Herfindahl-Hirschman Index (HHI)

The effect a brand has on how customers think and behave: their awareness of it, the associations and perceived quality they attach to it, and their loyalty to it (the Aaker and Keller models). Brand equity is a consumer and marketing concept, measured with surveys, tracking studies, retention and price premium data, and it influences pricing power, customer loyalty and market share.

A reduction in the value of an asset caused by external factors such as market shifts, regulatory changes, or competitive disruption, rather than physical deterioration or functional limitations. Economic obsolescence is particularly relevant when valuing intangible assets whose useful lives are sensitive to technological and market dynamics.

The economic return generated by a company's intangible asset base, expressed as income attributable to intangible assets divided by their estimated value. Yield on intangible assets provides a measure of how effectively a firm is monetising its intellectual property, brand, customer relationships, and other non-physical resources.

A pricing strategy in which a company sets its selling price by adding a fixed percentage to the cost of production or acquisition. The ability to sustain a high mark-up is often a direct reflection of intangible asset strength — particularly brand equity, product differentiation, and switching costs — and is a key indicator of competitive moat.

The total revenue opportunity available for a product or service if it achieved 100% market share. TAM represents the theoretical maximum market size and is used by investors to assess the scale of opportunity and the potential ceiling for a company's growth.

An assessment of the sustainability, predictability, and growth trajectory of a company's revenue streams, examining factors such as the proportion of recurring versus one-time revenue, customer concentration, contract duration and renewal rates, pricing power, and the distinction between organic and acquisition-driven growth. Revenue quality analysis is a core component of financial due diligence in M&A transactions and directly impacts the selection of appropriate valuation multiples.

A ratio used to estimate the value of a company by comparing its market value or enterprise value to a financial metric such as revenue, EBITDA, or earnings. Higher multiples typically reflect stronger growth prospects, margin quality, and intangible asset positions.

The ratio of a company's market value to the replacement cost of its assets, proposed by economist James Tobin. A Tobin's Q greater than one suggests that the market values the firm above its tangible asset base, with the excess often attributable to intangible assets such as brand, technology, and human capital.

The AI Valuation Premium: How AI Capability Affects Company Value

AI-enabled companies trade at 25-40% higher multiples than peers, but not all AI capability is created equal. This article examines what drives the AI valuation premium, how to assess whether it is justified, and what happens when the premium unravels.

What ESG-related intangible assets are gaining recognition?

ESG-related intangible assets include sustainability certifications, carbon credits, green brand equity, social licence to operate, ESG data systems, and responsible supply chain relationships.

How much of a company's value is intangible?

For S&P 500 companies, over 90% of market capitalisation is attributed to intangible assets. For typical SMEs, the proportion ranges from 50-85% depending on the industry and business model.

How do you measure brand value?

Brand value is most commonly measured using the Relief from Royalty method, which estimates what the business would pay to licence its brand if it didn't own it, discounted to present value.