 Determine in advance what
information you need.
 Identify the key words or
topics you are researching. List
synonyms, considering how an online
database might phrase things. For the
travel industry, for example, you also
might search on “tourism.”
Develop a standard
research form to include with every
valuation report. List keywords,
industry name, Standard and North
American Industrial Classification (SIC
and NAICS) industry codes (available at
www.osha.gov/oshstats/sicser.html
and www.naics.com/search.htm
, respectively), top public
companies in the industry and leading
trade publications.
Seek answers to the
following questions:
What are the prospects for
growth?
What are the industry’s
dominant economic traits?
What competitive forces
are at work, and how strong are they?
What are the drivers of
change in the industry, and what effect
will they have in the short and long
term?
Which companies are in the
strongest and weakest competitive
positions?
What key factors determine
success and failure?
How does the profitability
of the industry as a whole compare with
that of other industries?
How large is the industry?
Is the number of large
players growing or shrinking?
Is merger and acquisition
activity increasing or decreasing?
What are the barriers to
entry?
Is the customer base
growing or shrinking?
What key external factors
(interest rates, inflation, new
technologies, legislation or regulation)
are likely to affect the industry?
Examine relevant
sources of information.
Study the industry by
consulting trade-association
publications and Web sites. Check the
resources on
www.cpa2biz.com , the
Encyclopedia of Associations
from Gale Research and the American
Society of Association Executives’
Gateway to Associations search engine at
www.asaenet.org/cda/asae/
.
Check the Form 10-Ks of
the key players in the industry (
www.edgar-online.com ).
For economic trends, visit
analyst sites such as Standard and
Poor’s (
www.standardandpoors.com ),
Integra Information Business Profiler (
www.integrainfo.com
), First Research reports ( www.1stresearch.com
), Thomson Research ( http://research.thomsonib.com
) and MarketResearch.com
.
Register at Yahoo Finance
(
http://finance.yahoo.com/?u ) to
receive regular news updates on publicly
traded companies you wish to track.
Evaluate the
reliability of the information you
locate by asking
Who are the authors of
this information?
Are they the actual
researchers or just editors?
Can you reach them to ask
further questions?
What vested interests
might they have?
How current are the data?
Are the sources of
statistics documented?
Can you use the references
that are cited to find more information?
Prepare an industry
analysis to include in the valuation
report. Relate the
industry and economic trends you have
uncovered to your valuation conclusion.
Adapted from Financial
Valuation: Applications and Models
by James R. Hitchner, John Wiley
& Sons Inc., Hoboken, New Jersey,
2003.
| For information on
the AICPA’s Accredited in
Business Valuation (ABV)
credential, see
bvfls.aicpa.org . | | 
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