To be able to measure how valuable a brand is, Forbes did not look at customer surveys. Instead, it analyzed the financial numbers that each company releases, on the premise that the brands that are most valuable are the ones that are able to generate the best earnings in the industries where they operate. Tech brands take up 19 spots on the list, including the top three; four out of the top five; and 11 out of the top 25.
Forbes took the earnings of each company before taxes and interest for the previous three years, then averaged the figures. The result was then subtracted by 8 percent, representing capital employed. A maximum corporate tax rate in the home country of each parent company was applied to the resulting figure.
Afterwards, Forbes allocated a certain percentage of each company’s earnings to the brand, depending on the role that branding plays in each company’s respective industry. Companies in luxury goods and beverages have a higher percentage because branding is more important in those industries, while companies in fuel and air transportation have a lower percentage.
Lastly, the average price-to-earnings multiple for the previous three years was applied for each company’s brand earnings to come up with the final brand value.
Apple came out on top with a brand value of $124.2 billion, which is a 19 percent increase compared to its brand value last year and almost double that of Microsoft, which came in at second place with a brand value of $63 billion.
Microsoft’s brand value increased by 11 percent compared to last year, while Google’s brand value increased by 19 percent to $56.6 billion. Read More