Application Research On Market Approach Valuation In Enterprise

Enterprise valuation has become a hot topic in asset appraisal profession in recent years, and with the gradual progress of China’s economic reform, mergers, alliances, joint-stock reform, property rights transactions between enterprises inevitably shows the depth and internationalization trends. One of the important methods of the market approach valuation method is bound to get a wide range of applications. In this paper, the specific case, demonstrates a market approach in assessment practice, trying to further solve the problem in the theory and practice.In this paper, the theoretical analysis and case analysis method of combining the basic theory of the market approach and its application in reality some useful exploration. The article as a starting point the basic concept of the market approach to enterprise valuation method, from a different perspective on the understanding of the enterprise value of a different view of the enterprise value is reviewed, understanding the nature of the enterprise value. Second, the definition of the exchange from the market point of view of enterprise value assessment, that the valuation of the enterprise for the purpose of investment decisions and market exchange. Again, the market assessment of the law principle, the prerequisite of the application market analysis and elaboration. Finally, the article describes the comparison method of the listed companies in the market approach and trading case comparison method the basic idea of the two methods and evaluation procedures.In China’s overall status and the status quo of departure from the market approach in the application of systems analysis and in-depth research of the market approach. Overall, the market approach as a convenient and compelling, low-cost enterprise valuation method, gradually improve the development of China’s securities market and the equity market has been applied. However, in specific applications, due to the lack of the effectiveness of the domestic market, as well as more subjective judgment of the market approach to assess their own reasons Markets Act still exist in the specific application of this or that problem. Markets Act Chapter described three typical model is to be applied in practice to do a detailed introduction.Chapter IV of the article under Chapter from the market approach in the application of the general and specific status quo summarized market facing application and typical problems summarized as difficult to choose comparable enterprise value ratio selected is not appropriate, the constructed value ratio caliber inconsistent, major and typical problems facing lack of liquidity discount, as well as assessment of the controlling stake premium market approach assessment, and supplemented by case described. The second part of the fourth chapter focus problem cause analysis, that the capital market is imperfect, inadequate information disclosure is difficult to select the important reasons of comparable enterprises; practices the lack of an effective market approach is the cause evaluators in the selection is not appropriate to value ratio, constructed value ratio caliber inconsistencies and other issues important reason; professional evaluators and Corporate Valuation comprehensive complexity makes, such as lack of liquidity discount as well as a controlling stake premium special problems.In the analysis of the problems faced by the market in specific application process and why. In this paper, the fifth chapter of the problems faced in the application of the market approach beneficial Solutions. First, it is necessary to establish an effective capital market, accelerate the construction of multi-level capital market to improve the information disclosure platform; countermeasures select appropriate comparable companies, comprehensive comparative factors combined summarized graphically comparable choice path, and should also be adjusted for comparable enterprises and enterprises are assessed differences; Third, for the lack of market law practices for this reason, this paper application value ratios of Chinese and foreign assessments from the scope, and the use of scientific methods to expand the scope of value indicators select normative value indicators of value indicators correction and so on to the market approach further specification of the option value indicators; integration and comparison of domestic and foreign lack of liquidity discount model and method that at this stage of China’s market, due to the smaller number of potential investors, there is a huge difference in the bargaining power of buyers and sellers, the final transaction price the liquidity discount calculation often used seller model calculation the discount ceiling, so split share structure reform/option model to estimate the liquidity discount on the valuation of non-listed companies in China has a broad meaning. This paper the model was introduced in detail, and the case illustrates the specific use of the model. Not just calling for attention, to pay attention to, but according to the purpose of the evaluation, the value of the type, as well as factors such as the availability of data considering to propose a specific approach for enterprise value assessment involves the lack of liquidity discount and a controlling stake in the premium rate.