- NY Credits : 2.0
- TX Credits : 2.0
Valuation Methods - The Normalization of Earnings
An important step in the business valuation process is the normalization of earnings. Many companies subject to business valuations are smaller, closely held companies. It is not unusual for such organizations to treat various financial items differently than the publicly held companies chosen as comparables. Thus, earnings often need to be normalized in order to make an effective comparison. Even when market or income business-valuation approaches are used, normalization adjustments are frequently needed for the financial statements of closely held companies.
Upon successful completion of Valuation Methods: The Normalization of Earnings, the user should be able to:
describe the normalization of earnings, and
demonstrate the normalization of earnings.