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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today -- Ignore unavailable to you. Want to Upgrade?

To: Ken Salaets who wrote (1323)	11/5/1997 1:20:00 PM
From: Tom Robertson	Read Replies (3) \| Respond to of 19331

Ken, Lou, Goodwill is the purchase price paid in excess of the value of the assets. For instance, if you buy a business that includes a building and inventory, you can easily value the building and the inventory. But the seller is going to make you pay more for the business than just the value of those two items. This extra amount is goodwill, and is the value of things like the business' exisitng work force, customer base, suppliers etc. Goodwill is an asset on the balance sheet and is written off ratably over a period of time, say 20 years. While clearing the goodwill off DCI's books reduces the current gain on the sale of the contract, in the future quarters there will be no more goodwill to write off, thereby increasing future quarter's EPS. I hope this helps. Tom