Intangible assets ratio
factor.formula
Intangible assets ratio IIAR:
in:
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It is the total amount of intangible assets created by the enterprise at the end of period t, including the capitalized portion of R&D expenditure, internally generated intangible assets such as patents, trademarks, copyrights, etc. (the specific calculation method needs to refer to the definition of the corresponding subdivision factors, which usually involves accounting policies such as R&D expenditure treatment).
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It is the total assets of the enterprise at the end of period t, obtained based on the total assets item in the enterprise's balance sheet.
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The goodwill of the enterprise at the end of period t is a purchased intangible asset, usually generated by corporate mergers and acquisitions. In this formula, goodwill is subtracted from the denominator to more accurately measure the proportion of intangible assets generated by the enterprise's endogenous growth and avoid the interference of purchased intangible assets on the indicator.
factor.explanation
The intangible asset ratio (IIAR) is an indicator that measures the proportion of a company's intangible assets relative to total assets, and is intended to reflect the company's long-term competitive advantage and future growth potential. A higher IIAR is generally associated with higher stock returns, which may be due to the market's underestimation of the value of intangible assets, especially in industries with rapid technological iterations. In addition, this factor also has the ability to predict a company's future gross profit margin growth, indicating that companies with a high intangible asset ratio may have higher profitability in the future. Investors can identify undervalued high-quality growth stocks by analyzing this indicator and build corresponding quantitative trading strategies. This factor is not only applicable to cross-industry comparisons, but also to comparative analysis of different companies in the same industry, but the characteristics of intangible assets in different industries need to be considered when making cross-industry comparisons.