Profitability, Intangible Value Creation, and Scalability Patterns

Roberto Moro-Visconti ()
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Roberto Moro-Visconti: Catholic University of the Sacred Heart

Chapter Chapter 3 in Startup Valuation, 2024, pp 81-130 from Springer

Abstract: Abstract This chapter undertakes a comprehensive investigation into the financial dynamics of startup profitability, intangible value creation, and scalability patterns within the entrepreneurial landscape. The study incorporates traditional financial metrics such as Return on Equity (ROE), Return on Invested Capital (ROIC), and Return on Sales (ROS) and explores how these ratios interact to assess a startup’s financial health. The analysis extends to Economic Value Added (EVA) and Market Value Added (MVA), emphasizing their role in capturing true economic profit. Additionally, the chapter examines the impact of intangible investments and digital scalability on EBITDA-driven market valuation. By integrating traditional financial metrics with modern digital and intangible asset strategies, the study provides a comprehensive framework for understanding and optimizing financial management in startups, offering practical insights for entrepreneurs and finance professionals.

Keywords: Digital platforms; ROE; ROI; ROS; Profitability; Income statement; SWOT analysis (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-77469-0_3

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DOI: 10.1007/978-3-031-77469-0_3

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