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> So by this theory the value of a tech startup is the developer's laptops and the value of a yoga studio is the loaner mats. Indeed, I'm wondering why the quo

> So by this theory the value of a tech startup is the developer's laptops and the value of a yoga studio is the loaner mats. Indeed, I'm wondering why the quoted ratio is so low (1.10). Much of a company's value is in its customer and supplier relationships and these aren't tangible assets that can be sold.

sologoub 11y ago
I believe the ratio tries to take into account all assets, tangible and intangible, but I have no idea how for example Facebooks user base/network effect would be recognized in GAAP accounting. Does anyone know?
- foobarqux 11y ago
  It's not.
- jacobr1 11y ago
  goodwill?
  - foobarqux 11y ago
    They didn't acquire the users through M&A.
repsilat 11y ago
> Indeed, I'm wondering why the quoted ratio is so low (1.10) Not just that -- from the article: >> To Smithers, the ratio’s doubling since 2009 to 1.10 Having "the economy" be "worth" only 55% of its scrap value seems crazy...
- djrogers 11y ago
  The 'doubling' is from 1.05 to 1.10 -it's a ratio, not a %age