The Role of a Business Valuation Analyst

Posted by Johnson Valuation on January 22nd, 2020

A business valuation analyst is responsible for the coordination of a valuation project which has completed the primary communication. The valuation firm will ask for a limited amount of qualitative and financial information. 

Normally, the valuation business will provide a non-disclosure agreement to maintain strict privacy at different stages of the engagement. Recognizing the interest to get valued, the benefits and rights related with interest, the time of value as well as the objective of valuation are the key facts for a business valuation analyst to endorse so that the analyst might properly determine the possibility of a project and offer a proposal.

Engagement Phase

When the valuation company and the business reach the basic agreement to the scope as well as associated fee arrangements, the valuation company prepares the engagement letter which includes the main elements of a valuation engagement. The elements consist of but not limited to the party’s name who will involve the business valuation analyst, the interest of being appraised, the applicable value standard, suggested valuation methodology, type of report to get produced and fees with timing consideration. 

Significantly, the appointment letter will commonly consist of the information request having both financial as well as non-financial data. From the practical viewpoint, the receipt for both the data and the early retainer given in the appointment letter is the main event while substantive work usually starts with the valuation project.

Valuation and Analysis Phase

When the valuation company receives and analyzes the information, it will usually organize a due industry meeting with the administration so that the business valuation analyst can get a detailed understanding of the company getting valued. The majority of the topics discussed during this meeting consist of a review of the company’s history, industry, governance, financial position, business operations, and prospects. The management’s interview is an important step in the valuation procedure because management’s thoughts on the indicated topics above are measured when the business valuation analyst takes judgments about some required key factors to make an opinion.

Originally published at: https://www.cgmimm.com/articles/the-role-of-a-business-valuation-analyst