Research On The Methods Of Intrinsic Value Evaluation Of The Enterprise Based On Financial Decision Perspective

The enterprise value is the most accurate and comprehensive indicator to measure thecorporate performance and the overall quality. Enterprise value evaluation makes thebusiness enterprise as a whole and it has gradually become an important developmentdirection of modern asset appraisal industry to exchange value of the overall evaluation of itstransactions. The enterprise value has different forms in different conditions and reflectsdifferent forms of value, as corporate book value, fair value, liquidation value and intrinsicvalue. The intrinsic value of the enterprise is the basis of business investment, reflects thecompany’s future earning power. In recent years, with changes in corporate financial goalsgradually from profit maximization to the maximization of enterprise value, the intrinsicvalue of the enterprise is becoming more and more concerned about the core content of thevarious departments of the enterprise. Enterprise evaluation of the intrinsic value ofscientific and effective financial decisions are closely linked, different levels ofdecision-making will bring different benefits and risks, the financial decisions of science areable to differentiate all the negative factors, high levels of use of funds to achieve thesustainable development of enterprises.Japan has started to pay attention to corporate intrinsic value evaluation for a long time,since the late1950s, the Japanese from all walks of life for intrinsic value theory, valuecreation, corporate intrinsic value evaluation aspects launched a systematic study. Becauseof the Japanese corporate reorganization, merger, bankruptcy and liquidation as well as thesale and transfer of the entire enterprise in a highly frequent, these activities are related to theintrinsic value evaluation, therefore, resulting in a wide range of practical applications of theenterprise intrinsic value evaluation in Japan. So far, Japan has the intrinsic value of theenterprise evaluation theory and empirical research has reached a higher level. The author asthe national public school project in the year2011-2012joint training of doctoral studyabroad went to the Department of Economics at the University of Hokkaido, Japan, duringthe practice based on the theory analysis.In this context, this paper sort out the evaluation of the theoretical context of theenterprises under the intrinsic value of financial decision-making perspective, and intrinsic the method of intrinsic value of the enterprise evaluation based on financial decision-makingperspective through the enterprise value and its evaluation, the intrinsic value of itsevaluation, has well as financial analysis and corporate intrinsic value evaluation theory andliterature review, combing and induction. In research ideas, the concept of the intrinsic valueof the enterprise from the point of view of financial accounting definition, evaluation of theintrinsic value of the enterprise, and an overview and analysis of the intrinsic value of theenterprise evaluation based on the financial decision-making perspective; Secondly,according to the existing three common evaluation of the intrinsic value of listed enterprisespractical application, and evaluation of the results were analyzed, summed up the existingproblems of each method in practical applications; again, according to the advantages anddisadvantages of the existing methods based on financial decisions the enterprise valueevaluation method, and the method to determine the parameters summarized thus improve;Finally, the practical application of intrinsic value evaluation method based on financialdecision-making perspective, the intrinsic value of Japan’s Canon Inc. evaluation andfinancial decisions. In research methods, this paper used the method of comparative analysis,logical reasoning, reasoning induction and quantitative analysis, it not only focus on the useof advanced theoretical methods, but also give full consideration to the development trend ofthe intrinsic value of the enterprise evaluation methods, Pay attention to the theory andpractice, closely integrated, comprehensive validation of quantitative and qualitative,normative and empirical integrated approach, in order to ensure the integrity of the entirecourse of the study, systematic and scientific.According to the research ideas and research methods, comparative analysis of relevanttheory and literature review, the conceptual model and evaluation method based on thefinancial decision-making perspective intrinsic value evaluation method, and determined bythe parameters, model checking and adjustment of the method sound and practicalapplication, the main contents include the following sections:First, the paper takes three existing evaluation intrinsic value method: the discounted cashflow method (DCF method), economic value added valuation method (the EVA evaluationmethod) and Ohlson model for comparative analysis of their respective advantages anddisadvantages and scope of application be summarized. This paper takes the three methodson the number of enterprises at the same time the intrinsic value of the evaluation, acomparative analysis of each method average rating error, to verify the accuracy, relevanceand effectiveness of three methods of evaluation. Based on the results, list the actual use ofthe intrinsic value evaluation method problems, and to examine the usefulness of the evaluation method of the intrinsic value of the enterprise on these issues point. Due to theintrinsic value of the enterprise is constantly changing, so in order to calculate the accuracyenterprises with high intrinsic value, you need to analyze and measure the various operatingelements that affect the intrinsic value within the enterprise based on the perspective offinancial decisions for later value evaluation method laid the foundation.Second, proposed the new method and makes it perfect. From the point of view offinancial decision-making, financial analysis based on the intrinsic value of the enterprisebased on financial projections model evaluation methods, in order to be able to moreaccurately evaluate the enterprise intrinsic value. The method to analyze and measure thevarious operating elements affect the intrinsic value of the enterprise, the enterprise of allkinds of information in accordance with the main line of value creation sorting and links, andon this basis, to complete the analysis of the financial situation of enterprises, forecasts andvalue evaluation. Taking into account the method may be involved in the practicalapplication of enterprise characteristics due to the different conditions of market economy,thereby affecting the evaluation process to determine the intrinsic value of the enterprise, sothis paper to determine the evaluation parameters in the process of evaluating the intrinsicvalue of enterprise range evaluation method selected research and analysis, and to determinethe enterprise value evaluation method based on the perspective of financial decision-makingrelated to the evaluation of parameters, including: risk yield determination, determine therisk-free rate and to determine the price-earnings ratio. Last inspection and adjustment of thefinancial forecasting model summarizes the applicability and limitations of financialforecasting model, and the improvement of the intrinsic value of the enterprise evaluationmethod based on the financial decision-making perspective.Third, this paper practice application of the new method. Previous established on the basisof the financial forecast model from reality and the practical application of the evaluation ofthe intrinsic value of Japan’s Canon Inc.. Canon studying in Japan during the survey data,historical performance analysis, and to develop the forecast financial statements, after thedetermination of the cost of capital, the value of the weighted average cost of capitalobtained by the gearing ratio and equity ratio, the intrinsic value of the enterprise evaluation,and based on the results of evaluation, verify the validity of the results. Evaluation valuederived from the results of the evaluation and the three commonly used intrinsic valueevaluation method together with the value of the reference point for comparative analysis.Finally, this paper analysis the financial decisions of the Canon.In summary, evaluating the intrinsic value of enterprises is a very important reference for enterprises in economic activities is an important indicator of corporate profits andpotentially profitable, so the evaluation method of the intrinsic value of the enterprise is inthe stage of vigorous development, in order to overcome the limitations of the variousevaluation methods, developed a set of more mature scientific and theoretical system stilltake a very long process. What kind of intrinsic value evaluation method has an absoluteadvantage in the value of the evaluation activities, due to the different purpose, object,information, environment, various methods have some limitations. With the constantimprovement of the basic theory and research methods, evaluation of the intrinsic value ofthe enterprise to be more scientific, practical, objective and easy. The intrinsic value of theenterprise and financial decisions to increase the intrinsic value of the enterprise and choicein terms of a reasonable capital structure is very important, but also the intrinsic value of theenterprise and financial decisions related research theoretical innovation, based on financialdecision-making perspective can effectively fill enterprise intrinsic value evaluation studiesblank.