Business Value Analysis Based On Asset Quality

As modern enterprise mergers, restructuring, strategic investments, equity transactionsare occurring,"enterprise value maximization" has become the pursuit of strategic objectives.Under the goal of maximizing corporate value, the fundamental motivation for businessdecisions is whether to increase corporate value. The assets are the basis for the developmentof enterprises to survive. It is the cornerstone of the enterprise to obtain material benefits. Itsquality will not only reflect the current state of existence enterprises, affecting the futuredevelopment potential of enterprises, but also determines the value of the business. Sothrough the asset quality perspective we can deepen understanding of the value of theenterprise, more effective to provide accurate and valuable data for investors. The real estateindustry is a pillar industry of the national economy related to the vital interests of the people.Development of real estate industry will drive the development of such industries as finance,construction, social services. The real estate industry is a typical capital-intensive industry,itself has a long operating cycle, capital-intensive, highly related industries, the risk of largeprojects, policy guidance, and other characteristics. Many factors affecting the real estateindustry and good control of operating conditions. Only with high-quality assets to improveprofitability, risk-resisting ability of enterprises, so as to enhance corporate value, enablingbusinesses to remain invincible in a complex business environment.This paper first reviews the literature about corporate value and asset quality,summarized asset quality relationships with corporate value. From the analysis of theprofitability of the enterprise value, operational capabilities and perspectives asset structure inthree areas. Then chose all the A shares in the real estate industry enterprises for the study. Bymultiple linear regression analysis of selected ROE, book value, total asset turnover ratio,current ratio, the ratio of debts to assets, the equity ratio six enterprise value associated with asignificant asset quality indicators. Through principal component analysis for the real estateindustry financial statement data, with six representatives of the enterprise value of thefinancial indicators of asset quality can build enterprise value evaluation model. By calculating the enterprise value ratings also measure the size of the enterprise value. Finallythrough regression analysis of enterprise value evaluation index and shares, verified thevalidity of enterprise value evaluation model.Through the establishment of enterprise value evaluation model, and Vanke empiricalanalysis, the results showed that:(1)Asset quality will affect the level of corporate value.Assets from profitability, turnover, solvency and structured in four areas of significant impacton the size of the enterprise value.(2) Through principal component analysis and Tobin’s Qtest can be seen that the value of the asset structure of the most significant business impact.(3)Enterprise value is determined by the size of a company’s share price high and low. Researchof enterprise value size can effectively determine whether the price is reasonable.Finally this article from a different perspective to improve enterprise value put forwardreasonable proposals: Investors should pay attention to the quality of enterprise assets,analysis of enterprise value. Managers should focus on improving return on assets,maintainappropriate operational efficiency, optimizing enterprise assets structure, and constantlyimprove our corporate value.