An Empirical Study On Forecast Of Significant M & A Revenue From Listed Companies

M&A has always been a hot economic transaction form in the capital markets. Assets evaluation becomes the core issue in merger, acquisition and reorganization of listed companies, since it is the independent third party of reference in providing the underlying asset valuation. Income approach is the most commonly used evaluation methods in our country enterprises’ value evaluation currently, so as its primary parameters, the accuracy of earnings’ prediction determines the objectivity and fairness of the target enterprise’s market value.This study intends to judge the degree of deviation between forecast earnings and the actual value based on the assessment data disclosed by 28 A shares listed companies’ significant cases of M&A in 2011, eventually puts forward improved model according to the problems existing in the present analysis. Firstly, this article reviewed income related theory in the enterprise valuation and the limitations of current methods briefly. Then this article analyzes the M&A cases in 2011 related to the listed company. On one hand, this article reflects the current state of the market evaluation objectively through the statistics of the type of M&A, the industry of M&A, choice of evaluation methods, income caliber and so on. On the other hand, this article analyzes three years of actual earnings of target companies after M&A, and explores its industrial and temporal characteristics. Then using empirical analysis to compare data of the future three years with the net profit to analyze the deviation between different industries and longitudinal each year and make an evaluation for the degree of deviation with the SFE, AFE and MAFE statistical index.Finally this paper arrives at the conclusion that the deflection exists in most of the revenue forecast in the M&A market of China and it becomes more and more serious with the predicting time stretched.Based on the existing problems of earnings forecast in China’s current industry benefit assessment, this article puts forward the new earnings forecast idea named the improved grey Markov model. And it proves its validity through examples, hoping to provide experience and reference to the evaluation practice and to reduce the subjectivity of income parameters, the error of evaluation results, finally helping enterprise management and outside investors or related interest groups to make optimal business decisions.