How is a Business Valued

Certified Public Accountants as Business Valuators

With over a million accountants in the United States alone, accountants comprise a big fraction of the total number of employed people in the United States. A percentage of these accountants are certified public accountants (CPAs).

At most times, the terms ‘accountant’ and ‘CPA’ are used interchangeably. As ‘accountant’ denotes a general term for educated professionals who maintain and analyze financial records, ‘CPA’ refers to a professional designation which carries enormous weight in business. An accountant only becomes a CPA when he/she takes and passes the CPA exam or the Uniform Certified Public Accountant Examination, which was first developed in the early 1900s.

College graduates with a degree in Accountancy or other related courses are eligible to take the CPA examination. He may also be required to have a certain amount of work experience before being eligible to take the exam.

Once a person becomes a CPA, he is already qualified to practice and offer his services. CPAs can work in any of the following areas of finance: taxation, financial planning and analysis, estate planning, information technology, and management consulting. CPAs may operate and provide services for the public or they can be hired by private corporations.

A CPA can also become a business valuator. A business valuator is an appraiser of businesses – meaning, he sets the value upon companies and businesses that are to be sold and bought. The financial information and processes in the buying and selling of a business requires the competency and skills of a licensed accountant.

A business valuator crunches the data about the financial conditions of the business, its liabilities and assets, and its profits, capital, and losses. He must also determine the tax burden of the business which also affects profit. Business valuators also take note of the company image, and its competitiveness in the market.

A business valuator assesses the worth of a company or business. With the help of a business valuator, a party can decide how much it is willing to give to buy a certain company, and vice versa.  A party can also determine how much it is willing to sell its business or company.

Leave a comment

Your comment

How is a Business Valued is powered by WordPress | Entries (RSS) and Comments (RSS)| Partnerprogramm Theme