I have been refreshing my analysis of the proportion of enterprise value that is represented by brand value – using the data published by Brand Finance, Eurobrand, Interbrand and Millward Brown.
This analysis is for companies with “normal” balance sheets where brand value should be expressed as a percentage of total enterprise value (market cap plus long-term debt) since these are the liabilities that are funding the asset base of the company. This means eliminating the 56 financial services companies due to the specific nature of their balance sheets (I have done a separate analysis of these – see my post “Brand Value in Financial Services“).
That leaves us with a data set of 856 observations of 226 brands owned by 191 companies that appeared in 9 surveys produced by the above 4 consulting firms over the past 3 years.
The headline finding is that, on average over the past three years, brand value represented 17.2% of the enterprise value of these 193 companies.
Based on the brand value estimates from just the most recent league table from each of the 4 consulting firms, the proportion of enterprise value represented by brand was 16.3% – brand value totalled an aggregate $2.4 trillion dollars out of total enterprise value of $14.8 trillion (188 companies, 219 brands).
That makes brand a very significant component of the intangible value of these companies. For the record, the tangible asset base of these 188 companies came to $6.1 trillion – 41.0% of their enterprise value.