A company’s valuation depends on a number of factors which include both tangible and intangible assets. Depending on the industry of your business the split of tangible and intangible assets determining the company’s valuation changes accordingly. An experienced valuation expert will conduct an in-depth analysis about the industry and would value both assets in a fixed industry standard ratio.
This is where Pure Value Global helps companies of all types. To learn more about your company’s valuation, kindly get in touch with our team. We have decades of experience of working with companies in India, Middle East, USA and UAE; you can call us at +91 9311505553 or write to us at info@purevalueglobal.com today!
Here’s how tangible and intangible assets contribute to your company's valuation and their worth.
What are Tangible and Intangible Assets?
Companies are built on both physical and non-physical assets. Both are valuable to accompany in their own sense and vary in impact and quantity as per the industry. Here is a quick look on what tangible and intangible assets actually are.
Intangible Assets
Intangible assets are digital or non-physical assets which help determine a company’s worth to a certain extent. Examples of Intangible assets are such as:
● Trademarks and Copyrights: Assets like Brand names can be filed for trademark by companies which showcase their specific quality. For example, Nike’s tag line “Just Do It” instantly reminds customers about the brand and is a trademark which no other company can use worldwide.
● Patents: Companies with more patented technologies tend to archive more growth and higher valuation markers.
● Qualification of Stakeholders: Stakeholders play an essential role in formation of the company’s backbone. For example, when a company’s founding team has been qualified from renowned institutions, their valuation tends to overpower the ones with less stakeholder qualification.
Pure Value Global’s expertise lies in valuing companies from different sectors or industries.
Intangible assets are non-monetary, i.e. they do not directly reflect in a company’s bank account or financial statements; however, an increase in revenue, profits and other monetary gains can be achieved through intangible assets of a company.
Tangible Assets
Physical assets owned by a company are simply called tangible assets. Here are a few examples of tangible assets in businesses.
● Real Estate owned by the company
● Raw Materials and Inventory of Finished goods
● Cash and Investments
● Equipments used used as machines and computers
Thus tangible assets comprise of those which appreciate or depreciate in value over time and have a finite lifespan.
Such as raw material kept in the company stock has a certain expiry date in most cases, machinery and equipment owned by the company needs time to time replacement and all the tangible assets accompanying are at risk of damage whereas intangible assets are immune to damage.
Which type of assets are more important for a company’s valuation: Tangible or Intangible?
The importance of tangible and intangible assets both are immense for a company’s growth trajectory. The ratio of the importance of both depends from industry to industry however a proper balance is important.
One cannot use the same balance of tangible and intangible's for each and every company in different industries. This is where Pure Value Global’s experience in company valuation comes in handy for entrepreneurs and business owners.
We’re experts in dealing with all kinds of industries such as Pharma, NBFCs, Fintech, IT and we even assist AI companies for their business valuation needs with our team of 50+ consultants and experience with 250+ domestic and international businesses since last 15+ years; ring us up at +91 9311505553 or write to us at info@purevalueglobal.com to gain access to valuation consultants for your business.
As you get in touch, our team conducts an in-depth analysis of your requirements, your industry, then values your tangible and intangible assets and crafts a valuation report for purposes like IPO valuation, ESOP valuation and others.
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Companies rely on both types of assets as they pass through different stages of growth. Intangible assets play an essential role in building long term strategy to outperform competition in a business landscape.
Whereas tangible assets are physical assets which are directly related to the execution of tasks in a company.
Tangible assets include assets such as machinery whereas intangible assets consist of non physical assets such as copyrights, patents and knowledge of stakeholders.
Pure Value Global is committed to contribute to this mission of supporting companies by helping you with the right guidance for getting your business valued from top industry experts, being an IBBI Registered Valuer with more than two decades of experience with different types of companies.
Also, not to forget we play an equally crucial role during insolvency, merger and acquisitions as well as when selling off company stakes for cashing out, lastly its also about planning valuation for ESOPs and at all these stages, Pure Value Global helps you navigate valuation processes easily.
For all types of valuation services or to consult directly with Pure Value Global, ring us up at +91 9311505553 or write to us at info@purevalueglobal.com to gain access to valuation consultants for your business.