Research On The Application Of Company Value Valuation

Since the 19th century, unprecedented material civilization has been created. The market economy develops at very fast speed and the economic globalization is the ultimate trend of economic development. Our country complies with this historical trend actively. With the development of the security market, the enterprise's value evaluation has become more and more important. Investors in the market should have a proper enterprise research system to guide his decisions, instead of just following other people's suggestions, then anticipating the whole market's trend.In the first part, the background and signification of this thesis are being described, and the research method is outlined.In the second part, discounted cash flow valuation method, market value method, economic value added valuation method and real option valuation method are expatiated, the advantages and disadvantages of which are analyzed.In the third part, based on the analysis of these four valuation methods, a system of enterprise research is brought forward. First, select a promising company; then, pick a proper buying point; last, buy it and hold it long enough. There are several standards when choosing the potential companies, the purpose of which is to reduce the risk elements of evaluation modal, therefore, get an accurate result and make a sound decision. Under these criteria, investors should choose companies which have simply and understandable business with steady and growing history. Besides, the company must be competitive and unique for client. It should own a band of devoting, honest and intellect managers. To make sure that the business is competitive and have enough anti-risk ability, we use the index of Operating Profit Margin. In order to measure the manager's capability, we use Return on Shareholder's Equity. To assess whether they had made the most of Retained Earnings, we'd better use the mount of book value and market value. If all the above requirements are being met, it may be possibly promising enterprise. But to make the investing decision sound one, investors should buy it at an appropriate point. To do this, they should evaluate their inherent value. Only when there is abundant margin between inherent and market value, should investors get in.In the discounted cash flow valuation method, we put forward the concept of Shareholder Value Added, which can really measure shareholders'value.Fourthly, Pepsi is analyzed and evaluated according to the above method as a practical guidance of the usage of it.The conclusion is that there are no such things as absolutely sound evaluation modals. There is just a compatible one.