Jeff Bezos once said, "Your brand is what other people say about you when you're not in the room." He should know. Amazon is one of the top brands in the world today by pretty much any measure.
Last month, Forbes published its "Most Valuable Brands List for 2020."
The list is not a popularity contest. In fact, there are several steps involved, all requiring an MBA or at the very least a BS in Advanced Calculus. Here's how Forbes describes its methodology:
"After looking at a universe of 200 global brands with a notable presence in the U.S., our first step in valuing the brands was to determine revenue and earnings before interest and taxes for each one. We then averaged earnings before interest and taxes (EBIT) over the past three years and subtracted from earnings a charge of 8% of the brand's capital employed, figuring a generic brand should be able to earn at least 8% on this capital. (Forbes applied the corporate tax rate in the parent company's home country to that net earnings figure.) Next, we allocated a percentage of those earnings to the brand based on the role brands play in each industry. To this net brand earnings number, we applied the average price-to-earnings multiple over the past three years to arrive at a final brand value. For privately held outfits we applied earnings multiples for comparable public companies."
Hello? Are you still there? (OMG.)