Goodwill Valuation Methods

i.Average Profit Method = Future Maintainable Profit X No. of yrs              purchased

ii.Super Profit Method = (FMP – NRR X Capital Employed) X No. of yrs purchased

  = Super Profit X NYP

iii.Capitalisation Method = Super Profit

                                                       NRR

*Use closing capital employed

iv.Capitalisation of Super Profit Method = Super Profit

                                                                                    NRR

*Use average capital employed

v.Annuity Method = Super Prft/FMP X P.V. of annuity factor