Goodwill Calculator

Calculate Goodwill (G)





Formula

The formula to calculate goodwill is:

\[ G = P - A - L \]

Where:

What is Goodwill?

Goodwill is defined as the difference between the purchase price of a business and the fair market value of the business and its liabilities. It represents the intangible value of a business, such as its brand reputation, customer relationships, and intellectual property.

Example Calculation

Let's assume the following values:

Using the formula to calculate goodwill:

\[ G = 1,000,000 - 700,000 - 200,000 = 100,000 \]

The goodwill is $100,000.