|
|
| Normalizing Financials in Business Valuation: Using Forensic Accounting Skills to Your Advantage (2094Q) |
Course CPE: 1 hour
Field(s) of Study: Finance–1 hr
Program Level: Intermediate
Prerequisites: Previous training or research on subject matter being taught. Such persons are often at a mid-level within the organization, with operational and/or supervisory responsibilities.
Advanced Preparation: None
Delivery Method: QAS Self-Study |
Item
Number: 26BV0427NFB
Shipping Weight: 0lbs. 0oz. |
| Price:
$99.00 |
|
|
|
|
Recording Date: April 27, 2026
Presenter: Andre Castillo
Program Description:
When valuing a business, one essential step in the process is to review and analyze the subject company’s historical financial information. This information allows a business valuator to analyze the company’s past performance, identify where it stands compared to others in its industry, and pinpoint trends in the business to forecast its future performance, which is vital to determining the company’s value.
However, for most closely held businesses, certain aspects of their historical financials may need to be adjusted to capture their true economic well-being. These adjustments are called normalization adjustments and are intended to remove the items from a subject company’s financials that a willing buyer would not take into consideration when assessing the income or cash flow of the company on a go-forward basis.
Some items that would require normalization adjustments include nonrecurring income or expenses and owner’s discretionary expenses, such as owner’s compensation and perquisites. These items may not be reflective of the subject company’s true economic performance and more reflective of the decisions made by the previous management or owner. Therefore, a willing buyer of the business may not expect these items to affect the business in the future.
Not all business valuators are forensic accountants, but when they are, they have the analytical skills to effectively identify normalization adjustments required when valuing a business. Through this presentation, I will share investigative techniques and analyses, often used by forensic accountants, that are very beneficial in the normalization process of a business valuation.
Takeaways:
Normalizing financials require skillsets in analyzing financial information and digging deeper into these datasets to identify what needs to be adjusted. Forensic accountants have the investigative skills to pinpoint these items. These skills can be very useful when determining the economic performance and outlook of a subject company in a business valuation engagement.
After completing this course, you will be able to:
- Recognize the importance of normalizing financials for valuation
- Identify normalization adjustment items in historical financials
- Differentiate how financial forensic case studies are similar to business valuation case studies
- Select analytical skills and techniques to identify normalization adjustments
- Recognize that forensic accounting skills can be applied to business valuations
- Determine how to revise and enhance your financial analysis process in business valuation
For more information regarding refund or concerns, please contact our offices at (800) 677-2009.
The Consultants’ Training Institute (CTI) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.
|
|
|
