VAs are vital cogs in the investment, audit, and business operations machine who work closely with senior financial managers and board-level investment figures.
Valuation analysts determine the value of any particular company, asset, stock, portfolio, or enterprise. They are the central point of analytical and critical financial assessment of tangible and intangible assets, which utilise a range of statistical models to determine everything from goodwill impairment costs and PPA to total asset value.
Beyond the day-to-day analysis of sales, revenue, cash flow, and debt, VAs are also integral figures within internal audit teams (helping companies meet regulatory requirements while remaining efficient); they assist with bankruptcies, stockholder disputes, transactions, buy-outs and mergers data management, data analysis, and security, and report to multiple teams.
In general, valuation analysts conduct due diligence and look at the following factors to determine the value of an asset, business, or product:
- Profit Margins
- Capital Expenditures
- Tax Rates and Commitments
- PV and Futures
- Investment Options and Analysis
- Stock Analysis
VAs will use analytical and stock valuation models such as absolute and relative valuation, discounted cash flow models, and dividend discount models. They should be familiar with other models, such as residual income models, the comparative model, and equity valuation models, such as present value, multiplier, and asset-based valuation models, all to assist a company’s audit team and clients.
Here Are Some of the Primary Job Responsibilities for a Valuation Analyst:
- Sound understanding of economic trends. VAs are expected to be market leaders regarding finance, stock, investment, and business trends. Like any job in business or finance, a confident knowledge of industry movements is necessary. Still, for valuation teams, it’s essential to know which way the financial winds are blowing to provide accurate valuation statistics in context to any stakeholder.
- Excellent Written and Verbal Communication Skills. To support audit teams, write incredibly detailed reports, and simplify financial research for investors, senior managers, and non-finance team members, valuation analysts need to be proficient communicators.
- Strong Market Analysis Experience and Knowledge of Financial Modelling. As mentioned above, VAs need to come with a full suite of analytical skills and knowledge of complex financial and asset modelling to provide an effective service. Of course, knowing how to utilise comparative modelling is only one element of the role; it’s learning how to align objective, statistical modelling figures with the fast-paced, trend-led, intangible world of investments, stock purchases, and company “health” that separates the VA wheat from the chaff.
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