Question

What are the Factors affecting value of the Goodwill?​

Answer 1

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$\mathtt{Here\:is\:ur\:@nswer}$ :

⎇ Factors affecting value of the Goodwill are :-

i.) Favourable location of the business

ii.) Efficiency of management

iii.) The longevity of the business

iv.) Nature of goods

v.) Profession of license

vi.) Monopolistic and other rights

vii.) Risk involved

viii.) Trend of profit

ix.) Future consumption

Answer 2

Factors affecting the Goodwill

The factors affecting goodwill are as follows:

1.Location :

If the firm is located at a central place, resulting in goodsale, the goodwill tends to be high.

2.Nature of Business :

A firm that produces high value products or havinga stable demand is able to earn more profits and therefore has moregoodwill.

3.Efficient management :

A well managed firm earns higher profit andso the value of goodwill will also be high.

4.Quality :

If a firm is known for the quality of its products the valueof goodwill will be high.

5.Market Situation :

The monopoly condition to earn high profits whichleads to higher value of goodwill.

6.Special Advantages :

The firm has special advantages like importinglicenses, long term contracts for supply of material, patents, trademarks,etc. enjoy higher value of goodwill.