Interested to Buy Any Domain ? << Click Here >> for more details...
how does one calculate goodwill by super profit method
- 2 Answers
- 26671 Views
- I also Faced
- E-Mail Answers
Answer Posted / nagaraj
When the actual profit is more than the expected profit or
normal profit of a firm, it is called ‘Super Profit.’ Under
this method goodwill is to be calculate of on the following
manner:
Goodwill = Super Profit x Number of Years Purchase
CAPITAL EMPLOYED = Rs. 7,30,49,249
Financial Year Product
2006-07 2,60,40,742.63
2007-08 77,77,726.00
2008-09 1,34,84,208.75
2009-10 2,83,01,883.14
TOTAL 7,56,04,560.00
(Rounded off
Average Profit = Rs. 75604560 /4 = Rs. 1,89,01,140
Normal Profit = Rs. 7,30,49,249x 10/100 = Rs. 73,04,925
Super Profit = Actual/Average Profit - Normal Profit
Super Profit = Rs. 1,89,01,140-Rs. 73,04,925= Rs.
1,15,96,215
Goodwill = Rs. 1,15,96,215 x 3 = Rs. 3,47,88,645
| Is This Answer Correct ? | 36 Yes | 2 No |
Post New Answer View All Answers
Occasionally it is said that issuing convertible bonds is better than issuing stock when the firms shares are undervalued. Suppose that the financial manager of Decent Furniture Company does in fact have inside information indicating that the decent stock price is too low. Decent furniture earnings will in fact be higher than investor’s expectations. Suppose further that the inside information cannot be released without giving away a valuable competitive secret. Clearly, selling shares at the present low price would harm Decent’s existing shareholders. Will they also lose if convertible bonds are issued? If they do lose in this case, is the loss more or less than it would be if common stock is issued? Now suppose that investors forecast earnings accurately, but still under value the stock because they overestimate Decent’s actual business risk. Does this change your answer to the questions posed in the preceding paragraph? Explain.
Does provisions need to be subtracted from reserves if net worth is calculated on the basis of share capital based method
what is mean by tax holiday?
hat is the meaning of the capital ique,and hat is capital,and ahat is ique
Is it possible to list only a portion of Equity Shares leaving the balance as unlisted?
How often is the stock market ticker updated? 15sec? 30sec?
analyses of Cost control
STATE THE DIFFERENCE BETWEEN BANKING FIS AND NON BANKING FIS
I want to validate Customer credit payment with customer invoice, When billing time, the system check the customer credit payment, if customer credit is lesser than customer bill, system should not allow the billing further process. Can I configure in sap
what is rate of service tax and form no. of service tax ? wt rules of service tax a particuler once .?
MY QUESTION IS THAT IS WHEY WE SELL THE UPS IN THE MARKET BUY FROM THE IMPORT WHAT THE DUTY WE WILL FORWARD TO THEM.
i have cleared c.s inter. for the purpose of training i want to know the companies who are providing training of c.s in punjab state.please help me in this.
Treatment of Government grant and its utilization in P
I want to know that , If we called a person for one day for drive our company van or any other purpose. so how it will accounted in our (i.e companies) Books of accounts....
what is correct accounting treatment for preliminary exps and pre-operative Expsas per AS 26? or any other applicable AS?
