A Study On Valuation Assessment Methods In The M&A

Recently, mergers and acquisitions (M&A) of enterprises have developed quickly in China and have become a momentous part of our national economic development. Enterprises' M&A is a general of absorption mergers, instauration mergers and acquisitions. Accurate evaluation of the target enterprise is a key of success during M&A. Among which, one of the most important factor is to choose scientific and practical evaluation methods.There are shortcomings in the theory research and method tactics about M&A in China. So by virtue of the foreign M&A valuation assessment theory, the paper mainly discusses valuation assessment theory and methods in the M&A. The forms of enterprises' valuation include: book valuation, replacement valuation, market valuation, intrinsic valuation. The paper examines three major valuation methods in M&A, including-the assets valuation method, the income method and the market comparison method. Particularly, focusing on the classical analyzing model in the income method: the cash-flow discount model, this paper gives in-depth discussion of the application procedures for such model and the calculation of its inherent coefficients. Moreover, this paper tries to offer some suggestions for calculation of some key coefficients. Finally, the paper sets forth the questions existing in China1 M&A and needing perfect currently. At the same time, the paper introduces AHP in order the valuation system would be more adaptable for our national economic structure and environment.Moreover, in order to apply valuation theory, a case study would be done. In this case, the methods and approaches motioned above are employed to evaluate target company.