The Research On Enterprise's Value Assessment Approach Based On Free Cash Flow

With the constant develop in the market of property right and the establishment of modern enterprise system, it becomes increasingly known that in market economy an enterprise as merchandise producer is also a kind of merchandise, which can be appraised and sold on market. The quick development of modern capital market has greatly promoted the flow of enterprise resource between different owners. In recent years, the trade of property right such as merger and acquisition, enterprise reshuffles, equity trade, venture capital investment, is visgorously developed. Enterprise appraisal is the core of the transaction.As the same time, since the eighties of the 20th century, the goal of modern corporate financial management has already changed from pursuing utmost profits and owners' wealth to utmost corporate value. Therefore, how to know corporate value and how to evaluate corporate value are not only the responsibility of appraisers, but also the consideration of investors, the authorities of business management and investment consulting organizations.This dissertation launches according to enterprise's value- the logic thinking of enterprise's value assessment - enterprise's value assessment approach - application of enterprise's value assessment approach in the course of studying, dividing 4 parts recommend, analyse the corresponding problem, put forward owner's view. The author analyses the nature of enterprise and the composition of enterprises value, think enterprise's efficiency should reflect on the maximum of enterprise value at first Then summed up the origin of enterprise's value assessment thought: The financial budget theory of Irving Fisher and the value assessment theories of Modigliani and Miller. Among them Modigliani and Miller first introduced the uncertain condition into enterprise's value assessment theoretical system, and had proposed the definition of enterprise's value and enterprise's value assessment method scientifically, they think enterprise vaiue mean the sum of discount value, business activities of cash flow of their assets. On the basis, the article has begun the discussion of enterprise's value assessment approaches. After comparative analysis, I draw the conclusion that free cash flow discount approach is mostly fit for our country enterprise's current situation, the accounting criterion of cour country has been used to discuss its concrete parameter, andI have given the suggestion on the adjustment of its parameter. Finally the author exhaustively introduces free cash flow discount approach of application, and analyses the real example of the listed company in our country finally for freedom cash flow method suitability.