ZK Company Equity Valuation Based On The Residual Income Model

ZK company to submit to the China securities regulatory commission on May 12, 2014 listed on the prospectus is planning, ZK company’s board and management need to make the right evaluation to the company’s equity value, thus starting stock at a low price to provide the reference for the company, so in the company’s equity value for scientific and reasonable evaluation is particularly important. This article is a review of the ZK company equity value research. Commonly used valuation model according to the characteristics of the ZK company on choice after comparing the residual income model as equity value evaluation method, then expounds the evaluation idea of residual income, clarifying the use operational steps of residual income model, and according to the step of ZK company to evaluate the value of equity.The first step to test run the application premise of residual income model, look after the adjustment the ZK company’s income statement and balance sheet whether meet the operation and the use of residual income; The second step of ZK company’s balance sheet and income statement adjusted respectively, to distinguish between business activities and financial activities, to lay a good foundation for the analysis of valuation parameters and is; The third step of the ZK company overall analysis, in-depth analysis of industry environment, company internal and external environment, determine the future cost of sales to the company the major influencing factors, such as support for analysis and prediction parameters; The fourth step is in the first two steps on the basis of combining the ZK company’s financial data, development trend and business plan, analysis and forecast the parameter value, and calculate the ZK company’s cost of capital; Fifth step is the calculation of ZK company’s equity value, and to evaluate the value of equity sensitivity analysis of the result.In this paper, the research to help management to make correct assessment of the equity value of the company, provide a reference for the ZK company listed price, provide the basis for management to scientific and reasonable decision.