Valuation of Goodwill for an Engineering Firm

Bhushan Lohar (), John Wade and Sean Walker
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Bhushan Lohar: Department of Systems Engineering, University of South Alabama, Mobile, AL 36688, USA
John Wade: Department of Systems Engineering, University of South Alabama, Mobile, AL 36688, USA
Sean Walker: Department of Systems Engineering, University of South Alabama, Mobile, AL 36688, USA

JRFM, 2024, vol. 17, issue 5, 1-13

Abstract: The concept of valuing personal and enterprise goodwill is a study in the art of quantifying subjective values. Sellers strive to maximize goodwill, while buyers strive to minimize goodwill. No persons are denying the existence of goodwill; rather, the debate is centered around the value of that goodwill. This paper seeks to define a holistic approach to fairly quantifying the value of goodwill for an engineering firm. The Graph Model for Conflict Resolution (GMCR), a decision tool grounded in game theory, is used to illustrate the inherent conflict around setting an accurate goodwill value and the inherent negotiation between buyers and sellers.

Keywords: goodwill; enterprise goodwill; personal goodwill; corporate finance; game theory (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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