How do you calculate a companys brand name worth? Ex. Disney, McDonalds

Gator1087

The value of the actual name of a company is a trademark, which is classified as an intangible asset. To figure out the cost of a trademark you add up the cost to purchase the trademark plus any fees associated with the purchase, such as attorney fees, consulting fees, etc. Any costs of successfully defending the trademark in court are capitalized as well.

There is also something called goodwill, which is the value of all other unidentifiable intangible assets associated with the brand or company's name. For example, Disney's ability to make successful movies lies in their reputation and innovation, which is hard to assign a value to. Goodwill can only be determined if a company is sold. To calculate goodwill you add up all assets owned by the company and subtract all of the liabilities. You then compare that number to the selling price of the company. Any excess of the selling price over that total is assigned of goodwill.

merrymerry

That is where I am confused...I was thinking that if the balance sheet should intangible assets and goodwill I should add them and that may be the answer or would that be incorrect? Then I thought it should be all assets. Another thought I had was calculated bookvalue to market value ratio.