The Relevance Between Enterprise Value And Its Growth

The value enhancement of enterprise is the most basic goal of the modern enterprise management. With the depth of people’s awareness of the value, research on the enterprise value is becoming a major task of concern. Existing studies mostly concentrate on unilateral research on the enterprise value or growth, but few studies integrate the two together and try to explore the relationship between them. In this paper, growth and enterprise value is combined and the relationship between the two is explored and demonstrated. It’s the innovation of this paper. From the perspective of growth, the paper provides not only-reference for investors to understand the SME value, but also a new perspective to the field of business valuation.The purpose of this study is to explore the relationship between corporate value and growth, using the SME board listed companies as the object of study. The framework of this paper is as follows. Firstly, based on the review of the literature of corporate value and growth at home and abroad, a detailed introduction of the theory of value and growth has been made respectively by using the method of normative analysis, which lay the foundation for the next part. Secondly, the meaning of enterprise value and its influencing factors have been discussed, which enlightens this article to carry out further research on the relationship between enterprise value and growth which is one of the influencing factors. To this end, detailed analyses have been made, which include the meaning of growth, its features and relative factors. Based on the analyses made before, eight characterization indicators of business growth have been put forward. In summary, this part is the main body of the article because of its illustration of the relationship between corporate value and growth. Finally, by using empirical research method, such as correlation analysis and multiple linear regression method, and analyzing empirical results, we come to the conclusions that growth factors and enterprise value correlated.Due to the limitation of knowledge, there are some inadequacies in the study, mainly for the following points:Firstly, only select cross-section data for2010as a research data and lack of dynamic analysis of growth trends. So the conclusion of this article cannot be used to determine the enterprise value, and judgment related issues still need further study. Secondly, the empirical part of this article only analyzes the financial indicators of growth, as to other characterization of growth, such as non-financial indicators, this paper only give a brief overview of them and they are not included in the empirical analysis, which may make the indicators of growth not fully. Finally, due to the lack of systematic pricing theory on the stock market in China’s transition economy, there is a certain degree of subjectivity in the selection of enterprise value variable. In view of the conclusions and the inadequacies in this article, further study may take the following two aspects into consideration. One is to conduct dynamic analysis of growth trends and do further research to determine the enterprise value. The other one is to quantify non-financial growth indicators in order to fully characterize the growth.