Question

what is the formula to find out capitalisation of profit​

Answer 1

Answer:

Capitalization means to capitalize the profit for getting the value of ideal capital to earn this profit at a normal rate of return. Capitalized Profit= Averge Profit*100/Normal Rate of Return. It is a method to find out the goodwill of the Firm

Answer 2

Answer:

Average Profit is the sum of profit of different years divided by no. of total years. Capitalization means to capitalize the profit for getting the value of ideal capital to earn this profit at a normal rate of return. Capitalized Profit= Averge Profit*100/Normal Rate of Return.