- Goodwill To Assets Ratio:
- What does Goodwill To Assets Ratio mean?
- The Goodwill To Assets Ratio is a financial measurement that compares the intangible assets like a brand name, customer list, or unique position in an industry to the total assets of the company in an effect to see if goodwill is being recorded properly.
Goodwill to Assets Ratio = Goodwill / Total Assets
A company ‘ABC International’ is asking $900 billion. The book value, according to its most recent balance sheet, amounted to $100 billion. Suppose there is no debt to be acquired. Therefore, the amount of goodwill being acquired at this purchase price would be $800 billion.
Applying the formula, Goodwill to Assets Ratio is:-
- = $800,000,000,000 / $900,000,000,000
- = 88.8%
- Jun 10, 2018
- Tool Launched