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.
Last updated/reviewed: March 27, 2024
18 Reviews (93 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.

5
Anonymous Author
Very good overview of business valuation. For a one hour CPE course was not expecting too much detail, however this one hour CPE used that time very effectively.

5
Anonymous Author
Excellent course. Material presented in a well organized manner with the correct level of detail. The slides are easy to follow and serves as a good reference.

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
Excellent course. I have been in business for 30+ years and involved in many valuations. Course hit all the right points.

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.

4
Anonymous Author
Excellent course describing valuation methods than can be utilized to determine fair market value of a business.

5
Member's Profile
Good overview in easy to understand format..you can tell Roger has done this overview a few times!

5
Member's Profile
Enjoyed course. Provided a refresher and step by step and easy to follow approach to valuation.

4
Anonymous Author
Very concise treatment of the subject. Good focus on typical adjustments to earnings.

5
Anonymous Author
Great review of valuation methods, and weighted ave value using the various methods.

4
Member's Profile
Good course for quick overview of the business valuation process.

5
Anonymous Author
Good practical course ---the slides are a great reference tool

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 .
Instructor for this course
Course Syllabus
INTRODUCTION and OVERVIEW
  Introduction to Business Valuations - Approaches & Methods to arrive at Fair Market Value8:08
Business Valuations
  Adjustments to Financial Statements 9:44
  Discount and Capitalization Rates 5:31
  Calculating Business Value 3:57
  Valuation Methods 5:51
  Overview of Methods 8:17
CONCLUSION
  The Business Valuation Process10:37
Continuous Play
  Business Valuations - Approaches & Methods to arrive at Fair Market Value52:56
SUPPORTING MATERIALS
  Slides: Business ValuationsPDF
  Business Valuations Glossary/IndexPDF
REVIEW and TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam