Certified Valuation Analyst (CVA)

What Does Certified Valuation Analyst (CVA) Mean?

Certified Valuation Analyst is a professional designation awarded by the National Association of Certified Valuators and Analysts (NACVA) to business valuation professionals. Those who hold a business degree, have sufficient work experience in business valuation, submit business and personal references and recommendations, are members in good standing of NACVA or pay a CVA designation fee, and pass the five-hour multiple choice CVA exam earn the certification.

Successful applicants earn the right to use the CVA designation with their names, which can improve job opportunities, professional reputation, and/or pay. Every three years, CVA professionals must complete 36-to-60 hours of continuing professional education.

Understanding Certified Valuation Analyst (CVA) Designation

Individuals with the CVA designation may work in a range of roles including merger and acquisition consultants, investment and financial analysts, and financial officers. Duties may include providing guidance and figures for a business that is being sold or merged, valuing a business that is being passed to family members, valuing a business so it can better find credit or funding, or determining a buy-in price for those looking to become partners in an existing business.

CVAs may also provide things like exit strategies to business owners or partners, guidance on dissolving or dividing a business, advice on financial matters in the event of a lawsuit, and indicate areas where a company could potentially grow.

The study program to become a CVA covers business valuation fundamentals, techniques and theory, income and asset approaches to business valuation, case analysis, and special purpose valuation.

There are six steps to becoming a CVA:

1. Meet the CVA qualifications and apply for the designation
2. Apply for membership to the NACVA, or pay a CVA designation fee
3. Study the required material in order to take the CVA exam
4. Pass the CVA exam
5. Take part in a peer-reviewed business valuation report
6. Pay NACVA membership fees or CVA renewal fees, as well as collect 36 to 60 hours of continuing education credits every three years to maintain the designation

On average 94% of candidates who sit for the five-hour multiple choice/true-false CVA exam pass. Applicants interested in the CVA designation might also consider whether pursuing a CFA or CPA certification represents a better choice.

Attaining the CVA designation demonstrates a level of seriousness that may be absent in the non-designated business valuation practitioner. Someone thinking about getting the designation may want to first ask around before committing to the program. If currently employed with a firm, try to find out if getting the CVA will improve the chances of attaining a promotion, increased pay, or a desired position. If looking to gain employment, consider the job prospects of a CVA, and then research whether those firms prefer to hire CVAs, or if some other similar designation is in higher demand.

Certified Valuation Analyst (CVA) Duties

Consider the scenario of a CVA who has been hired to value a private business the owner wishes to sell. The CVA's job is to come up with a valuation that is fair. Neither too high, which won't attract buyers, nor too low, which will result in the owner receiving less than the business is worth.

Valuing a business goes beyond applying an industry average price/earnings multiple to it. The CVA will look at more in-depth factors, such as what all the tangible assets are worth, The CVA will also have to evaluate intangibles like customer lists, distribution, management, locations, copyrights, marketability, special agreements, and so on.

The CVA will also look at the business in terms of its management and employees, strengths and weaknesses, and the company's financial health and financial management. They'll also review the macroeconomic picture: the overall environment of the industry and the competitiveness of the company in it, growth prospects for the company and the industry as a whole, and the economic climate of the geographic locations the business operates in.

Using all this data, the CVA will select a valuation methodology applicable to the company and its circumstance. This will provide a value for the company which the owner of the business can then use to negotiate its sale. Coming up with valuation can take a considerable amount of time, from days to months, depending on the size and complexity of the business.