Special Report

50 Most Valuable Brands in the World

Methodology

Brand Finance methodology uses the so-called Royalty Relief approach, a brand-valuation method that conforms to the International Organization for Standardization, or ISO. The seven-step process first calculates brand strength using marketing budgets, stakeholder equity, and business performance, and rates them on a Brand Strength Index (BSI) scale of 0 to 100. This is followed by determining a royalty range for each industry based on examining comparable brand licensing agreements. The royalty rate is then calculated by applying the BSI score to the royalty range. The share of the company’s revenue coming from the specific brand is also calculated. (For example, how much of Alphabet’s revenue comes from each of its two major brands, Google and YouTube.) The projected revenue growth for the parent company is applied to the royalty rate of the company’s brand or brands. The last calculation discounts the brand revenue (post-tax) to generate a brand’s value.