KPMG’s Global Valuation Institute (GVI) is pleased to introduce its third management paper, Companies with market value below book value are more common in Europe than in the US: evidence, explanations and implications.
This paper, authored by Mauro Bini and Stephen Penman, compares the book values and market capitalizations of US and European companies in the S&P 500 and the STOXX 600 respectively. It documents a greater proportion of companies with book values that exceed their market capitalization in Europe rather than in the US. The European companies in the study report under International Financial Reporting Standards (IFRS) while the US companies in the study report under US Generally Accepted Accounting Principles (US GAAP).
This paper explores the relationship between profitability and royalty rates across industries.