What is Goodwill in Business?

In certain market situations, particularly in mergers and acquisitions, the term “goodwill” is often used. Goodwill in business is a crucial component of the business valuation process because it lets the acquiring company or simply the acquirer know what they are in for in purchasing the target enterprise. To understand goodwill in business, you need to understand its effect on the operation and acquisition processes. When was the last time you walked into Macy’s or Starbucks? How did you feel about the steep prices you paid for the goods? Did you feel that they worth their price? The answers to these questions should help you better understand goodwill.