| Enterprise as an important part of the social economy operating, have being seeking for its goal since it was born. Maximum Enterprise Value as the object of enterprise finance management has been recognized by both theoretical field and practice fields. Therefore how to evaluate an enterprise was concerned. From the present situation of foreign research, we can find that the west finance theoretical field has a lot research on the evaluation of enterprise. The theoretical research about evaluation of enterprise in west developed country has been matured at present, and they have establish the evaluation system. As the developing of our capital market, purchase or merger of enterprise, and asset reorganization increasing, enterprise as a special kind of good for transaction caught the attention of people. How to evaluate a fair value of enterprise for the transaction became a key point to our capital market.On this demand, this paper will research on the related theory, method, and especially the evaluation model of Free Cash Flow. Because discount of FCF model including the long-time development of enterprise and the time value of cash. The progress of evaluation can point out how to increase the value of enterprise, the discount of FCF model is the best method for the evaluation of enterprise. Based on the definition and calculate, this paper further perfects the Evaluation of enterprise value based on free cash flow, and makes a case study of Evaluation of enterprise value based on free cash flow, using the material of Midea Company. The paper analyses the impact of this method to the management of enterprise, points out ways to improve the value-based management; the paper also analyses the condition for the use of discount Free Cash Flow model enterprise evaluation. The paper insists that as the development of our capital market and accounting disclosure, the Evaluation of enterprise value based on free cash flow will be used extensively in our country. |
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