A certified valuation analyst determines a business’s worth, considering tangible and intangible assets. Qualifications include an accounting degree, assessment courses, and a proficiency exam. They must also understand the market and economic climate.
A valuation analyst is a professional who determines how much a business is worth. The valuation process includes consideration of tangible assets such as equipment and real estate, as well as intangibles such as reputation, location and customer list. When a valuation analyst is certified, it means that he has achieved the qualifications determined by a government agency that allows him to serve as an official certified valuation analyst. Qualifications typically include an academic degree in accounting, completion of assessment courses and satisfactory scores on a proficiency exam. A certified valuation analyst typically works for a company that specializes in business valuations and consults with business owners who are interested in learning the true value of their business.
In many cases, a certified valuation analyst is also a certified public accountant (CPA). Is a trained and certified accounting professional to gather and organize financial documents that can be used for business planning and auditing. Analysts can also be financial advisors, commercial real estate agents, or any other type of professional trained to analyze the value of a business.
One of the first things a valuation analyst will do is determine the value of a business based on tangibles such as equipment, actual cash flow and profitability. This part of the valuation process can be straightforward and require knowledge of basic accounting principles. A certified valuation analyst, however, understands that the value of a business must be greater than just the value of the tangibles.
Several other factors affect the value of a business. If a company has been around for many years, for example, and its name has developed a good reputation among customers, its name and logo are considered valuable assets. It can also be said that management and business processes have value. When a company develops an effective workflow or management process, these systems are also considered assets.
When valuing intangible assets, a certified valuation analyst is typically expected to provide reasons why he assigned a specific value. The reasoning is usually supported by graphs and statistics that can help prove the value of intangible assets. These explanations are particularly important when a business owner is considering selling or merging his business. If a potential buyer believes a business has been highly valued based on valuation explanations, they may decline an offer.
Understanding a market can be important for a certified valuation analyst. In addition to a company’s assets, the analyst must also understand the economic climate in which a company is operating. High levels of competition or reduced levels of demand can decrease an organization’s value.
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