The Research Of Enterprise Value Assessment Based On FCFF Model About Bio Pharmaceutical Listing Corporation

With the increasing developing of China’s macro economy and the maturity of capitalmarket, around the capital market expansion, merger and reorganization of enterprisesexternal transactions of property rights and internal investment, financing all cannot dowithout the assessment of enterprise value. Value evaluation reveals the value creating abilityand the way of the company, it has become an important research and application field offinancial investment, financial content, etc. It provides an important basis for investmentanalysis, strategic analysis and value management. At the same time, due to the "cash is king"ideas win support among the people, free cash flow has become an important target tomeasure the value of the enterprise. Discount free cash flow model occupies a dominantposition in the value assessment. Therefore, from the angle of free cash flow to study thevalue of the enterprise has become the focus of scholars.In recent years, along with the promoting of the science and technology and reform andimprovement of the level of China’s medical system, the important position of biopharmaceutical industry in the national economy is obvious. As a supported industry that haskey relationship beneficial to the people’s livelihood, it has gradually become China’s neweconomic point of growth and investment focus. For bio pharmaceutical enterprises in Chinaespecially the listing Corporation, research on the evaluation of the enterprise value plays animportant role and significance to improve the management, the smooth realization ofinterests of different subjects and keep the benign development of the pharmaceuticalindustry.This paper is taking this as the breakthrough point, analyzes the related theory. Firstly,this paper summarized the domestic and foreign scholars in this field of research to clearwriting purpose and significance. Secondly, this article conducted in-depth analysis ofenterprise value assessment theory and free cash flow theory, introduced the evaluationprinciple of free cash flow model. Thirdly, this paper described the characteristics ofbiological medicine industry and selected33companies listed on the Shanghai and ShenzhenA shares biological pharmaceutical company as the research object to do empirical analysis,then evaluated the listing Corporation and enterprise value model with free cash flow,analysis correlation between intrinsic value and stock price. The results show that the intrinsicvalue of the enterprise which got from assessment model based on free cash flow and stock isnot entirely consistent, but they have a high degree of correlation, this result confirmed theapplication of the model to evaluate the value of biological pharmaceutical listing Corporation.Finally, analysis on the main influencing factors of the model according to the results andselect the relevant indicators, then use SPSS17.0statistical software to conduct principal component analysis. According to the principal component scores and ranking will samplefirms are divided into4categories. Then we put forward the suggestions and Strategies ofpromoting enterprise value to provide reference and basis for improving methods andenterprise in order to evaluate this kind of listing corporation enterprise value, to provide areference for investors to make the right investment decisions, to promote the sustained,healthy, stable development of bio pharmaceutical industry.