Study On The Theory And Methods Of Enterprise Valuation

Enterprise valuation not only provides a scientific and reasonable measure of value for external property exchange such as M&A and IPO, but also is an important tool for company value management. Because of the relatively late start of the assets appraisal industry in our country and the weak research of the enterprise valuation theory, the problem of misusing enterprise valuation methods has existed in our country for a long time. Through analysis of large amount of literature and many years' enterprise valuation practice, I have the opinion that a lot of problems in the theory and methods of enterprise vluation demand prompt solution. This paper does systematical research on the theory and methods of enterprise valuation by means of using comparative research and empirical research. The main research task is as follows:This paper methodically explains and meticulously compares the four current methods of enterprise valuation. It can be concluded from the researches that though the assets based valuation method and the real option valuation method have certain scope of application, they don't have universality; the discounted income valuation method is the popular method of valuation, but it still needs theoretically clarifying and improving in long-term return forecast; the relative comparison valuation method is easy to use, however, because of the monotonous factor the model considers and the high degree of subjectivity in discrepancy adjustment, it makes standard measurement necessary. This paper explains and organizes the theory of enterprise valuation from two angles that are the theory of firm intrinsic value -the discounted income valuation method and the theory of firm market value -the relative comparison valuation method. It has a deep discussion of enterprise value creation and the driver of enterprise value, and constructs a complete frame of assessing the firm intrinsic value. It points out that the intrinsic value and the market value constitute the two different sides of enterprise value and the hypothesis of market efficiency is the theory joint of the two. Based on the research on the theory of firm life cycle, this paper improved on the discounted income valuation method. It points out that the hypothesis of going concern in the discounted income valuation not only deviates from the reality, but also makes a logical mistake. According to the proper implications of the theory of firm intrinsic value, the duration should be used instead of the hypothesis of going concern. The research shows that the life cycle of the enterprise is closely related to that of the industry in the short term, but they are poorly related in the long term, which makes it unrealistic to predict the life cycle of the enterprise and long-term return from the angle of long term. To avoid the difficulty of long-term return forecast, after pointing out the predecessors'mistake of multiple model-based discounted cash flow improving model, on the basis of residual earnings model, this paper deduces the P/B multiple-based residual earnings model improvement.This paper brings forward the improvement of the relative comparison valuation method based on the multiple statistical technology. It makes multiple regression analysis with the share price of listed company in the IT industry as the explained variable and influencing factors of enterprise value as theexplaining variable. The results of regression verify ihe reasonability of the residual earning model and the comparatively effectiveness of the capital market in our country, and provide an empirical basis for the application of the relative comparison valuation method in our country. It further advances the multi-factor comparable enterprise similarity model based on the factor analysis and clustering analysis technology, which provides a new way to choose the comparable companies. The construction of the comparable enterprise similarity model helps to further promote the scientificness and standardization of the relative comparison valuation method.