Offices of CPA Business Valuations
Why Invest in a CPA Business Valuation?
Maybe you're just curious how much your own CPA firm is worth and want to know how to increase that value, or maybe you're considering purchasing a CPA firm. Whether you're entering or exiting the accounting industry, it's important to know what you're getting into. A CPA business valuation can help you determine:
- Fair purchase price
- Negotiation tactics
- Fair listing price
Many appraisers will use the market approach to build a CPA business valuation, which means they use valuation multiples. Valuation Multiple: a ratio that compares two different factors, such as Price to Revenue or Price to Earnings. In the case of business valuations, a business's value compared to a financial metric like cash flow or earnings.
Here are a few factors that could affect your CPA business valuation:
- Growth Rate: A CPA business valuation will likely be higher if the firm has a strong growth rate.
- Firm Size: Are you a one-person shop or do you have a growing team behind you? This will affect your business valuation as well. Often, there are more buyers for practices that can be operated by one person.
- Location: Urban areas are typically a higher valuation factor for CPA firms, but not always. This is because urban areas typically have more potential buyers than more remote communities do.
- Marketing Strategy: Firms that are professionally marketed often sell at a higher value than those that are not.
- Potential Profits / Cash Flow: This one is pretty simple - the more profitable a CPA firm is, the more valuable it is. Look for cash flow margins to be at or near 45% - 50% of annual revenue.
For a professional CPA business valuation that takes all factors into account, contact us.
Learn more about Business Valuations
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GCF's Business Valuation Accreditations
Your GCF Business Valuation appraisal team has one or more of the following business valuation accreditations:
Accredited Senior Appraiser (ASA) - is recognized as having achieved the highest level of education, training, and report writing for business valuations. The ASA designation is the gold standard for a business valuation professional. (source: American Society of Appraisers)
Certified Business Appraiser (CBA) - a very prestigious credential in the eyes of all who are familiar with it as it earned the reputation of being a difficult credential to obtain. (source: National Association of Certified Valuators and Analysts®)
Certified Valuation Analyst (CVA)
Accredited in Business Valuation by the American Institute of CPAs (ABV by AICPA) - a credential granted exclusively by the AICPA to qualified valuation professionals who demonstrate expertise in valuation through knowledge, skill, experience, and adherence to professional standards. (source: American Institute of CPAs)
- Accredited in Business Valuation (ABV) - credential is granted exclusively by the AICPA to CPAs and qualified valuation professionals who demonstrate considerable expertise in valuation through their knowledge, skill, experience, and adherence to professional standards. (source: American Institute of CPAs)
- Certified Public Accountant (CPA)
Over 25 years of experience and expertise in business valuations and appraisals. An accredited appraiser receives extensive training, remains in good standing, and follows specific industry practices to determine the value of a business.
GCF's Machinery and Equipment Appraisal Accreditations
Expert Equipment Certified Appraiser (EECA) - Our appraisers are recognized with a deep understanding of valuation principles and extensive experience by the Institute of Equipment Valuation.
- Certified Machinery and Equipment Appraiser (CMEA) - a CMEA professional has the expertise and certification to conduct a third party machinery and equipment appraisal.
The GCF Business Valuation Process
