Business valuations are performed because ownership interests in privately held
companies often represent a significant portion of one’s estate and/or
portfolio. The value, or worth, of an interest in a privately held company, as
opposed to stock in a public company, is usually unknown because there is no
active market to sell or trade that interest from which to ascertain or
approximate value.
Possibly one of the best reasons for obtaining a business valuation is to use it
as a management tool. A prime objective for every business enterprise, large or
small, is to improve and maximize its value to the owners.
A properly prepared business valuation provides management with insightful
information that helps them identify company strengths and weaknesses that
affect value, allowing management to more effectively focus their energies in
places that really count. A business valuation, prepared periodically, also
serves as a measurement tool that helps owners assess overall success and
management effectiveness.
Many business owners believe the value of their business is net profit, or gross
sales, multiplied by some industry rule of thumb. This is simply not the case.
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 the business goodwill.
Quite often, the value of a company’s intangible assets is much greater than the
tangible assets. Valuing intangibles, however, is where one needs the services
of a qualified business valuation professional: it requires a careful analysis
of many aspects of a business enterprise and requires skills acquired through
specialized training and experience.
The National Association of Certified Valuation Analysis (NACVA) certifies
Mr. Lingler to perform business valuations. The Association requires training as a
prerequisite to certification to assure practitioners have the knowledge and
understanding necessary to perform competent services, and to assure a level of
consistency and continuity in their work/product.
Through compliance with recertification, certified members demonstrate their
commitment to the business valuation discipline and keep themselves current on
changes in the industry which might impact how they perform their services.
The CVA certification/designation is from the largest global
professional business valuation associations. Please see the credential comparison chart at
