A valuation analyst is a person who determines the value of a company. The valuation process takes into account both tangible and intangible assets, such as equipment and real estate, as well as reputation, location, and client list. When a valuation analyst is certified, it means that he or she has met the requirements set forth by a government agency to practice as an official certified valuation analyst. A bachelor’s degree in accounting, completion of valuation courses, and a passing score on a proficiency exam are usually required. A certified valuation analyst usually works for a firm that specializes in business appraisals and advises business owners who want to know how much their company is worth.
A certified valuation analyst is frequently a Certified Public Accountant (CPA). This is a trained and certified accounting professional who gathers and organizes financial documents for use in business planning and auditing. Financial advisers, commercial real estate brokers, and any other type of professional who is trained to assess the value of a business are examples of analysts.
One of the first tasks for a valuation analyst is to determine the value of a company based on tangible assets like equipment, as well as actual cash flow and profitability. This part of the valuation process can be simple and only requires a basic understanding of accounting principles. A certified valuation analyst, on the other hand, understands that a company’s worth should go beyond its tangible assets.
A variety of other factors have an impact on a company’s value. If a company has been around for a long time and has established a positive reputation among customers, its name and logo are considered valuable assets. Management and business processes can be considered valuable as well. These systems are also considered assets when a company has developed an effective management process or workflow.
When valuing intangible assets, a certified valuation analyst is typically expected to provide justifications for the value assigned. Charts and statistics are frequently used to support reasoning and can be used to prove the value of intangible assets. When a business owner is considering selling or merging his or her company, these explanations are especially important. A potential buyer may reject an offer if he or she believes that a business has been overvalued based on appraisal explanations.
A certified valuation analyst’s understanding of a market is crucial. Aside from a company’s assets, an analyst must also be aware of the economic environment in which it operates. High levels of competition or decreased demand can reduce an organization’s value.