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Test Number : CVA
Test Name : Certified Valuation Analyst (CVA)
Vendor Name : Financial
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CVA exam Format | CVA Course Contents | CVA Course Outline | CVA exam Syllabus | CVA exam Objectives


Certified Valuation Analyst� (CVA�) Determine, Defend, and Maximize Company Value�

Business valuation is the "Gold Rush" of the century. 10 million small businesses will change hands over the next 10 years. Could you confidently advise your clients if they came to you faced with these issues=>
An opportunity arises to sell or merge the business.
They are faced with transitioning the business to family members or other partners.
They are looking to expand the business and need to secure capital.
They are taking on new partners and need to determine buy-in price.
They are reaching retirement and considering an exit strategy.
Business partners or shareholders are exiting, requiring the business to be divided or dissolved.
They are embroiled in financial litigation.
They want to focus energies to grow company value.

Establish your authority in matters of value! Bolster your reputation with your clients. Enhance your credibility within the business community. Demonstrate competency to the courts that you can articulate business value.

I. OVERVIEW 4.0%
A. Purpose for business valuation 0.5%
1. Financial accounting
2. Tax valuations
3. Litigation
4. Merger and acquisition
B. Standards of value 1.5%
1. Definitions of standards of value, including
a) Fair market value (U.S. based definition as starting point)
b) Statutory fair value
c) Financial reporting fair value
(1) IFRS
(2) U.S. GAAP
d) Investment (strategic) value
e) Intrinsic (fundamental) value
2. Relationship between purpose of the valuation and standard of value
C. Premise of value 0.5%
1. Going concern
2. Assemblage of assets
3. Liquidation (orderly or forced)
D. Principles of value 1.0%
1. Value is determined as of specific point in time
2. Value reflects prospective cash flow
3. Value reflects the level of risk into the rate of return
4. Value is influenced by liquidity
E. Levels of value 0.5%
1. Lack of control (minority vs. control)
2. Marketable vs. non-marketable
3. Strategic and investment value
II. PROFESSIONAL RESPONSIBILITIES AND STANDARDS 4.5%
A. NACVA Standards 1.5%
B. Ethical considerations 1.0%
C. Communicating and reporting analysis and results 1.0%
D. Roles of the valuation analyst in litigation services 1.0%
III. ENGAGEMENT ACCEPTANCE AND PLANNING 3.0%
A. Defining the engagement 1.0%
1. Valuation date and its importance
2. Structure of the entity
3. Interest being valued
4. Purpose and objective of valuation
5. Standard of value and premise of value
6. Conflict checks
B. Engagement Letters 1.0%
1. Purpose
2. Content
C. Acceptance 1.0%
1. Experience
2. Staffing
3. Expectations
IV. QUALITATIVE ANALYSIS 9.0%
A. International Sources of Data 1.5%
B. Economic Environment 1.5%
1. Macro-environment
2. Micro-environment
3. Relationship of economic activity to the valuation
C. Industry background 3.0%
1. Economic data
2. Structure, trends, and life cycle
3. Market and competitive analysis
D. Company background 3.0%
1. Company structure and ownership
2. Site visit and interviews with key personnel
3. History and nature
4. Economic data (cost structure, pricing power, marginal analysis)
5. SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats)
V. QUANTITATIVE ANALYSIS 15.5%
A. Financial statements 4.5%
1. Source (audited/reviewed/compiled/tax returns/internal)
2. Number of years to obtain
3. Common size
4. Trend analysis
5. Ratios
6. Comparative analysis
a) Specific company
b) Industry averages
B. Adjustments to financial statements 4.5%
1. Normalizing
a) Control vs. non-control
b) Discretionary
c) Reasonable compensation analysis
d) Extraordinary/non-recurring
2. Operating vs. non-operating items
3. Off-balance sheet and unrecorded items
C. Statistical Analysis 3.0%
1. Measures of central tendency (arithmetic, harmonic, geometric means)
2. Measures of dispersion (including variance and standard deviation)
3. Statistical strengths of numerical relationships (including covariance, correlation, coefficient of determination, and coefficient of variation)
4. Linear regression
D. Types of benefit streams and selection 3.5%
1. Selection of appropriate time periods (including mid-year convention)
2. Selection of appropriate type of income/cash flow
3. Growth assumptions
a) Trend line projected
b) Constant
c) Erratic
d) Level
e) Declining growth approaches
E. Historical vs. projection based on considerations
F. Relating effects due to economic/industry events and trends
G. Pass-through entities � tax effecting of the benefit stream
VI. VALUATION APPROACHES 28%
A. Income approach 10%
1. General theory
2. Defining applicable income/cash flow
3. Sources of data
4. Capitalization vs. discount rates
5. Commonly used methods
a) Discounted economic income/cash flow method (DCF) (multi-stage model)
(1) The method is applied using cash flow available to invested capital
(2) The method is applied using cash flow available to equity
b) Capitalized economic income/cash flow method (CCF), including Gordon Growth
Model (constant growth model)
(1) The method is applied using cash flow available to invested capital
(2) The method is applied using cash flow available to equity
c) Excess earnings (cash flow) method
d) Dividend paying capacity
B. Market approach 8.0%
1. General theory
2. Commonly used methods
a) Transactions in subject companys stock
b) Transactions/sales of companies similar to subject
(1) Guideline public companies
(a) General theory
(b) Selecting guideline companies
i) Sources of data
ii) Size adjustments
(c) Equity vs. invested capital (including multiples)
(d) Selection of appropriate time periods
(e) Selection of appropriate multiples
i) Adjusting for growth, size, and company specific risk
(2) Guideline merged and acquired companies
(a) General theory
(b) Sources of data/relevant transactional databases
(c) Consideration of the selection of data points
C. Asset Approach 6.0%
1. General theory
2. Sources of data
3. Commonly used methods
a) Book value
b) Net tangible value
c) Adjusted net asset method (intangible and tangible assets)
d) Excess earnings method
e) Liquidation method (forced or orderly)
4. Identifying and valuing intangible assets
a) Approaches and methods
b) Estimated life
c) Impairment
5. Off-balance sheet and unrecorded items (including tax issues)
D. Sanity Checks 2.0%
1. General theory
2. Sources of data
3. Commonly used methods
a) Industry formulas (�Rules of Thumb�)
b) Justification of purchase
E. Reconciliation of indicated values 2.0%
VII. COST OF CAPITAL CONCEPTS AND METHODOLOGY, AND OTHER PRICING MODELS 17.5%
A. Capital asset pricing model (CAPM) 6.0%
1. Risk free rate
2. Equity risk premium
3. Beta (�) including un-levered and re-levered
B. Build-up method and Modified CAPM 5.5%
1. Risk free rate
2. Equity risk premium
3. Beta (�) including un-levered and re-levered
4. Size risk premium
5. Industry risk premium
6. Company specific risk
7. Long-term sustainable growth
8. Other
C. Weighted average cost of capital 4.0%
D. Converting after tax risk rates to pre-tax rates 1.0%
E. Other recognized methods (e.g. Gordon Growth, Arbitrage Pricing, Fama- French Three Factor, Market Multiples, Risk Rate Component Model) 1.0%
VIII. DISCOUNTS, PREMIUMS, AND OTHER ADJUSTMENTS 13%
A. Levels of value and effect on discounts and premiums 2.0%
1. Synergistic value
2. Control value
3. Non-controlling, marketable value
4. Non-controlling, non-marketable value
B. Adjustments for Control Issues 3.5%
1. General theory
2. Sources of data
3. Ownership characteristics
4. Magnitude
5. Relationship to how benefit stream is defined
C. Adjustments for Marketability Issues 3.5%
1. General theory
2. Sources of data
3. Ownership characteristics
4. Restrictions on transferability
5. Magnitude
6. Models
D. Discounts and premiums�understanding the empirical studies 2.0%
E. Subsequent events 1.0%
F. Other valuation discounts and adjustments (e.g. Key Person, Blockage, Restrictive Agreement, Lack of Voting, Lack of Liquidity, Contingent Liabilities) 1.0%
IX. SPECIAL PURPOSE VALUATION 5.5% %
A. Intangible assets 2.0%
B. Debt securities 0.5%
C. Convertible securities 0.5%
D. Preferred stock 0.5%
E. Stock options 0.5%
F. Voting vs. Non-voting stock 0.5%
G. Professional vs. practice goodwill 0.5%
H. Other special purpose valuations (e.g. Fair Value, Mergers and Acquisitions, Pension Benefits, Insurance policies) 0.5%
Total 100%



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Financial Cheatsheet

'essentially the most annoying four hours of my profession:' the way it feels to be the sufferer of a hacking assault | CVA PDF Dumps and Test Prep

a good deal of the analysis of cybercrime tends to focal point on the fiscal charges or the technical facets concerned. That ability the psychological affect of falling sufferer to hacking, ransomware or other cyberattacks tends to be omitted.

there is a common perception that cybercrimes won't have as dangerous an have an impact on as some genuine crimes, observed Professor Mark Button, director of the Centre for Counter Fraud studies on the tuition of Portsmouth. however his analysis has discovered that computing device misuse crime can have an identical have an effect on to crimes like housebreaking, and in some instances worse.

Button's group interviewed fifty two victims of desktop misuse for a record commissioned by using the home workplace to assess the influence of computer crime, including anything from hacking, intentional virus infections to denial-of-provider attacks and ransomware. laptop crime money owed for around 10% of all suggested crime.

SEE: the way to turn into a cybersecurity professional: A cheat sheet (TechRepublic)

Some victims feel violated like or not it's a genuine assault, talked about Button. Many victims stated psychological impacts such as anger, anxiety, worry, isolation and embarrassment.

"it is stressful, it's frightening in loads of techniques. And it be very distressing that whatever you could work on for 2 years, can just, in a heartbeat, disappear," said one sufferer, a small business employee, who turned into interviewed for the report.

Of the fifty two situations, best four ended in a criminal conviction. in the majority of instances there become no hobby from the police -- simplest 13 obtained some sort of police response akin to a mobile call, a consult with or other verbal exchange.

The survey victims experienced fiscal losses starting from £2 to £10,000. in a single case, an SME incurred over £80,000 in expenses dealing with the consequences of the incident. yet another misplaced £forty,000 and 70% of its consumers as a result of a hacking assault.

but the have an impact on was now not quite simply to do with the economic have an impact on of an assault.

"In some circumstances they didn't lose any money in any respect, however the impact changed into somewhat devastating," Button stated. for example, one small company proprietor whose PCs have been frozen by by way of ransomware determined to move returned to the use of bureaucracy as a result of he felt very uneasy afterwards.

"That become probably essentially the most worrying four hours of my career. and i got here in, within the morning, absolutely expecting to get sacked because on the end of the day it be my internet server, it be my accountability to make certain that this, you understand, does not turn up," talked about another victim of hacking at a small employer.

One small company responded angrily to an attempted ransomware assault: "The other affect of path is a sense of anger, I think, that someone would put you through such inconvenience in an attempt to extort money from you".

Some victims struggled to get the police to tackle their case, even when there turned into clear evidence of a criminal offense. The analysis discovered that SME ransomware victims have been without doubt to get hold of a talk over with, however in most instances there turned into little the police could do.

SEE: Cybersecurity warning: Hackers are concentrated on your smartphone as way into the company community

in many instances, there don't seem to be enough cops knowledgeable to deal with cybercrime -- and even then, these crimes are intricate to investigate and not going to be cleared up because the criminals will doubtless be overseas and out of reach.

"it be both an perspective and a useful resource difficulty, and this classification of crime is simply going to get larger, so it in fact does need to be addressed," Button observed.

a lot of victims additionally require technical aid but do not know the place to get it, Button introduced.

among the many document's techniques is that motion Fraud should be renamed the 'country wide Fraud and Cyber Crime Reporting Centre' to make its position clearer. The report spoke of that each one cops coping with victims should be enhanced knowledgeable in what constitutes computing device misuse crime, and that motion Fraud and the police may still do extra to ensure that victims receive well timed tips on what has occurred relating to their case. Police should also commit greater resources towards tackling computing device crime, the report talked about.


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