If you own a business, want to protect your wealth, or determine how much an asset is worth, you will at some point need professional business valuation services.
Some of the reasons to have a business valuation are:
- An opportunity arises to sell or merge the business.
- Faced with transitioning the business to family members or other partners.
- Looking to expand the business and need to secure capital.
- Taking on new partners and need to determine buy-in price.
- Reaching retirement and considering an exit strategy.
- Business partners or shareholders are exiting, requiring the business to be divided or dissolved.
- Embroiled in financial litigation.
- Owners want to focus energies to grow company value.
- Assist with selling or purchasing a business
- Obtain financing from a lender for the purchase of a business
- Plan for a merger or acquisition
- Develop an estate or tax plan to protect your wealth
- Create a succession plan
- Determine the value of assets and liabilities for a divorce settlement
- Assist attorneys in litigation (shareholder dissent and/or oppression)
Whatever its purpose, business valuation is a widely used discipline that can play a key role in helping you achieve your financial goals. Business valuation professionals can give you the answer. Business valuation is a complex process requiring broad knowledge of accounting, finance, economics and business, expert application of recognized valuation methodologies, and diligent adherence to professional standards.
Accurate Value Determination
- The result of an inaccurate value determination, regardless of whether it is high or low, generally leads to undesirable consequences. For instance, if the value is too high, estate taxes will be too high; savvy investors or prospective buyers will usually disregard a value that appears too high. If the value is too low, you can be sure savvy investors or prospective buyers will recognize it and take advantage. Likewise, if you are on the other side of the dispute in a dissenting shareholder action or divorce, you certainly want to know you are receiving an accurate value for your interest.
- Determining the true value of a business enterprise requires a careful analysis of two primary components that make up value: tangible assets such as real estate, machinery, and furniture used by the business; and various intangible assets such as business or personal goodwill. Intangible assets might also include customer lists, trademarks, copyrights, distribution rights, a superior management team, non-compete agreements, physical location, special processes, and name recognition.
Understanding the Business
- To properly value a business enterprise, the analyst must acquire a thorough understanding of every aspect of a company’s dynamics, including: management capabilities, company strengths, weaknesses and vulnerabilities, the competitive environment, overall expectations for the marketplace, and future economic prospects for the industry and the economy in the region and as a whole. All of these elements affect the risk of ownership in a particular enterprise, and risk directly impacts value. Additionally, the valuator must analyze the inherent financial health of the enterprise and its future profit potential.
Sorting Through a Complex Process
- After a thorough analysis of all the company’s dynamics and its financial health, the analyst must select the most appropriate methodology from among the many accepted by the valuation industry, and apply a series of calculations and formulas to arrive at the ultimate conclusion of value. Overall, the process is highly complex and requires a significant amount of time. Indeed, this is what is required to determine the true economic value of a privately owned business enterprise, and this is what a ABV and CVA brings to your table.
ABV: Your Best Choice for Business Valuation Services
The advantages of a CPA who has earned the Accredited in Business Valuation (ABV) Credential include:
- A rigorous certification process developed by the AICPA
- Proven competence in the complexities of business valuation
- Advanced CPA training and broad knowledge of accounting, finance, economics and general business principles
- Skill in selecting the most appropriate valuation methodology
The ABV Credential is the mark of excellence in business valuation. It identifies those valuation professionals who have the ability to provide sound and reliable business valuation services. Please call Flowers Rieger & Associates, PLLC, located in Tucson Arizona (520) 327-8706 to discuss your business valuation needs; we would be pleased to discuss how our expert valuation services can be of assistance to you.
Certified Valuation Analyst (CVA)—Credibility Matters
NACVA’s globally recognized Certified Valuation Analyst (CVA) designation is the most widely recognized business valuation credential and the only business valuation credential accredited by the National Commission for Certifying Agencies® (NCCA®) and the American National Standards Institute (ANSI).
The CVA designation is an indication to the business, professional, and legal communities that recipients have met the rigorous standards of professionalism, expertise, objectivity, and integrity in the field of business valuation, financial consulting and litigation, and related consulting disciplines. This CVA designation, established by the National Association of Certified Valuators and Analysts (NACVA), is the only valuation credential accredited by the National Commission for Certifying Agencies (NCCA), the accreditation body of the Institute for Credentialing Excellence