Study On The Valuation Of Retail Chain Enterprises

In recent years, the chain operation in China has achieved a great development, the size of the chain is growing rapidly, and the retail chain has already developed into a pillar industry of the socio-economic. Although the time of retail chain enterprises’development is not long in our country, but it has gradually become a main force of China’s retail business. The rapid development trend of the retail chain does not only bring more opportunities, it also faces greater challenges. To retail chain enterprises, how to seize the opportunity to grow and make profit, and to investors, how to make right choices, they all make the study of the valuation is particularly important for chain retail enterprises. Because the correct results of the valuation not only play a vital role for corporate finance, but also is very important to investment and day-to-day operations. What’s more, the study of valuation can make the management have a correct understanding of formations and factors of a enterprise value, which can help them to improve enterprise management.At present, we have already made a thorough study for general corporate valuation, but there rarely have much research on the valuation of the retail chain enterprises. As a bridge between consumers and manufacturers, chain retail enterprises have a great industry particularity in operation, The source and formation pathway itself has a certain degree of particularity. However, among the current valuation methods and model, there is no independent method which is fully applicable to the valuation of the retail chain enterprises, so in reality, there is an urgent need for the suitable valuation methods to ensure the accuracy of the valuation for this kind of enterprises which have their own distinctive features, it can also help to enhance enterprise value.This paper adopt research method and use Suning as a starting point for a typical representative of the retail chain enterprises in China to find their unique compared to other companies on the sources and formation of value, then recommend Discounted Cash Flow Technique and Real Option Method to asses different value from different way. What’s more, during the process of setting models and chosing parameters, we can further verify the factors that affect the value of the retail chain enterprises, and make recommendations for enterprises’ development and the enhance of value.This article consists of the following seven parts:The first part is introduction, which introduces the background and significance of this paper, and some related literature review. The second part introduces the basic principles of business valuation. This part is intended to provide a theoretical basis for the below valuation of retail chain enterprise. The third part is using the development process of Suning Appliance as a starting point to explore the developing and value characteristics of the retail chain enterprise, which can pave the way for the below to chose the appropriate valuation methods. The forth part mainly bases on third part which find the way of value formation of the retail chain enterprises, and then analyze the applicability of diffident traditional assessment methods. The main point of the fifth part is to find the suitable valuation method for the retail chain enterprises from the technical level, asset ssessment model and select the relevant parameters, and then analyze the factors that affect enterprise value through the process of establish assessment model and the selection of parameters, which can be used to analysis of the factors that affect value. The sixth part is the association of ideas of this study, which is mainly make recommendations for the retail chain enterprises to improve business decision-making for the purpose of enhancing corporate value. The final part is the conclusion of the whole paper.