Research On The Application Of Market Approach In Business Valuation

With the acceleration of the globalization and the development of capitalmarket,enterprise resource flows occurred frequently such as enterprise merger,reorganizationand so on, to evaluate the enterprise value has become a hot spot, the nature of assessmentmethods in the study are more necessary.Now in China the assessment generally has threekinds, respectively is the cost method, income method, market method, usage is probablymore than ninety percent of cost method, income method with less market law, basic neednot,however, to assess the market method is the western developed country enterprise value isthe most common method.There are many reasons for this situation, for example, our capitalmarket is not perfect, value ratio is inaccurate and so on, the paper makes a detailed analysisof its causes.The purpose of this study is the important role by analyzing the market approachin business valuation, and further analysis of the evaluation process and evaluation methods,hope for the application of promoting the market value method, make the necessarycontributions to broaden the application of the market approach.Many scholars of China in recent years, the market of applications in the evaluation ofenterprises, have to study are not suitable for it, on the non applicability of the analysis of thecause, of course, a lot of the article puts forward some suggestions, namely how to improveChina’s market environment and the we use the premise is more close to the market, so themarket get more extensive application in the evaluation of enterprise value.This paper is based on the concept of market approach in business valuation, illustratesthe evaluation principle of market enterprise value assessment method, and the prerequisite ofthe method and the key parameters are analyzed in the paper.Then, the overall situation ofenterprise value assessment in the application market of three value ratio model commonlyused in the evaluation (model, P/E ratio City pin rate model, city net rate model) arediscussed the specific application situation. Finally, the two chapter for why China’s use ofmarket method is understood in detail, and the corresponding countermeasures were putforward. The focus of this chapter is the analysis of application status in China, are not widelyused to describe the reasons and puts forward suggestions for improvement. The three part ofthe application from the market method in the evaluation of enterprise value of external environment and internal technical level in the application level are analyzed.I believe that as long as we learn from foreign enterprise value appraisal theory andpractical experience, and according to the actual situation Chinese enterprises to continue tobe enriched and developed, with the continuous improvement of the economic developmentof China external environment, value evaluation method Chinese enterprises will increasinglyimprove, application prospect will be more and more broad market method.