James R. Hitchner - Financial Valuation Workbook: Step-by-Step Exercises and Tests to Help You Master Financial Valuation

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Fourth Edition with Website

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Copyright 2017 by James R. Hitchner. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.

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ISBN 978-1-119-31234-5 (Paperback)
ISBN 978-1-119-31235-2 (ePDF)
ISBN 978-1-119-31247-5 (ePub)

To my son, Jason Earle Hitchner, and my godmother, Aunt Thelma Reid.

The Financial Valuation Workbook (FVW) contains both educational exercises that guide the reader through a complete business valuation and valuation tools that professionals can use in preparing business valuations. It also contains detailed information on how to run a successful valuation practice. It is structured to be used on a standalone basis. It is also a companion text to Financial Valuation Applications and Models, 4th edition (FVAM) (John Wiley & Sons), in which the subject matter contained in the workbook is expanded upon. This workbook contains basic, intermediate, and advanced topics on valuing businesses conveyed in a series of easily understandable exercises with comprehensive answers.

FVW is targeted to the following professionals and groups that are typically exposed to financial valuation issues:

• Appraisers
• Appraisal associations and societies
• Actuaries
• Attorneys
• Bankers
• Business brokers
• Business executives, including CEOs, CFOs, and tax directors
• Business owners
• CPAs
• Estate and gift planners
• Financial analysts
• Government agencies including the IRS, SEC, and DOL
• Insurance agents
• Investment advisors
• Investment bankers
• Judges
• Pension administrators
• Stockbrokers

FVW contains eight chapters, each with a different purpose.

Chapter 1 contains more than 80 exercises that have been placed throughout excerpts of an actual business valuation report presenting numerous valuation topics, including rates of return, the capitalized cash flow method of the income approach, and the guideline company transaction and guideline public company methods of the market approach.

Chapter 2 contains comprehensive answers to the exercises in Chapter 1.

Chapter 3 includes more than 300 exercises that comprise a companion piece and correlate to the relevant chapters of Financial Valuation Applications and Models, 4th edition. These exercises/tests can be used to prepare for business valuation certification exams or for university professors in the academic field or as reinforcement to learn the material.

Chapter 4 includes more than 450 ValTips that are extracted from the companion book, FVAM. This summary of ValTips can serve professionals as a quick reference source of important concepts, application issues, and pitfalls to avoid.

Chapter 5 presents a Valuation Process Flowchart to allow professionals to follow a more structured process in applying and documenting the income approach.

Chapter 6 highlights strategies for marketing, managing, and making money in a valuation services practice. It discusses risk management in regard to reports and engagement letters, and gives examples of each. This chapter also includes information on how to keep up technically; find, train, and retain staff; and delegate authority.

Chapter 7 includes guidelines for practice management workflow procedures, which starts with the initial prospective client call, highlights checking points through the valuation analysis, then moves on to draft and final record, then to file retention and engagement closure.

Chapter 8 includes more than 40 checklists that can be used by professionals in documenting their valuations. It can also be used by less-experienced professionals as a guide in applying valuation concepts.

This book also includes a companion website, which can be found at www.wiley .com/go/fvamwb4e. The website includes the exhibits and forms found in Chapter 7, and the checklists found in Chapter 8.

Financial valuations are very much affected by specific facts and circumstances. As such, the views expressed in these written materials do not necessarily reflect the professional opinions or positions that the authors would take in every business valuation assignment, or in providing business valuation services in connection with an actual litigation matter. Every situation is unique and differing facts and circumstances may result in variations of the applied methodologies. Furthermore, valuation theory, applications, and methods are continually evolving and, at a later date, may be different from what is presented here.