Difference between average profit and super profit. Formula
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Average Profit Method:
Under this method the value of Goodwill is calculated by multiplying the Average Future profit by a certain number of year's purchase. The first step under this method is the calculation of average profit based on past few years' profit.
Total Profit of past years by Number of Years,
.On the other hand Super Profit is calculated by deducting Normal Profits from the Average Profits as shown by the formula given below:
Super Profit = Average Profit – Normal Profit.
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