The Sensitive Analysis Of Power Company’s Evaluation

Since2013, the economic of China has been recovering. Electronic power industrycan be the reflection of Chinese economic. It is clear that there are significantcontributions to Chinese economic through the analysis of power companies. Themajority of power companies were in debt in2012. After then, most power companieshas increasingly gaining profit since2013, especially thermal power companies. Thereason of that may be the low fuel cost as the value of electricity and coal has declinedsince2011. Therefore, some thermal companies issued more stocks for financing.Furthermore, some assessment institutions estimate the value of some Chinese thermalpower enterprises. The examples in this article are collected from an evaluation casestudy that the author took in2013.According to the situation of property appraised at present, value assessment is notas a tool between the enterprises’ transactions, but the way to enhance the value andperfect the management system of enterprise. Due to many causes, in practice, theenterprise does not make the evaluation maximizing. In cording to the methods, powerenterprise will be more willing to accept the result of cost approach, income approach isa auxiliary method used to verify the result of cost method. A part of the reason for this isthe enterprise’s discussion on capital rating still focus on the book value, the more capitalfund, the more valuable those enterprises. It not only ignores the value of intangibleassets, but also can’t give help to enterprises’ management. Using income approach. It’sbetter reflect the value of power enterprise by using income approach. Another reason isusing income approach have too much uncertainty. For example, the difficulty ofpredicting the cost of power and the cost of coal is instable and coal is the main cost ofthe thermal power enterprises. The thermal power enterprises are sensitive to theseunstable factor, this contain the enterprise, even bring big risk. What’s more, this affectthe accuracy of evaluation result. Sensitivity Analysis Method is used to analysis the riskand indetermination. However the asset appraisal qualifications didn’t stipulate thatSensitivity Analysis Method must be used. So the asset appraisal institution only use it inthe requirement of enterprise.This article is based on A enterprise, income approach was used in this case.Then from the angle of quantitative analysis, by means of Sensitivity analysis to analyzeuncertainty in the capital rating, in order to improve the accuracy and scientificity ofevaluation results, and bring some enlightenment for enterprise’s management.