Home page               Download material                Accounting topics                Accounting dictionary                Financial calculators

Home Accounting Dictionary Letter C Capitalization of Average Profit Method Definition:
 
 

A   B   C   D   E   F   G   H   I   J   K     M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z

 

Capitalization of Average Profit Method Definition:

Under this method, the business unit is valued by applying the following formula:

Total Value of the Firm = (Average Maintainable Profit / Normal Rate of Return) 100

After calculating the value of the firm using above formula, the net assets of the business is deducted from this and the balance is the value of goodwill.

New Page 1

A D V E R T I S E M E N T

 

 

 

 

 

 

Home                         Download material                         Contact us                         Privacy policy                         Link to us                         Advertise

Copyright 2011