3. Valuing and Evaluating Companies and Their Intellectual Capital

Determining a company’s market value

What is the difference between labor and human capital?

The Intellectual Capital Index (ICI) applied

How and why does intellectual capital vary by industry?

There are entire volumes written solely on the subject of valuing companies, but to greatly simplify a complex topic, company valuations are based on the discounted value of expected future cash flows. Every analyst following a company maintains a cash flow model that is constantly updated for news that will materially affect both the company’s valuation and advice given to investors regarding the fair value of the company’s shares (and prospective fair value). Those future cash ...

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