From The Enterprise Value Management Perspective On The Valuation Method

Since 1980s, with the development in finance economics, many excellent enterprises of industrial developed countries in the west have entered fiance-leading period. That means the theory about enterprises' value has become the core of the enterprises' management theory and the financial valuation method has become a center of the enterprises' management technique. Managers in the enterprises realize that they need manage value, and they pay more attention to the value the company and the operating strategy create. It can be said that knowledge of value is what all economy and managing actions depend on, while the knowledge and understanding about valuation and the skill in using it to lead the enterprises' management decision are bases the enterprises succeed in the strong competition.As modern financial theories are concerned, the valuation of an enterprise is to valuate its inherent value that has close relations to its future increase. So the method most answers for value theory and concept is the cash flow-discounted method, and it is discussed in my paper. The measurement and management of company value has got relatively complete and embedded research at abroad but is a new subject in our country. The paper tries to probe into the problems about the skills of enterprise valuating and value managing, including the methods themselves and their usage.The paper constitutes 3 parts and the main contents of each part are as follow:Part 1: Basic theory of enterprise valuating and value managing1. State and compare the concepts of value and analyze the factors affect enterprise value. Discuss that the object of financial management should be maximizing the enterprise value.2 . Explain meaning of value managing and discuss its sense and implementation hi enterprise.3. State the principle methods of valuation and their comparison. Summarize the development and applications of valuation. Dissertate the relations between valuating and value managing.Part 2: Analysis in the cash flow-discounted method of enterprise valuating fitfor value management1. Summarize the principles of the "cash flow-discounted model" and the two elements of the model.2. State the characters of cash flow. And discuss the ways to decide cash flow under different models from vary point of views.3. Discuss first the meaning of discount rate and then way to decide it.Part 3: Problems and their solutions about application of cash-discounted model1. Analyze possible conditions the cash flow-discounted method is needed in enterprise and manner to apply it.2. Probe into how the cash flow-discounted method and the present finance report system agree with and the improvement measure.3. Probe into the problems met when the cash flow-discounted method is applied to such special situations as seasonal industries and high new technology enterprises. And propose how to deal with them.