Certified Valuation Analyst (CVA) Practice Exam

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Prepare for the Certified Valuation Analyst (CVA) Test. Study with flashcards and multiple choice questions. Each question includes hints and explanations to help you get ready for your exam!

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What generally characterizes a business at going-concern value?

A business that is closing down
A business that is profitable and functioning normally
A business sold for liquidation purposes
A business in the early startup phase

The correct answer is: A business that is profitable and functioning normally

Going-concern value pertains to the worth of a business that is actively operating and expected to continue its operations in the foreseeable future. This value reflects not just the tangible assets of the business but also the intangible aspects such as customer relationships, brand reputation, and the ability to generate ongoing revenue. A business characterized by going-concern value is typically profitable and functioning normally, which means it is expected to generate profits and maintain its operations over time. This perspective contrasts sharply with scenarios like liquidation or business closure, where the focus shifts to selling off assets rather than sustaining operational viability. Therefore, the correct characterization of a business at going-concern value is that it is profitable and functioning normally, ready to meet its obligations while pursuing growth.