Research On Non-listed Company’s Equity Value Evaluation

In the period of "Post Financial Crisis Era", although the global economic situation has been gradually warming, but countries in order to alleviate the negative effects of "Great Recession", must be actively looking for new economic growth point. Both domestic companies and foreign economic entities consistently looking for the new approach to strategic transformation. Under this trend, enterprises in all countries, especially involving the non-listed companies mergers, acquisitions and other equity trading activities are increasingly frequent. At the same time, due to the traditional way of financing has been unable to meet their growth, the non-listed enterprises have to constantly explore new financing channels to seek their own development. Since 2013, the "National Equities Exchange and Quotations" began to accept enterprises listed on the application across the country. It is also known as the "New Three Board", which is designed for non-listed joint-stock company’s trading platform. Research related to the enterprise value has become a discussion focus in the industry. The study of enterprise value evaluation issue has attracted the attention of scholars, and the research of non-listed company’s equity value evaluation is closely connected with equity transaction practices.Due to the appraiser may not accurately understand the theory of enterprise value, thus the appraisal institution cannot effectively using evaluation method in practice activities. This makes the appraisal institutions inevitably produces many defects in the valuation process. Such as, the inaccurate selection of assessment method, subjective and incomplete adjustment of parameter, etc. This shall be the value of information users provide services which makes the conclusions of valuation in the service of the principal decision-making agents, so that they cannot play its proper role.This research mainly revolves around YD accounting firm’s equity value evaluation practice. On the basis of observes YD firm’s un-listed company equity evaluations activities, focuses on the problems existing in the evaluation method selection and parameter adjustment. By analyzing the enterprise value, the value of equity, non-listed company’s equity value assessment and other related concepts, to establish theoretical system of the enterprise value. Constantly looking for suitable for the working method of valuation practice in our country, guided by the scientific and complete theoretical system.In summing up the viewpoint of the theory of scholars both at home and abroad and on the basis of research results, we found that western scholars for the study of the enterprise value has a long history, and their method of system is more perfect. Domestic scholars on the basis of summarizing the theory and practice of western experience, are gradually building enterprise valuation theory system suitable for the environment of our own country. But the theoretical research specific to non-listed company’s equity value characteristics is not comprehensive, and the effect of existing value evaluation model in the actual application is not ideal in actually application.According to YD firm’s annual business income in the year of 2014, equity value assessment projects involved in un-listed companies has reached 30% of total revenue, and later still have rising trend and space. The result of equity valuation project has a widely use, involving the transfer of shares, the transfer of equity pledge value, enterprise restructuring, consulting and other economic activities. This kind of valuation project according to different purpose chose a variety of evaluation methods, which contains three basic enterprise value assessment methods:market method, income method, and asset based method. But the choice of specific project valuation method is single, and not reasonably reflect the characteristics of the project. At the same time and through the administrative supervision, China Appraisal Society found that appraisal institution easily affected by the client or other stakeholders in the process of practice, and manipulation of the assessment conclusion for excess profit.Based on the analysis of three basic value evaluation methods in YD firm’s practice the application, reconstructed the more rational, more standardized comprehensive value evaluation of business process. In order to raise the accuracy of YD firm’s project results in evaluation practices. This research is more comprehensive and has more guiding significance to YD firm’s assessment practices than ever. The previous studies focus on the theory of valuation method and partial blame YD firm valuations are inaccurate because the unsound internal control.In this paper, author on the basis of the daily work of study, introduces the case of YD firm’s project about non-listed companies’ equity valuation in three different approaches. On this basis, combed the intermediary institutions’ business processes of equity value assessment project to a certain extent. The study found that in order to choice the scientific, reasonable, rigorous assessment method, you need to define the enterprise value and the value of equity in a different context first. Not only that, the specific assessment procedures also has a great influence on the accuracy of the valuation conclusion.The research scope of this paper includes not only the advanced scientific valuation methods, discussion of valuation technical, but also YD firm business process evaluation practice, assessment procedures discussion. The author through the study found that factors influence on the effectiveness of non-listed company’s equity value valuation conclusion is not simple, but by the theory and the practice operation on the theory of these two aspects.On the basis of solving YD firm’s valuation problems, combined with analysis of the YD firm risk control, business process. We found that optimization of related business rules will make valuation conclusion more availability. The detailed study of practical work will constantly improve equity valuation practice experience of the project. This dissertation will be of some help to provide reference value for Chinese un-listed company valuation activities, service practice work better and meet the demand of increasingly diversified economy.The scope of this study are limited to the discussion of the YD office practice, cannot fully cover equity evaluation projects in the practical work of all. But it still has a certain reference value to the similar research with YD firm’s practice projects, especially for the transfer of shares, the transfer of equity pledge behavior such as involving private company in terms of equity value appraisal business.