Financial Valuation Workbook: Step-by-Step Exercises

FVW is targeted to the following professionals and groups that are typically exposed to financial valuation issues:

• Appraisers
• Appraisal associations and societies
• Actuaries
• Attorneys
• Bankers
• Business brokers
• Business executives, including CEOs, CFOs, and tax directors
• Business owners
• CPAs
• Estate and gift planners
• Financial analysts
• Government agencies including the IRS, SEC, and DOL
• Insurance agents
• Investment advisors
• Investment bankers
• Judges
• Pension administrators
• Stockbrokers

FVW contains eight chapters, each with a different purpose.

Chapter 1 contains more than 80 exercises that have been placed throughout excerpts of an actual business valuation report presenting numerous valuation topics, including rates of return, the capitalized cash flow method of the income approach, and the guideline company transaction and guideline public company methods of the market approach.

Chapter 2 contains comprehensive answers to the exercises in Chapter 1.

Chapter 3 includes more than 300 exercises that comprise a companion piece and correlate to the relevant chapters of Financial Valuation Applications and Models, 4th edition. These exercises/tests can be used to prepare for business valuation certification exams or for university professors in the academic field or as reinforcement to learn the material.

Chapter 4 includes more than 450 ValTips that are extracted from the companion book, FVAM. This summary of ValTips can serve professionals as a quick reference source of important concepts, application issues, and pitfalls to avoid.

Chapter 5 presents a Valuation Process Flowchart to allow professionals to follow a more structured process in applying and documenting the income approach.

Chapter 6 highlights strategies for marketing, managing, and making money in a valuation services practice. It discusses risk management in regard to reports and engagement letters, and gives examples of each. This chapter also includes information on how to keep up technically; find, train, and retain staff; and delegate authority.

Chapter 7 includes guidelines for practice management workflow procedures, which starts with the initial prospective client call, highlights checking points through the valuation analysis, then moves on to draft and final record, then to file retention and engagement closure.

Chapter 8 includes more than 40 checklists that can be used by professionals in documenting their valuations. It can also be used by less-experienced professionals as a guide in applying valuation concepts.

This book also includes a companion website, which can be found at www.wiley .com/go/fvamwb4e. The website includes the exhibits and forms found in Chapter 7, and the checklists found in Chapter 8.

Financial valuations are very much affected by specific facts and circumstances. As such, the views expressed in these written materials do not necessarily reflect the professional opinions or positions that the authors would take in every business valuation assignment, or in providing business valuation services in connection with an actual litigation matter. Every situation is unique and differing facts and circumstances may result in variations of the applied methodologies. Furthermore, valuation theory, applications, and methods are continually evolving and, at a later date, may be different from what is presented here.

Nothing contained in these written materials shall be construed to constitute the rendering of valuation advice; the rendering of a valuation opinion; the rendering of an opinion as to the propriety of taking a particular valuation position; or the rendering of any other professional opinion or service.

Business valuation services are necessarily fact-sensitive, particularly in a litigation context. Therefore, the authors urge readers to apply their expertise to particular valuation fact patterns that they encounter, or to seek competent professional assistance as warranted in the circumstances.

Disclaimer Excluding Any Warranties: This book is designed to provide guidance to analysts, auditors, management, and other professionals, but is not to be used as a substitute for professional judgment. Procedures must be altered to fit each assignment. The reader takes sole responsibility for implementation of material from this book. The implied warranties of merchantability and fitness of purpose and all other warranties, whether expressed or implied, are excluded from this transaction, and shall not apply to this book. None of the authors, editors, reviewers, or publisher shall be liable for any indirect, special, or consequential damages.