[Mike]

In any acquisition one of the main values of a company you want to purchase may be their reputation in the market.

While this is very important, I do not think it’s easily quantifiable and was wondering if anyone has seen any metrics/value calculations that would seem to quantify the value of a reputation.

[Marshall Filiault]

The valuation of reputation is something that I understand as the premium the buyer is willing to pay. Reputation is an intangible asset to a business that is often not recorded on the balance sheet (aside from Goodwill which occurs through the process of acquisitions). As such, reputation can only be valued as what a buyer is willing to pay and what the seller is willing to accept which is all subjective. Any premium that is paid in excess of a company’s listed assets or share price would be accounted on the books as goodwill, and so reputation can be reliably quantified/calculated after the acquisition.

[Leah Roderick]

Great question, and something my company encounters quite frequently. I’ve found that sellers often tend to overestimate the value of their reputation. I would be very interested to know if anyone has developed some sort of formula for this.

[Nguyen Thi Tu Oanh]

In my opinion, it depends on industries, reputation may play vital role in banking, education, services….but in the others like foods, raw materals, etc, it seems less important. therefore, methods to value reputation also is also different in each industry

[Author]

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