List the factors affecting goodwill.

1.	List the factors affecting goodwill.
Answer» Following are the important factors affecting the goodwill of a firm 1. Nature of business -A firm producing goods having constant demand will have more goodwill. 2. Suitable location – A firm which is situated in a favourable locality will have more goodwill. 3. Efficiency of management – if the management of a firm is efficient, it will have high goodwill. 4. Running period – a firm which is running for a long period of time, will have more goodwill. 5. Requirement of capital – if a firm requires a lesser amount of capital, it will have high goodwill. 6. Market situation – if competition in the market is limited, it helps a rm to have more goodwill.

Answer»

Following are the important factors affecting the goodwill of a firm

1. Nature of business -A firm producing goods having constant demand will have more goodwill.

2. Suitable location – A firm which is situated in a favourable locality will have more goodwill.

3. Efficiency of management – if the management of a firm is efficient, it will have high goodwill.

4. Running period – a firm which is running for a long period of time, will have more goodwill.

5. Requirement of capital – if a firm requires a lesser amount of capital, it will have high goodwill.

6. Market situation – if competition in the market is limited, it helps a rm to have more goodwill.

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