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THE FINANCIAL BRAND VALUE AND THE COMPANY BOOK VALUE AS THE PREDICTORS FOR THE COMPANY MARKET VALUE

R. Skalicky

Abstract

Many authors (e.g. Aaker [1], Keller [2]) have highlighted the importance of the brand among the companyВ’s exploited assets. A number of papers dealing with the company brand and its valuation as a companyВ’s important intangible asset highlight the growing importance of this asset within the companyВ’s exploited set of assets. The focus is particularly on the brand ability to influence the consumer behavior and thereby achieve economic advantages compared to competitors in the form of higher profit margins, a higher market share, stability of cash flow and so on. Some authors (e.g. Larkin, [3]) claim that brand value represents a substantial proportion of the company market value. The traditional measure used as a predictor for company market value is book value (BV) or its relation to market value known as P/BV. The aim of this paper is to verify using data on the financial brand valuations, company book values and company valuations on public markets whether the financial brand valuations are better than or comparable to book value as predictors for future company market valuations. The Granger causality test methodology is used for the verification.

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