuring asset value!
.
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
The Art Pastor's Guide to Sabbath | Steve ThomasonSteve Thomason
What is the purpose of the Sabbath Law in the Torah. It is interesting to compare how the context of the law shifts from Exodus to Deuteronomy. Who gets to rest, and why?
2. What is Goodwill?
Goodwill is excess of
purchase price over share of Net Assets (Fair Value)
Goodwill is Intangible Asset
Goodwill is Reputation , higher earning of income , etc
Goodwill = Purchase price – FV of Net Assets acquired as on date of
purchase
3. Methods of valuing Goodwill :
Super profits method
Capitalization method
Annuity method
4. Super profits method :
Super profit * no. of years of purchase
Future
Normal profit
Maintainable
Profit
Capital Normal Rate Of
Employed Return
5. Super profits method
Normal profit = capital employed * Normal Rate of
Return
Super Profit = FMP – Normal Profit
Goodwill = Super Profit * no. of years of purchase
6. Capital Employed :
Share Holders Fund Approach
Considers Long Term
Asset Side Approach
Debt as LIABILITY
Liabilities side Approach
Long Term Fund Approach
Asset Side Approach Considers Long Term
Debt as Capital
Employed
Liabilities side Approach
7. LONG TERM FUND APPROACH
Asset Side Rule:
Fixed Assets XXX
Trading Investments XXX
Current Assets XXX
XXXX
LESS: Current Liabilities XXX
CAPITAL EMPLOYED XXXX
8. Liabilities Side Rule :
Equity Share Capital XXX
Preference Share Capital XXX
Reserves & Surplus XXX
LONG TERM DEBT XXX
XXXX
LESS: NON TRADE INVESTMENTS XXX
Miscellaneous exp not written off XXX
CAPITAL EMPLOYED XXXX
Non Trade Investments should not form part of Capital Employed (NON
OPERATING ASSETS)
EX: Fixed Deposit
Land (which is not used for business & do not yield any income)
9. Capital Employed Represents the fair value of
net assets invested in the business for earning profits
Investment in Associate , Subsidiary or Joint
venture is considered as “Trade investments.”
Deduct non trade investments - liability side
Ignore non trade investments - asset side
10. Share Holders Fund approach:
Asset Side Rule:
Fixed Assets XXX
Trading Investments XXX
Current Assets XXX
XXXX
LESS: Current Liabilities XXX
*LONG TERM DEBT XXX
CAPITAL EMPLOYED XXXX
11. Liabilities Side Rule :
Equity Share Capital XXX
Preference Share Capital XXX
Reserves & Surplus XXX
XXXX
LESS: NON TRADE INVESTMENTS XXX
Miscellaneous exp not written off XXX
CAPITAL EMPLOYED XXXX
Asset side approach is preferd
Capital employed it to be calculated on
fair value (don’t consider book values
while calculating CE ON FV BASIS)
12. CAPITAL EMPLOYED
Closing capital
Average capital employed
employed
OCE + ½ CCE - ½
OCE+CCE of current of current
2 year profit year profit
OCE = Opening Capital Employed
CCE = Closing Capital Employed
It is assumed that profits are earned evenly during
the year.
13. Treatment of proposed dividend :
proposed dividend is employed in the business
through out the year
proposed dividend is current liability but it is
apportioned from P&L A/c
therefore treat proposed dividend as Capital
Employed
14. Treatment of Provision for Tax:
We pay Tax in form of Advance Tax
It appears to be apportionment from P&L A/c
Actually this is not employed in the business as
money already gone in form of Advance Tax
Not considered as Capital Employed
15. Future maintainable
profit (FMP)
Trend Method
Average Method
Weighted Average Method
By taking past years profits apply any one of the
above tools then we can find FMP
Weighted average method is used when there is up or
down trend
Recent years should be given more weight
16. Adjustments to be made to profits while
calculating FMP:
Extra ordinary items and non recurring items should not be
considered.
Abnormal items should be eliminated
Income from non trade investments should be eliminated
Adjust for any change in Accounting Policy
Incase of change in tax rate
add back – already paid tax
reduce – Tax payable in future
All above changes should me made to yearly profits.
After adjustments ADJUST SPECIAL FUTURE CHANGES
17. Capitalization method
Capitalization
method
Normal
Actual capital
capital
employed
employed
FMP NRR
18. Capitalization method
Goodwill = Normal Capital Employed –
Actual Capital Employed
NCE – ACE
NCE = FMP / NRR
OR
GOODWILL = Super profit / NRR
19. Annuity method :
Annuity
method
Super Annuity 1
profit value (1+r)^n
Super Profit * Annuity value = GOOD WILL
20. Annuity
Cristal Clear
method
No. of years
of purchase
Capitalization
Not clear
method
NRR can be calculated as under also if not
directly given in the problem
NRR = 1/PE Ratio
21. Closing Capital Employed Vs Avg Capital Employed
Capitalization method :
Under this method closing
capital employed should be taken for
calculation of GOODWILL unless the
problem specifically requires
application of Avg Capital employed
22. Super Profits Method :
Under this method closing capital employed should
be generally applied except in following situations
• Specifically asked in the problem
• Information about opening capital is given in
problem
• No changes prescribed in problem for closing
capital employed & FMP is calculated purely based
on past profits without adjusting for future changes