Knowledge Capital Assessment
Knowledge vs. Financial Capital
Comparing the value of Knowledge Capital with the "book value" of Financial Capital defines the relative importance of a firm's information assets. The ratio of Knowledge Capital to Financial Capital for a group of look-alike firms is a telling indicator of the potential future gains in the market valuation of the firm. A high Knowledge Capital / Financial Capital ratio qualifies a firm as a knowledge-intensive enterprise.
"Comprehensive Value" of a firm is the sum of its Financial Capital plus Knowledge Capital. It offers a benchmark comparison against market valuations. Comparisons provide an indication of fair market value and the premium shareholders are ready to pay for information productivity.
Knowledge Assets Yield Financial Leverage
The financial leverage a firm obtains from its assets is a critical key indicator of performance and the basis for making investment decisions.
Creation of Knowledge Capital
Knowledge Capital is created when information management costs generate effects that are longer-lasting than an annual operating expenses. A comparison of cumulative Sales, General and Administrative Costs, plus R&D expense with gains in Knowledge Capital provide an index of Knowledge Capital Accumulating efficiency.
The value of Knowledge Capital per Employee may give support to the frequent assertion that "employees are our most important asset." It is desirable that the Knowledge Capital per Employee is a large multiple of average employee salaries and wages.Download KC data input form to complete assessment.
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