The Empirical Research Of Residual Income Valuation Model

Enterprise value assessment plays a very important role in enterprise management decision. To evaluate the enterprise value appropriately and effectively is the core content of enterprise value evaluation. In our country, the enterprise value assessment started relatively late. To evaluate enterprise value fairly is difficult. Our enterprise value assessment methods are mainly the cost approach, market approach and income approach. The existing valuation models ignore a lot of valuable accounting information. With the residual income model putting forward, it has received widespread attention. Combined with accounting ratios, RIR integrate residual income pricing models and DuPont analysis system which has more objectivity and verifiability. This paper analyzes the limitations of current valuation methods and the superiority of the residual income model. In order to avoid the particularity of a single sample with the current accounting standards, this paper use financial data of Shenzhen motherboard listed companies from the year 2007 to 2013.Though analyzing the correlation between RIR model and net assets and price, it come to the conclusion that the residual income model has strong explanatory power for the value of the stock. According to industry classification, compare the residual income and net assets of different industries and the correlation of share price. In the empirical part added the trend analysis, using the residual income model to calculate the enterprise value and the trend of stock price. This paper provide rational reference basis for exploring enterprise real value.