The Research On Enterprise Valuation In Merger And Acquisition

With the development of globalization and Chinese economy, Merger & Acquisition (M & A) is becoming a more and more important way for enterprises'development. The requirement of the enterprise valuation for the target is becoming more and more exigent. The M & A enterprises are deepening their acquaintance of the valuation of target enterprises, and enterprise value is becoming a more and more important focus in the course of M & A.During the process of valuation, the enterprise is regarded as a business unit and its future exchange value is evaluated. This has become a very important direction for the development of the asset valuation industry. The concept of value is the base of deciding the method of valuation. In this paper, through the introduction of value theory, international market and the development of M & A in china, we discuss the theories, methods and practices of enterprise valuation.Since the Reform & Opening-up, China has developed prosperously for more than 20 years. The adjustment of industry structure is unavoidable. At the same time, enterprises are merging and acquiring frequently. In this situation, it is quite meaningful to study the valuation of M&A enterprises.In this paper, the study goes along the clue of"theories—methods—practical example". There are four parts in this paper:Part 1: An introduction the background and thoughts of the study and a brief introduction of Chinese and foreign theories of enterprise valuation.Part 2: we analyze the theories of M&A, and review the development course of M&A in international market and Chinese enterprises. At the end of this part, we emphasize the importance of enterprise valuation during M&A.Part 3: we focus on the theories and methods of valuation. Three major methods of appraisal are introduced as follows: the appraisal of asset bases, the appraisal of market approaches and the appraisal of income bases. Besides, we also introduce the methods of EVA and option pricing with their respective application fields.Part 4: we explain the method of valuation through a complex example. In the case, background and key competitive factors of enterprises are analyzed, and we use the method of DCF to evaluate the enterprise's value.