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

With the constant develop in the market of property right and the establishment of modern enterprise system, being the theoretical basis of value management, theories and methods in value assessing are becoming hot topics and drawing more and more attentions from the people. Enterprise valuation is a fast developing field of the current international evaluation industry. Many governments and scholars pay more attentions to the correctly evaluation.About enterprise valuation, there were many concerning researches have been conducted in the west, in the western developed countries represented by USA, have done profound research on value assessment theory and established relatively ideal assessment system, in China, being a country has experienced a long period of planned economy, both the proposition and the application of enterprise value were relatively late and the accumulation of modern managerial theories was limited, researches on enterprise value assessing, both theoretically and practically, lagged behind relatively. But with further development of securities market and property right market in our country, the demand for enterprise valuation is also on the rise around all circles of the society.Because free cash flow includes information of balance sheet profit and loss statement and cash flow statement, it can reflect the value-creating ability of the company and be an important parameter of enterprise valuation. The article based on the concerning classical theories, has discussed some popular enterprise value assessment approaches. After comparative analysis, I draw the conclusion that free cash flow discount approach is mostly fit our country enterprise's current situation. Moreover, I exhaustively introduce free cash flow discount approach of application, depended on the performance of Chinese enterprises and capital markets, took listed companies as the object, try to choose a system suitable for enterprise value assessing in China after the practical analyses on the fitness of FCF to Chinese capital market.