Strategic Performance Management and Business Valuation
This query is : Resolved
Utkarsh Joshi
(Querist)
16 November 2024
How many years of purchase should we assume for calculation of goodwill by super profit method if question doesn't specify us anywhere?
Dhirajlal Rambhia
(Expert)
17 November 2024
In the Super Profit Method of goodwill calculation, the number of years of purchase typically depends on the context of the business, industry standards, and the stability of the profits. For high-risk or unstable businesses, fewer years (e.g., 3/4 years) may be used, whereas for stable, high-growth businesses, more years (e.g., 5 years or more) could be assumed.
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