Business Valuation Theory And Methods Of Research

With the establishment of market economy in our country, the modern enterprise system has been established gradually, property rights market continuously matures and enterprise-oriented the assets business develops quickly. It becomes clearly realized that, under condition of the market economy, the enterprise itself is also a kind of merchandise which can be appraised and sold on market. In recent years, the trade of enterprise right such as merger and acquisition, enterprise reshuffles, equity trade and venture capital investment, developed vigorously. Enterprise appraisal is the core of the transaction. Because of historic reason, the industry of assets evaluation started late in China, the theories and methods of assets evaluation have not been researched deeply. Enterprise valuation is the nodes of assets evaluation, but the research and application of it lags behind the western developed countries such as the USA. Firstly, main content and standpoints of the thesisThe first part discussed the enterprise value theory. This part, beginning with the basic concept of the enterprise, explains the concept of the enterprise with the economic theories of Marx, the classic economics and the enterprise theories. The author considers that the enterprise is a kind of special merchandise, and induces the characteristics of enterprise. On the basis, the author analyzes the connotation of the enterprise value with labor value theory of Marx, system theory and development standpoint. Finally, the author discusses the enterprise value in the meaning of the appraisal field, and points out that the enterprise value is market value.In the second part, the author discusses the theories of enterprise valuation. This part includes the purposes, assumptions, valuation types, principles and rules of the enterprise valuation .Particular purposes of enterprise valuation includes merger and acquisition, the enterprise sales, the share management, Chinese and Foreign joint venture cooperation, enterprise letting. The assumptions of enterprise valuation include the continuing operation assumption and public market assumption. The author divides the enterprise value into market value and the other value out of market value. The enterprise valuation principle includes the work principle and the economic principle. The economic principle induces the expected income principle, supply principle, contribution principle, substitution principle and valuation day principle. In the end of this part, the author discusses the rules of enterprise valuation.In the third part of the thesis, the author studies the methods of enterprise valuation systematically. The methods include the methods based on assets value, income method, market method and option method. The methods based on assets value include accounting value method, cost value method and liquidation value method.The income method has two levels: shares valuation and the whole of the enterprise valuation. The shares valuation includes discounted bonus model and discounted free cash flow of shares model. The whole of the enterprise valuation applies discounted firm free cash flow model. The author also discusses the parameters in the income method, including the high increasing period and the discounted rate. At the end of the part, the author studies a case in order to explain the application of income method.Market method is the sententious and effective appraisal method, and its result approaches to the market value closer. In this part, the author discusses two applications of the market method, one is comparable company analysis method and the other is comparable trade analysis method. Finally, the author emphasized to study the option method. There are two models which are studied in the thesis, one is appraisal model based on the growth option and the other is appraisal model of share value of deficit enterprise. Enterprise value includes not only the value acquired by traditional cash discounted method but also the opportunity value of...