Compute goodwill created when buying a company.
Please do not make financial decisions based on these results.
What is the Goodwill Calculator?
Compute goodwill created when buying a company. To use the Goodwill Calculator, enter purchase price, fair value of assets, fair value of liabilities; it returns goodwill, net identifiable assets, and shows them instantly as you type.
Where the Goodwill Calculator fits
Compute goodwill created when buying a company. The main figure it returns is the Goodwill, worked out from the values you enter.
It belongs with the other accounting & microeconomics tools. If you are comparing options or checking a result from another angle, try the EBIT Calculator, EBT Calculator — Earnings Before Tax or the Revenue Calculator.
How to use the Goodwill Calculator
- Enter your numbers. Start with Purchase price ($), Fair value of assets ($), Fair value of liabilities ($). Use numbers from the same accounting period so the ratios are comparable. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Goodwill, and the cards below show Net identifiable assets. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Goodwill Calculator using the default values shown in the calculator above:
Inputs
| Purchase price ($) | 12,000,000 |
|---|---|
| Fair value of assets ($) | 10,000,000 |
| Fair value of liabilities ($) | 3,500,000 |
Results
| Goodwill | $5,500,000.00 |
|---|---|
| Net identifiable assets | $6,500,000.00 |
With these inputs the calculator returns Goodwill: $5,500,000.00. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Purchase price ($) from 12,000,000 to 14,400,000 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Goodwill | $5,500,000.00 | $7,900,000.00 | +43.6% |
| Net identifiable assets | $6,500,000.00 | $6,500,000.00 | 0% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Goodwill Calculator reports Goodwill and net identifiable assets. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. The result is only as accurate as the numbers you enter and the formula shown above. It is for information, not financial, tax or legal advice.
Frequently asked questions
What is goodwill?
The amount paid above the fair value of identifiable net assets.
What is the cash conversion cycle?
It is DIO plus DSO minus DPO: the days between paying suppliers and collecting from customers.
What is the difference between EBIT and EBITDA?
EBITDA also adds back depreciation and amortization, so it approximates operating cash profit.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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