Another disadvantage of this ratio is that the market value based on market price, which may not always reflect the intrinsic value of the company. Very often, the market value is divergent from the fundamental value determined using the DOC valuation model. In some instances (particularly in times of crisis) may be the result of emotions emerging in the stock market. Book value used in the construction of ratio is also not without drawbacks. The book value is determined as of the date of balance sheet and is based on historical cost, which may differ from the present value of the assets.
Thus, some authors assume that the existing differences between market value and the book value of equity does not evaluate ‘C, but merely confirms its existence in the company. However, due to data availability, and ease of calculation this ratio is often used in research on ICC. An example of research on intellectual capital using the ratio NV/BE is research of Diapason Gosh and Anne Www 5], who studied the effect of information on the level of intellectual capital on the Value added of intellectual coefficient (VOICE) measure the value added generated by the company.
Model determines the extent to which resources of physical capital and intangible impacts on the achievement of that value. The author of this method is A. Pulpit [6]. VIC ratio is the sum of three parameters: CUE (Capital Employed Efficiency), HCI (Human Capital Efficiency) and SEE (Structural Capital Efficiency). Thus, the value added of intellectual coefficient can be written as follows: VOICE -CUE + HCI + SEE (6) The larger the value of the VIC ratio of a bank, the better the efficiency of all its resources and greater its value added.
A characteristic feature of this method is to estimate the degree of utilization of ICC through the use of traditional data from the company’s balance sheet. The VOICE ratio is determined at five steps: Step 1: Estimate total value added VA (Value Added). The basis for the calculation were taken bank’s profit and loss account, where VA is given by the formula: VA = NONFAT + Earn +HCI (7) VA – value-added of bank, NONFAT – net operate profit after tax, Am – depreciation and amortization, HCI – total expenditure on employees (wages and salaries).
One of the more important assumptions in the calculation of the value added of the company is treating the sum of the expenditures on the company’s employees in terms of investment and not cost. ; Step 2: Calculate the capital employed efficiency ratio (CUE). It is given by the formula: (8) Increase of this ratio suggests that bank is using employed capital more efficient in the creation of its market value. ; Step 3: Determination of the human capital efficiency ratio (HCI). According to A. Pulpit human capital corresponds to the general expenses of employees, such as alerts, wages, training, awards, etc..
This indicator is therefore calculated as the ratio of total value added, and employment costs: HCI VA HCI = CE CUE = 5 The increase in this ratio reflects improvement of banks employee productivity, which in turn is transformed into an increase in value throughout the organization. ; Step 4: Determine the size of the structural capital (SC) of the firm. This ratio is calculated by subtracting from the total value-added of the company, value of its human capital HCI: SC = VA – HCI (10) In business practice, there was observed an inverse relationship between the size of he human capital and the size of the structural capital (SC).
