The volume premium method evaluates cash flow based on the surplus generated by the volume premium, which represents additional market share that can be fully attributable to the brand. Other factors affecting market share, such as market imperfections, must be removed from the assessment. In addition, costs incurred to secure or expand market share must be deducted from cash flow. When evaluating brands, price premiums and possible cost savings must also be considered.
Brand Valuation Price Premium Method cash Philippines WhatsApp Number List flow based on the price premium a brand can achieve. To determine the price premium, comparisons were made to unlabeled products and brand-independent factors that contributed to the price premium were removed. However, since there are very few unbranded products in reality, comparisons must be made with the brands with the lowest brand strength.
Additional Expenses Needed To realize the price premium, cash flows must be deducted when evaluating cash flows. Brand valuations must also take into account the possible benefits of cost savings and volume premium approaches. Brand Valuation Profit Split Method The profit split method values cash flows at the present value of the economic profit attributable to the brand. Economic profit is defined in the standard as net operating profit minus capital expenditure.