INTELLECTUAL CAPITAL AUDIT | Award Winning Investment Bank

INTELLECTUAL CAPITAL AUDIT TM

In the knowledge economy, no organization can survive long-term unless it is reinvesting in its Intellectual Capital base. Disruptive technologies – which have been proven to increase at a logarithmic rate – and increasingly advanced customers with ever higher expectations ensure that any company that sits still will be rendered obsolete

80% of the value of the S&P 500 is Intellectual Capital, yet few buyers or sellers of middle market companies attempt to measure and assess the Intellectual Capital that resides within the company in question. Yet these knowledge assets underpin the capabilities and core competencies of any organization. Research shows that the key components of Intellectual Capital are poorly understood, inadequately identified, inefficiently managed and inconsistently reported.(Chan, 2011).

Before you acquire a company, you must determine whether it has reinvested in its Intellectual Capital, or whether these assets have been harvested and depleted, or worse, never created. An organization’s ability to create shareholder value depends on its value-added processes, its intellectual resources, and the creativity of its workforce – its Intellectual Capital. Intellectual Capital consists of Human Capital such as staff skills, innovativeness and work experience; Structural Capital such as IT systems, documents and patents, and policies and procedures; and Relationship Capital such as the relationships with customers and suppliers.

An Intellectual Capital Audit is much more than learning about a company’s secret sauce. Its about learning how it was created to begin with, and if the company has continued to work to ensure it will maintain its competitive edge, or obsolete it with their own replacement. Traditional top down tools aim at identifying useful knowledge that can create wealth for the organization in assessing the performance and value creation process but do not explore deeply the particular business processes and the specific knowledge needs. In contrast, a bottom-up approach is a process-oriented and stock-taking approach for evaluating the “knowledge healthiness” of an organization.

We combine a top-down and bottom-up approach to provide a comprehensive profile of the company. This includes(i) measurement of the Intellectual Capital within the company,(ii) identification of how existing Intellectual Capital can be utilized to create shareholder value, and (iii) identifying opportunities to improve on the Intellectual Capital creation processes.

We specialize in the methodology and skills necessary to conduct an Intellectual Capital Audit that ensures that your target company is positioned for the next decade.

For more see:



Precursors to Shareholder Value Strategic Marketing          


 An Intellectual Capital Audit will indicate if IC has been renewed or depleted Continual harvesting requires that the roots be fed

– Intellectual Capital formation lies at the roots of shareholder value creation. Before you buy a company, you must know how fertile the soil is, or whether its nutrients have been depleted.

 Intellectual Capital Audit Outline of Enterprise Value

– In most lower middle market companies, the majority of Intellectual Capital consists of Relational Capital. Most of it is not sufficiently institutionalized. Human Capital and Structural Capital are often underdeveloped.