DCF Model Application In Retailing Enterprise M&A Valuation

Along with the gradually open of China's Retail Market, the competition of China's retailing industry will become more and more intensive. The expansion method will also change from direct investment on new stores to merge and acquisition national retailing business enterprises. The choice of scientific valuation model has been the crucial step in the process of enterprise evaluation.Due to the long-term planned economy system, the study on enterprise valuation model relatively draggles in China. We usually reference the study result of the foreign country on the valuation model. However, the key valuation method is still the traditional evaluation way on the basis of historical data in practice. The main model used in valuating enterprise value is DCF model in international practice.Based on the classic theory of enterprise valuation, the paper summarize the basic valuation model, especially the theory and application condition of DCF model, combined with the development of retailing business, the paper further analyze and discuss the application of DCF model in retailing enterprise Merger & Acquisition, finally forward some issues to be noted in the application.The whole paper divided by four chapters. The first chapter reviews the current study status of enterprise valuation theory. The second chapter introduces the concept of enterprise value, which focuses on the DCF model. Starting from the actual development of retailing, the third chapter analyzes the choice of DCF method and gives some comments on the Merger & Acquisition pricing. In the case of W & H company, the forth chapter see through the application process and forward the some suggestion.