Research On The Choice And Influence Factors Of Enterprise Evaluation Methods

With the expansion of capital market and the need of enterprise assets integration function, and basing on enterprise evaluation using its own professional methods providing fair value for the capital market, as a reference for the capital market pricing, enterprise evaluation has been widely used in mergers and acquisitions, big deals, listing applications, and some other trading behaviors, which has been a necessary procedure before transactions. While with the increasing of the enterprise value appraisal businesses and the expanding of the scope of services, more disputes appear in the process of enterprise value assessment, and enterprise evaluation report users propose higher and higher demands for the accuracy of enterprise evaluation. According appraisal principle, there have been three basic methods in enterprise evaluation practice:cost approach, income approach and market approach. The choice of different evaluation approaches directly affects the accuracy of the evaluation results, research on the influencing factor of enterprise valuation methods can not only improve the accuracy of the evaluation results, reduce the transaction costs of both parties, and promote the orderly development of Chinese capital market, but have a certain role on setting up enterprise valuation criteria, standardizing the behavior of the evaluation organ, providing policy advices to regulators.In order to study the influencing factors of enterprise valuation methods, the paper introduces systematically the enterprise valuation theory and the methods of enterprise valuation. And basing on 2011-2013 equity transactions of firms in Shenzhen Stock Exchange, the paper describes the present situation of the application of enterprise value assessment methods, analyzing that Assets Assessment Criteria-Enterprise Value having paid off, more assessment cases choosing two or more methods to evaluate, cases which choose cost approach inducing, cases which choose comprehensive results of two or more methods being few. And industry type, transaction type influencing the choice of enterprise valuation methods.To further empirically test the influencing factors of enterprise valuation methods, basing on whether trading entities are related parties, whether the transaction is a big deal, the type of industry, qualification of assessment agencies and characters of evaluation objects, the paper raises eight hypothesis, then using Binary Logistic Regression Model concludes:if a transaction belonging to the material assets reorganization, the type of the evaluation object belonging to "light asset" industry, the longer the established time of the appraisal institution, the longer the founded time of evaluation object, and the higher the rate of return on equity of evaluation object, they are more likely to choose income method; while when trading partners are related parties, the higher of the intangible assets ratio of evaluation object, they are more likely to choose cost method.Finally, basing on the research results above, the paper puts forward some policy suggestions such as giving great importance to the target of evaluation, strengthening supervision, clearing legal responsibility and regulating the behavior of appraisal institution. At last, the paper points its limitation and prospect.