The collective worth of the top 100 most valuable brands globally in 2024 surpasses a staggering $5 trillion.
Despite their significant impact on shareholder value, evaluating the precise value of a brand remains a challenge.
Many financial regulators refrain from acknowledging brand assets on balance sheets, despite their potential to yield dividends for decades.
For instance, Apple’s financial reporting overlooks one of its most valuable assets—a brand worth $516.6 billion.
This visualization ranks the top brands by brand value, relying on Brand Finance’s annual global ranking.
How Brand Value is Determined:
Brand value is primarily assessed by its contribution to company profits. Brand Finance conducts a comprehensive analysis of individual companies and their subsidiaries, considering factors such as brand investment, equity, and performance.
Ranking the Top Brands:
1. Apple
Apple’s brand value has surged by over $217 billion since the previous year, securing its top position.
Despite plateauing iPhone sales, Apple’s expansion into wearables and Apple TV has bolstered its brand value.
Over 50% of surveyed individuals by Brand Finance affirmed the worth of Apple products, despite their premium price tag.
2. Tesla
Tesla’s brand value has declined to $58.3 billion, leading to its exit from the top 10.
The decline coincides with the rise of new, more affordable electric vehicle (EV) manufacturers, notably BYD.
BYD emerged as the world’s leading EV company in 2023, with over a third of new cars sold in China being EVs.
Understanding the evolving dynamics of brand value is crucial in assessing the market standing and potential growth of companies. Despite fluctuations in brand values, brands remain integral assets that significantly influence consumer perceptions and market competitiveness.
Brand Value Calculation Methodology
Source: Brand Finance Global 500 Report
Important note: The values shown above are brand value calculations as opposed to market capitalization.
Overview:
Brand value calculation involves a systematic formula that accounts for various factors contributing to a brand’s worth. Here’s a breakdown of the methodology:
- Brand Strength Index (BSI):
Brand Strength Index evaluates brand investment, brand equity, and brand performance. It quantifies the overall strength of a brand in the market.
- Brand Royalty Rate:
The brand royalty rate is determined based on the sector in which the brand operates. This rate reflects the level of royalty or licensing fees a brand can command.
- Brand Revenues:
Forecasted brand-specific revenues are estimated based on the proportion of parent company revenues attributable to the brand in question. This factor considers the brand’s contribution to the overall revenue generation of its parent company.
- Brand Value Calculation:
Brand value is calculated by multiplying the Brand Strength Index (BSI) by the Brand Royalty Rate and Brand Revenues. This comprehensive formula integrates multiple aspects of a brand’s performance and market position to derive its total value.
- Discounted to Net Present Value:
The final brand value is discounted to its net present value to account for the time value of money. This adjustment reflects the idea that future cash flows attributed to the brand are worth less in present terms.
Understanding the intricacies of brand value calculation provides valuable insights into the financial standing and market influence of prominent brands across various industries.
For further details and insights, refer to the Brand Finance Global 500 Report.
