Intangible Assets: Mkt to Book Why are these ratios not equal to 1.00? What do these ratios say about intangible assets? http://finance.yahoo.com/ 10 Aug 09 Microsoft Hewlett Packard Symbol MSFT HPQ Market value per share $ 23.35 $ 43.50 Book value per share $ 4.41 $ 17.02 MV/BV 5.29 2.56
Growing Importance of Intangible Assets The Source of Value Has Shifted From Tangible to Intangible Assets Intangible Assets Tangible Assets 1982 1992 1 2000 2 percentage of market value related to…
Contributions to Market Value Market Value Financial Capital Intellectual Capital Focus of Traditional Accounting Systems Social Capital Focus of Most New Performance Models Focus of Ethical Investors and Some Performance Models
Contributions to Market Value Market Value Financial Capital Intellectual Capital Human Capital Structural Capital Customer Capital Organizational Capital Social Capital
Contributions to Market Value Market Value Financial Capital Intellectual Capital Social Capital Environmental Capital Community Capital Prevention Remediation Employees Neighbors
Example: CMP Media Company founded by Leeds family
From website: “CMP Media's success has been built on a set of principles that has served its employees, customers, readers and suppliers well for more than 30 years.”
Be a great company to do business with for customers and suppliers.
Be an excellent company to work for – able to hire, motivate and develop outstanding, diverse people who work together harmoniously toward a common objective.
Provide only superior products and services.
Contribute actively to a better social and physical environment.
Be profitable to provide the resources for future growth, quality and financial stability.