Financial Management Analysis of Knowledge Capital and Earnings of Select Companies in India

The industrial revolution has given way to an age of computers, information and global competitions. Decisions are made more quickly and superior knowledge of products, management techniques & styles, skills, markets, methods, systems, procedures, human resources, policies, quality of work life, cultures etc. intangibles that constitute the assets in the form of knowledge often determines who prevails as against the tangible assets. Despite higher significance and valuation of those companies than the tangible and financial assets they own little have been done by the researchers and accounting association in capturing those knowledge assets and earning attributable to it. The Chief Financial officers are also keeping close tabs on spending for those assets. This paper attempts to:Underline the significance of knowledge assets. Introduce with and evaluate various methods for capturing value of knowledge assets and earnings. Provide options for suitable methodology to estimate knowledge assets and earnings. Compare and analyze knowledge capital and earnings across various companies and industries. Introduce a range of new financial metrics based on knowledge capital and earnings. Aid the analyst and investors to view the financial statements of companies with fresh insights. Identifies causes of high or low knowledge capital and how does it behave across the life cycle of companies and industries.The various findings of the study are:Knowledge parameter correlates well with the market parameters than the traditional parameter. Old economy enterprise usually score low on knowledge parameters as compared to new economy enterprise. Knowledge based metrics aids comparison across various industry and companies and provides fresh insights to the CFO's, Analyst, and Investors etc in their decision-making