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This course covers business valuation basics.  The valuation process starts with understanding and calculating the data that must be compiled before applying the data to the valuation methods. 

Next, the course shows how to apply data to the Discounted Cash Flow Method, Capitalization of Earnings Method, and the Selling Market Method which is based on the multiples of which similar companies have sold (EBITDA, Book Value and Earnings). All three methods are then weighted to arrive at an estimated Fair Market Value of a business.  The Fair Market Value estimated by the process is then validated by calculating a buyer’s return on equity in a fictitious sale of the company.

Valuations limited to only financial data and calculations are technically referred to as the “calculated value”.  A certified valuation professional would need to make a site visit and interview the appropriate personnel to understand any subjective adjustments that are needed in order to make the valuation compliant with IRS Ruling 59-60.  The process presented in the course follows the general process utilized by most valuation professionals.

Learning Objectives

  • Identify which Income Statement and Balance Sheet accounts might require adjustments to calculate the Fair Market Value of a Company. 
  • Explore the process to arrive at a company specific discount and capitalization rates.
  • Recognize when it is appropriate to use different valuation methods.

10 Reviews (34 ratings)Reviews

5
Member's Profile
A variety of valuation techniques was discussed as well as what adjustments should be made and when each technique is relevant. Well presented and easy to follow.
4
Anonymous Author
Very informative, and I agree with the assessment that the data is very useful for understanding what changes can impact your value the most.
5
Anonymous Author
Well organized presentation. Good discussion of different valuation methods and detail examples of various calculations.
5
Member's Profile
Excellent, crystal-clear overview of the entire valuation process. Best course I have taken on Illumeo to date.
5
Member's Profile
Good overview in easy to understand format..you can tell Roger has done this overview a few times!
4
Anonymous Author
Very concise treatment of the subject. Good focus on typical adjustments to earnings.
5
Anonymous Author
Not too heavy, concise and digestible.
5
Anonymous Author
Great overview and very helpful.
4
Member's Profile
Great course
5
Anonymous Author
Good review.

Prerequisites

Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course. A strong background in finance or accounting with clear understanding of financial statements and their requirements is helpful.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION and OVERVIEW
  8:08Introduction to Business Valuations - Approaches & Methods to arrive at Fair Market Value
Business Valuations
  9:44Adjustments to Financial Statements
  5:31Discount and Capitalization Rates
  3:57Calculating Business Value
  5:51Valuation Methods
  8:17Overview of Methods
CONCLUSION
  10:37The Business Valuation Process
Continuous Play
  52:05Business Valuations - Approaches & Methods to arrive at Fair Market Value
SUPPORTING MATERIALS
  PDFSlides: Business Valuations
  PDFBusiness Valuations Glossary/Index
REVIEW and TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM