Goodwill to Assets

Quick Definition

Determines how much goodwill the company is recording in relation to its assets.

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Goodwill to Assets Formula

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Calculate Goodwill to Assets with our online Goodwill to Assets Calculator.

Explanation of Goodwill to Assets

The Goodwill to Assets Ratio measures how much Unamortized Goodwill the company is recording for its current level of assets (Total Assets). Most companies have some form of Goodwill, but the main use of this ratio is to monitor excessive use of Goodwill.

Importance of Goodwill to Assets

An increasing Unamortized Goodwill to Assets Ratio may indicate the company is recording a higher proportion of Unamortized Goodwill, as long as its Total Assets are about the same level over the same time span. Mergers, or acquisition of assets from another company can explain sharp increases, but one has to watch this ratio and compare its results with other companies in the same industry to gauge how well the company is managing its Goodwill.

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