Intangible Finance Standards

Intangible Finance Standards

Advances in Fundamental Analysis and Technical Analysis

1st Edition - June 7, 2005

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  • Author: Ken Standfield
  • eBook ISBN: 9780080478548

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Description

This book asserts that intangibles create financial transactions, not vice versa. It offers distinct, reproducible methods of valuing intangibles in intangible forms, with associated and meaningful financial values. It also presents new management frameworks in which all forms of intangibles can be classified, measured, managed, and reported.

Key Features

*A practical, hands-on guide to a new approach to valuing intangibles
*Progresses from simple to complex, using case studies that begin with short simple cases and progress to comprehensive real-life case studies
*Highlights the distinction between what is currently required by law and what is not required but will give firms a competitive edge

Readership

Financial Managers, students in MBA finance programs.

Table of Contents

  • PREFACE 2
    DEDICATION 2
    ACKNOWLEDGEMENTS 3
    TERMS & DISCLAIMERS 3
    CHAPTER 1: UPGRADING FUNDAMENTAL ANALYSIS 11
    CHAPTER 2: COMPETITIVE ADVANTAGE VALUATION 15
    Stock Prices Measure Competitive Advantage 15
    Understanding Price Fluctuations 15
    Competitive Advantage Costs 16
    Competitive Costs 17
    Competitive Costs: Not Wage Costs 17
    Benefiting from Flawed Valuation Approaches 19
    Exploiting Flawed Management Thinking 20
    Hard vs. Soft Intangibles 20
    Different Resource Types 21
    Explaining resource levels 22
    The Understood Importance of Intangibles 23
    Robust Intangible Valuation Systems 23
    Brand as an intangible 24
    Robust Intangible Management Systems 26
    15 Key-Issues Ignored 26
    17 Problematic Valuation Issues 27
    Issue #1: Strategy Based (intMgtOS®6001.I05) 27
    Issue #2: Incorrect formation (intMgtOS®6001.I1)28
    Issue #3: Comparability (intMgtOS®6001.I2) 28
    Issue #4: Underlying Component Changes (intMgtOS®6001.I3) 28
    Issue #5: Strategy Linked (intMgtOS®6001.I4) 29
    Issue #6: Limited Scope (intMgtOS®6001.I5) 29
    Issue #7: Ownership Based (intMgtOS®6001.I6) 29
    Issue #8: Wage Costs as a Proxy (intMgtOS®6001.I7 29
    Issue #9: Productivity not linked to Brand (intMgtOS®6001.I8) 30
    Issue #10: Expense Productivity Ignored (intMgtOS®6001.I9) 30
    Issue #11: Revenue Potential Ignored (intMgtOS®6001.I10) 30
    Issue #12: Employee Motivation Ignored (intMgtOS®6001.I11) 31
    Issue #13: Daily Brand Value (intMgtOS®6001.I12) 32
    Issue #14: Competitive Advantage Ignored (intMgtOS®6001.I13) 34
    Issue #15: Daily Competitive Advantage Valuation (intMgtOS®6001.I14) 35
    Issue #16: Confusion Regarding the Term Intangible (intMgtOS®6001.I15) 35
    Issue #17: Linking Intangibles to Financial Performance (intMgtOS®6001.I16) 36
    18 New Valuation Laws 37
    Intangible Laws 40
    Financial Performance and Intangibles 42
    Profit and Intangible Asset Capitalization 42
    Intangible Economics and Profit. 43
    Intangible Demand and Conventional Demand 44
    Conventional (Tangible) Demand Framework 45
    Conventional (Tangible) Demand Framework after Soft Intangibles 46
    Expenses and Intangible Demand 46
    Tangible Demand after a Reduction in Cost Quality 47
    The Intangible Financial Statement Profit Equation 47
    Intangible Financial Statements 49
    The Intangible Classification System 49
    Intangible Assets 49
    Intangible Liabilities 50
    Intangible Capital 50
    Intangible Revenue 50
    Intangible Expenses 50
    Intangible Profit 51
    Intangible Loss 51
    Intangible Financial Statements 51
    Conclusion and Summary 52
    CHAPTER 3: FOUNDATIONS OF INTANGIBLE FINANCIAL STATEMENTS 53
    Level 1 Time Analysis 53
    Level 2 Time Analysis 54
    Level 3 Time Analysis 55
    Nanotime Manufacturing 56
    An Example 57
    Nanotime Value Transactions 58
    Pre-contractual performance 59
    Contractual performance 60
    Post-Contractual performance 62
    Nanotime and Value 65
    CHAPTER 4: BENCHMARKING INTANGIBLE PERFORMANCE 66
    Intangible Finance Statements 66
    Proposition 1 66
    Optimal Employment Levels 67
    Determining OEL 68
    Changing Staffing Levels 68
    Linking Revenue and Employees 68
    Intangible Finance & Intangible Assets 68
    Intangible Transactions 70
    Intangible Asset Quality 71
    True Productivity 72
    Quality Management Issues 73
    Proposition 2: Intangible value – leading sentiment indicator 73
    Proposition 3: Expenses only destroys value 75
    Intangible Financial Statements 75
    CHAPTER 5: 21ST CENTURY FUNDAMENTAL ANALYSIS 78
    The Accounting Crisis 78
    The Role of Intangible Standards (intMgtOS®) 78
    Accounting Problems 81
    Why Accounting Problems Exist 83
    Solving Fundamental Problems 84
    Accounting or Intangible Management? 86
    Applying Intangible Standards (intMgtOS®) 87
    Intangible Finance Asset Classes 89
    Knowledge Asset Classifications 89
    Relationship Asset Classifications 90
    Organizational Asset Classifications 91
    Four Approaches to Intangible Valuation 91
    True & Fair Value Certification 92
    Case Study: Microsoft (Nasdaq: MSFT) 93
    Step 1: intMgtOS® Physical Availability Report 93
    Step 2: intMgtOS® Daily Time Report 96
    Step 3: intMgtOS® Real Revenue Report 97
    Step 4: intMgtOS® Apportionment Statement 100
    Artificial Employment 102
    Apportionment Statement: intMgtOS®5001.iR4 105
    Interpreting intMgtOS®5001.iR4 108
    Step 5: intMgtOS® Intangible Balance Sheet 108
    Step 6: intMgtOS® Nanotime Productivity 112
    Determining Nanotime Productivity 112
    Step 7: intMgtOS® Income Statement 115
    Interpreting the Intangible Income Statement 119
    Gross iRevenue Efficiency 119
    Intangible Expense Analysis 119
    Organizational Inefficiencies 120
    Knowledge Inefficiencies 120
    Relationship Inefficiencies 120
    Structural Inefficiencies 120
    A Note on the Size of Potential Productivity Savings 121
    Productivity Potential 121
    Attainable Productivity 122
    Sustainable Competitive Advantage Levels 122
    Social Capital Effectiveness 123
    Human Capital Effectiveness 124
    Natural Revenue Growth Rates 124
    Step 8: intMgtOS® Sustainability Statement (intMgtOS®5003.iR8) 125
    Step 9: intMgtOS® Artificial Employment Statement (intMgtOS®5003.iR9) 126
    Step 10: intMgtOS® ROI Statement (intMgtOS®5003.iR10) 126
    Step 11: intMgtOS® Daily Value Statement (intMgtOS®5003.iR11) 127
    Step 12: intMgtOS® Market Value Statement (intMgtOS®5003.iR12) 129
    CHAPTER 6: INTMGTOS® AND OTHER STANDARDS 131
    intMgtOS® Standards 131
    Intangible Standards 132
    ISO® Standards 133
    ISO9000 (QMS) and ISO14000 (EMS) 134
    ISO9000 134
    ISO Certification 135
    Conformity Assessment 135
    ISO Registration 136
    ISO Accreditation 136
    Comparing ISO® and intMgtOS® 136
    ISO® Costs 137
    intMgtOS® Enterprise Certification 137
    intMgtOS® Strategic Productivity 138
    intMgtOS® Competitive Advantage 138
    intMgtOS® Certification 139
    intMgtOS® Membership 142
    intMgtOS® Professional Membership 142
    intMgtOS® Corporate Membership 143
    intMgtOS® Client Membership 144
    ANSI® Standards 145
    ANSI® Costs 146
    ANSI® Benefits 146
    CHAPTER 7: UPGRADING TECHNICAL ANALYSIS 148
    Value Types 148
    Positive Intangible Value 149
    Negative Intangible Value 151
    Returns & Risk 154
    CHAPTER 8: INTANGIBLE ANALYSIS OF SECTORS AND INDUSTRIES 156
    SECTOR ANALYSIS 156
    Analyzing Large Caps 158
    Highest Absolute Return 159
    Highest Relative Return 159
    Lowest Relative Return 159
    Analyzing Medium Caps 160
    Highest Relative Return 161
    Lowest Relative Return 161
    Comparison with Strongest Large Cap Results 161
    Comparison with Weakest Large Cap Results 162
    Analyzing Small Caps 162
    Highest Relative Return 163
    Lowest Relative Return 163
    Comparison with Strongest Large Cap Results 163
    Comparison with Weakest Large Cap Results 164
    Analyzing Micro Caps 165
    Strongest Relative Returns 166
    Weakest Relative Returns 166
    Intangible Analysis of the Market 166
    The Role of -IV 166
    The Role of +IV 167
    +IV and –IV For Large Caps 167
    intMgtOS® Value Factors 168
    By Sector: ±IV for Large Caps 168
    By Industry: ±IV% for Large Caps 170
    Large Cap Industry Returns 170
    Top 10 returns for value creating large cap firms (+IV) 170
    Bottom 10 returns for value creating large cap firms (+IV) 171
    Top 10 returns for value destroying large cap firms (-IV) 171
    Bottom 10 returns for value destroying large cap firms (-IV) 172
    Explaining the total industry table: 172
    By Industry: ±IV% for Medium Caps 179
    Top 10 Medium Cap +IV performance 180
    Bottom 10 Medium Cap performance 180
    Top 10 Medium Cap -IV performance 181
    Bottom 10 Medium Cap -IV performance 181
    By Industry: ±IV% for Small Caps 187
    Top 10 Small Cap +IV performance 188
    Bottom 10 Small Cap performance 189
    Top 10 Small Cap -IV performance 189
    Bottom 10 Small Cap -IV performance 190
    By Industry: ±IV% for Micro Caps 195
    Top 10 Micro Cap +IV performance 196
    Bottom 10 Micro Cap performance 196
    Top 10 Micro Cap -IV performance 197
    Bottom 10 Micro Cap -IV performance 198
    Conclusion 203
    CHAPTER 9: THE INTMGTOS® ECONOMY STATEMENT 205
    What the Statement Measures 205
    intMgtOS®6001.D110: Gross Time Capital (GTC) 205
    intMgtOS®6001.D120: Rev:MV Gearing 206
    intMgtOS®6001.D130: BV:MV Gearing 208
    intMgtOS®6001.D140 – MV:Emp 210
    intMgtOS®6001.D160 – opInc% 211
    intMgtOS®6001.D170 – IAT% 211
    Standfield Factor 212
    intMgtOS®6001.D180 – SSP 212
    intMgtOS®6001.D185 – SBV/S 213
    intMgtOS®6001.D190 – SIV/S 213
    intMgtOS®6001.D190 – Standfield factor 214
    CHAPTER 10: THE INTMGTOS® STANDFIELD STATEMENT 215
    The IntMgtOS® Standfield Statement Analysis 218
    Stage 1 Analysis 218
    Stage 2 Analysis 219
    Stage 3 Analysis 219
    Stage 4 Analysis 219
    Stage 5 Analysis 219
    Standfield Exchange Analysis 220
    NASDAQ Analysis 220
    AMEX Analysis 223
    OTC Analysis 226
    NYSE Analysis 229
    Conclusion 232
    CHAPTER 11: THE INTMGTOS® SMART MONEY STATEMENT 234
    Why Smart Money? 234
    Specific Exchange Smart Money Statements 235
    NASDAQ Analysis 240
    AMEX Analysis 244
    Conclusions 246
    CHAPTER 12: PATTERN RETURN ANALYSIS 247
    L1 Pattern Based Analysis 247
    Capital Creation (CC) Analysis 247
    Negative Share Price Movements 248
    Positive Share Price Movements 248
    Large Cap Analysis 249
    Large Cap +IV Pattern Return Analysis 250
    Measuring Absolute Returns 253
    By Sector 256
    Conclusions for +IV Large Caps 258
    Large Cap -IV Pattern Return Analysis 259
    Relative Pattern Return (±IV) Analysis 259
    Average Return on Investment (±IV) Analysis 260
    Relative Return on Sector Investment (±IV) Analysis 261
    Absolute Return on Sector Investment (±IV) Analysis 262
    Conclusions 262
    Medium Cap Analysis 263
    Relative Pattern Return (±IV) Analysis 263
    Average Return on Investment (±IV) Analysis 264
    Relative Return on Sector Investment (±IV) Analysis 266
    Absolute Return on Sector Investment (±IV) Analysis 267
    Conclusions 268
    Small Cap Analysis 268
    +IV & –IV Ratios 269
    +IV Firm % 269
    -IV Firm % 269
    NA Firm % 269
    +IV to –IV Ratio 269
    +IV to NA Ratio 270
    Sector Return on Investment Analysis 270
    Return by Sector Analysis 272
    Wealth Creating (+IV) Small Caps 272
    Wealth Destroying (-IV) Small Caps 273
    Micro Cap Analysis 274
    +IV & –IV Ratios 274
    +IV Firm % 275
    -IV Firm % 275
    NA Firm % 275
    +IV to –IV Ratio 275
    +IV to NA Ratio 275
    Sector Return on Investment Analysis 276
    Return by Sector Analysis 277
    Wealth Creating (+IV) Micro Caps 278
    Wealth Destroying (-IV) Micro Caps 278
    Summary 279
    +IV Summary 280
    -IV Summary 282
    Cross Sectional IV Analysis 285
    IV Market Composition Indicators 285
    +IV Firm % 286
    -IV Firm % 286
    NA Firm % 286
    IV Relative Performance Indicators 286
    +IV to –IV Ratio 287
    +IV to NA Ratio 287
    -IV to NA Ratio 287
    IV Return Composition Indicators 288
    +IV to -IV Invest Ratio 288
    +IV to -IV Return Ratio 289
    Return Velocity 289
    +IV to -IV Profit Ratio 290
    CHAPTER 13: CONCLUSION 291

Product details

  • No. of pages: 384
  • Language: English
  • Copyright: © Academic Press 2005
  • Published: June 7, 2005
  • Imprint: Academic Press
  • eBook ISBN: 9780080478548

About the Author

Ken Standfield

Affiliations and Expertise

The International Intangible Management Standards Institute, Australia

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