Title: Theory and practice of technological corporate assessment

Authors: Matthias H. Hartmann

Addresses: A.T. Kearney Management Consultants, Charlottenstrasse 57, D-10117 Berlin, Germany

Abstract: Conventional audits of a corporate assessment rely heavily on key accounting figures and finally on extrapolating data from a historically oriented analysis of balance sheets or on an estimate of future revenues (gross rental method) or cash flows (discounted cash flow procedure). What is lacking is a substantive statement of technological potential, which is central for assessing sustained turnover and profitability in the future. This gap can be filled through a technological assessment to complement conventional accounting. By taking both a technological and financial perspective, a two-dimensional technological and financial portfolio with the dimensions of technological and financial attractiveness can be developed, which enables key elements to be differentiated in a corporate assessment. A company|s technological attractiveness can be assessed by using a technology balance sheet that complements the trade balance sheet, which is used to illustrate and evaluate a company|s technological potential. The result is a future-oriented, highly aggregated overall overview of the technological situation. Just as the trade balance sheet, the technology balance sheet can also be understood as a system of logically related and structured key figures, which mathematically link asset and liability items. It is developed according to specific principles and likewise offers several ways to analyse balance sheets. The process of a technological company assessment is illustrated by using the example of a company in the smart card industry. Afterwards, the technological and financial assessments will be consolidated into an overall evaluation.

Keywords: balance sheet; core competence; ratio analysis; rating; smart card; technological assessment; technological inventory.

DOI: 10.1504/IJTM.1999.002730

International Journal of Technology Management, 1999 Vol.17 No.5, pp.504-521

Available online: 14 Dec 2003 *

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