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Chapter 8 - Who Are the Valuation Professionals?

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The following is an excerpt from The Executive's Guide to Business Valuation by valuation expert and M&A i-banker Justin Kuczmarski, MBA, CPA, CVA, CIRA, ABV. To view this free, 300-page guidebook, please click the blue link above to download.

Chapter 8 - Who Are the Valuators?

In screening for a valuator, a good first question justifys on service and industry expertise. A second question is whether or not the valuator has direct experience in M&A. Transactional exposure, whether as an investment banker or due diligence advisor, helps blend reports within the context of live deals. This statement is not proclaiming that a lack of M&A experience is an impediment in securities valuation. It is just hard to deny how real-world M&A experience enhances the art of financial valuation opinions. Accordingly, it does not hurt for the selected valuator to have exposure in observing value transform into an actual business sale. Only real M&A experience can provide this bridge between perceived value and price.

Though business valuation is often the epijustify of litigation support, additional expertise in other areas can be just as important. For example, knowledge of forensic accounting, debt /derivatives valuation and advanced corporate finance distinguishes a serious financial expert from a walking time bomb. The largest CPA valuation organization, the National Association of Certified Valuation Analysts (NACVA), estimates that 50% or more of litigation and valuation assignments have a forensic accounting component central to the case. Accordingly, a litigious valuation landscape frequently forces end users of detailed valuation reports (attorneys, management, etc.) to place a premium on experts with mastery of essential ―nuts and bolts‖ areas like accounting, taxes and financial statement analysis. These aforementioned skill sets are inherent to all CPAs or Chartered Accountants (CA). (The latter is the term for licensed public accountants outside of the U.S.)  In a litigation context, valuation analysis is commonly labeled litigation support. Litigation support entails professional services encompassing a broad blend of skills such as forensic accounting, damages valuation, economics and detailed duediligence/financial analysis. Presentation and clear speaking skills are also highly beneficial in litigation consulting.

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