Research On Enterprise's Value Assessment

In Chinese opening finance market, M&A between corporations have happened more and more often. How to price the stock, the debt, the share of the corporate or the whole of the corporate has been an important issue.In the course of study, this dissertation discusses the value of enterprise, the theory of the enterprise's value assessment, the approach of the enterprise's value assessment, the application of the approach of enterprise's value assessment in sequence. It is divided into 4 parts to describe and analyze the corresponding problem, as well as put forward author's view. Firstly, the author analyses the character of enterprise and the composition of enterprise value, then expounds the essence of enterprise value in the view of economics and finance. The conclusion is that enterprise value essentially refers to the whole value of enterprises in the real market. On this basis, the article discusses three kinds of enterprise's value assessment method commonly used (cost approach, income approach and market approach) at present in our country, probes into and analyses the advantages and disadvantages of various kinds of enterprise's value assessment method, applicable condition and the calculation of assessment coefficient. And then expounds an advanced model called free cash flow model. Free cash flow is created from enterprises operation activities, and it is better than profit and cash flow to evaluate the performance and investment of the enterprise. It can describe effectively long-term development of enterprises based on its value-making ability. According to the common finance theory, enterprises'value equals to the sum of cash flow in the future at proper discount rate. In the forth part, the dissertation set an example in order to made the free cash flow model clear.Based on previous researches, this paper analyses and summarizes the theory and approach of primary enterprise's value assessment, and proposes some own views,finally tries to use discount-cash-flow model to assess enterprises'value.