Study On The Theory And Method Of Business Valuation

Business valuation based on modern economy is one of the most difficult and comprehensive professional work in asset appraisal ,but also stands for the trend of the appraisal .As China implemented planned economy all the long in the past years ,the concept of business value was proposed later than other advanced countries .The study on the theory and method of business valuation we made is relatively backward .All these lead to that we merely use cost method in practice .With the improvement of market economy ,the validity of cost method is challenged .Hunting for appraisal methods suitable for China circumstance has become more and more urgent .This thesis presents its own opinion on the adjustment of the basic frame of theory of business valuation .For the first time ,it puts systems theory into the study of the theory base ,and believes that the enterprise as a compound entity has higher efficiency than the sum of its constituent ,and then proposes new appraisal assumption .Aiming at the obscure understanding ,it analyses a group of conception related to business valuation .After giving a whole analysis and study ,this thesis indicates the Income approach which emphasizes earning-capacity of a enterprise should become the correct choice of China ,and makes a further study on the origin- features and feasibility of this method. Moreover, this paper discusses the feasibility of Option Pricing theory by adopting cases .On the one hand, it admits this method plays a key role in the realization of "debt-in -lieu-of -equity " of state-owned enterprises and appraising the value of potential earning-capacity ;on the other hand, it illustrates the application of Option Pricing theory in appraisal is still immature. For it can not meet the prerequisite of the theory; its result will not be generally accepted and the quality of appraisal staff are relatively lower, this method is not applicable to business valuation aiming at equity alteration .Thus it should not be regarded as a brand-new appraisal method to be promoted in the short run .In the finial the thesis forms its conclusion on method application of superseding cost method gradually .generalizing the use of Income method and developing the sense of using Option Pricing method .