Brand valuation

It is the process used to calculate the value of brands. Historically most of a company value was in tangible assets such as property, stock, machinery or land. This has now changed and the majority of most companies value is in intangible assets such as their brand names

a) relief from royalty method – based on how much the brand owner would have to pay to use it’s brand, if uses dcf to capitalise future branded cash flows
b) excess earning methods – to calculate the earnings above the profit required to attract investor
c) price premium method – if is based on a capitalisation of future profit stream premiums attributable to a business brand above the revenues of a generic business, without a brand
d) capitalisation of historic profit method – it is based on the capitalisation of profits earned by the brand

a) P/E ratios method – price to earning ratio – it multiples the brands profit by a multiple derived from similar transactions of profits to price paid based on the value of reported brand values
b) Turn over multiples method – it multiples the brands turnover by a multiple derived from similar transactions

a) creation cost methods – estimates the amount that has been invested in creating the brand
b) replacement value method – estimates the investment required to build a brand with a similar market position and share