Research On Evaluation Of E-commerce Enterprise Value

With the improvement of the IT technology and the development of internet economy, e-commerce enterprise appeared since 1990 s, growth rapidly. Electricity business model is also gradually evolved from ABC B2 B to O2 O B2C and other multiple types. During the past decade, not only the common e-commerce enterprises seize the opportunity such as JD and Taobao, traditional enterprises also have a chance to change the operational pattern by using internet. These companies break through the trading model and use new ideal and technology, new business model has established which helps the company increase the sales revenue together with the growth of market share. As a result, mergers, acquisitions and integration become common. For example, Di Di integrates with Kuai Di, Alibaba cooperate with Suning, Jing Dong becomes a shareholder of Yong Hui. As the competition among e-commerce enterprise become intensive, a question has been widely discussed by academic experts, which is the method to evaluate the e-commerce enterprise’s value.With the proposal of “Internet+”, more and more business entities become e-commerce enterprise, and traditional business valuation methods show their shortcomings. In this paper, in light of these e-commerce enterprises which transform from traditional industries, I analyze the limitations of the current business valuation methods, combined with e-commerce enterprises feature, and modify the basic model of the Price-to-sales Ratio, proposing that MPR is more suitable for the evaluation of such commercial enterprises. In case of Suning, analyzing and comparing the calculation result of MPR(modified price-to-sales ratio) model, DCF(discounted cash flow) model, and P/E(price-earnings ratio) model, verifying that MPR is more fit the feature of e-commerce business and relatively more accurately to evaluate the e-commerce enterprise’s value.This paper aims to explore a relatively accurate valuation method to managers and investors. By comparing the business valuation of Suning, I believe that as the development of the capital market, fixed sales ratio approach can be used widely.