Research On Business Valuation For Target Enterprise D Pharmaceutical Co. In M&A

With the establishment of modern enterprise system and the continuousdevelopment of the property market, enterprise itself is also a commodity, which canbe traded in the market valuation. The rapid development of modern capital markethas greatly promoted the flow of enterprise resource between different owners.Therefore, the enterprise mergers and acquisitions, restructuring, equity trading, riskinvestment and property right trading activities to flourish, and business evaluationhas become the core issue of property rights transaction. How to better understand theconnotation of enterprise value, what are the factors affecting pricing, in practice,what kind of value evaluation method is used to obtain credible enterprise valueassessment, is always a problem of theory and practice concerned. So businessevaluation for target enterprise in M&A at present has practical guiding significance.This article is striving to reasonably and effectively use the existing evaluationtheory to M&A practice, thereby exploring a business valuation theory and method inM&A, as a guide to make a contribution to the business evaluation in China. Thispaper briefly expounds the relevant theories of M&A and value evaluation, analyzesthe influence factors of enterprise value assessment, the three basic methods forassessing the enterprise value, namely, cost method, market method and incomemethod, and analyzes the business evaluation methods in M&A. Then with A bigpharmacy acquiring D pharmaceutical co. as an example, this paper introduces themerger case background, and the related factors that affect business evaluation suchas the macro environment, industry mergers and acquisitions party status,management, and financial situation and M&A motivation analysis, it is concludedthat selecting value assessment of target enterprise income method is moreappropriate. And then through selecting evaluation model, discounted cash flowmodel, evaluation parameters, using the method of income approach assess the valueof target company D pharmaceutical co., and make a conclusion for validation andanalysis. Finally, suggestions for improving the business valuation system in M&Aand further study in business valuation is made.