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  • By Achille Ekeu, MBA, CVA

Why Are Sites Visits and Management Interviews Important in Business Valuation?

In a business valuation engagement, there are many steps in the process of developing an opinion, that the valuation analyst must/should take. One of them is a site visit and management interview. The purpose of sites visits and management interviews are to: (1) gain an understanding of the subject company’s operations and the economic reason for its existence and (2) to identify factors that will cause the company’s future results to be different from an extrapolation of its recent past results.

Why a Site Visit?

It is essential for the analyst to conduct a site visit, because, beside attesting to the physical existence of the business, the site visit also can enhance the understanding of such factors as the subject company’s operations, the efficiency of its plants, the condition of its equipment, the advantages and disadvantages of its location(s), the quality of its management, and its general and specific strengths and weaknesses.

Management Interviews

There are many reasons why a management interview has to be conducted by a valuation analyst. Some of them include understanding:

1- the history of the business

2- compensation policy

3- the markets and marketing policies and plans

4- labor relations

5- regulatory relations

6- supplier relations

7- inventory policy

8- insurance coverage

9- reasons for financial analysis to reveal deviations from industry or guideline company norms

10- off-balance-sheet assets or liabilities

There are several areas of investigation in a management interview. They include:

a- Management’s perspective on the company’s position in its industry

b- Any internal or external facts that could cause the future results to differ materially from the past results

c- Prospects, if any, for the liquidity event (sale of the company, public offering of stock)

d- Why the capital structure is organized as it is, and any plans to change it

e- Identification of prospective guideline companies, either publicly traded companies or private companies that have changed ownership.

During the management interview the analyst can also find out sources of information by asking what trade associations they belong to, what other trade associations exist in their industry, and where do they get their industry’s information. The critical question the analyst must always ask management is: “is there any information that we have not covered which might have an impact on the value of the company?” By asking this question, the analyst protects himself or herself from material omissions and also, places the burden on management to not withhold relevant information.

Persons Outside the Company

It is sometimes helpful to interview persons outside the company such as outside accountant, the company’s attorney, the company’s banker, industry experts, customers, suppliers, and even competitors. They all participate in the growth of the company and could provide valuable information to the valuation analyst.

Achille Ekeu, MBA, CVA


The Washington Valuation Group (WVG)

Achille Ekeu is a Certified Valuation Analyst (CVA) member of the National Association of Certified Valuators and Analysts (NACVA) in the DC-MD Chapter. He provides valuation services for Estate and Gift Tax, Purchase, Sale of business, Debt Financing, Buy-Sell Agreements, and Litigation Support in Divorce/Shareholders disputes cases. He can be contacted by phone at 240-274-9570 or by email at

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