Chapter 3

Research and Its Presentation

A significant part of the valuation process involves identifying and incorporating both internal and external material into the valuation report. Internal information is generated by the subject company and includes items such as budgets, marketing plans, and projections. Information gathered and prepared by an outside firm specifically for and about the company is also considered to be internal information. This information may include financial statements, audit reports, and market analyses. External information is generated by sources outside the subject company, such as trade associations, newspapers, and magazines. An example of external information would be a trade journal article about trends in the subject company’s industry.


Most valuation engagements begin with the collection of data from the subject company. Typically, analysts gather information on the company by reviewing documents, by visiting all or some of the company’s operations, and by interviewing management.


Because of the complexity of the data-assembling process, many professionals use checklists that detail the types of information they are seeking. Addendum 1 presents a sample list of documents requested and questions to be asked in the course of a valuation engagement. Addendum 2 is a sample management interview questionnaire. Both ...

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