Business Valuation Based On Dynamic Cash Flow

As China's economy develops rapidly, companies are constantly looking for a new direction and way, the most effective way that companies choose is mergers and acquisitions. As companies at this stage expansion of the scale and market share, in the wave of economic development also presents a situation intensified, At the same time, the scale of M & A also gradually expand as the economy develops, the relevant agencies and industry-wide participation involved more widely. Rapid economic development and the stage of large-scale influx of capital, provide a wealth of financial support for expanding the size of the acquisition. However, look at the M & A market success stories, and both proved successful merger or not the key is that both sides agree on merger acquisition price. Whether the acquisition price is reasonable, whether you can reflect the value of the acquired company, and whether the acquired company to accept, which are related to M & A activity could be succeed. Therefore, accurate and reasonable for the overall value of the acquired company's judgment and estimates in M & A activity is particularly important.In this paper, the department store industry merger integration as an entry point to the acquisition of Wangfujing Department Store spring an example, the state has promulgated the "Valuation Standards---enterprise value" as the basis, combined with economic development situation in the country, has been analyzed and the enterprise industry conditions, development prospects and internal and external environmental situation, the use of discounted cash flow method to assess the value of the acquired company are discussed in detail to determine the discount rate for the prediction and valuation of the target company's cash flow, based on the assessment results of simple analysis and draw relevant conclusions, provide a reference for future merger between the department store industry.Reference herein Professor Li Yanxi theory to research dynamic cash flow forecasting models, and in the choice of cash flows determined on the mining enterprises dynamic cash flow as a basis for assessing the value of the enterprise, while the cash flow prediction model in this paper, combined with the actual situation of the case and its dynamic cash flow projections on the amendment, at the same time in determining the discount rate, the discount rate is based on a dynamic, can match the dynamic cash flow, improve the assessment results accuracy and reasonableness. Using dynamic discounted cash flow evaluation model to assess the value of the target company and establish a more complete and efficient evaluation model for the integration of future acquisitions department store industry in the value of the target company to help a little evaluation.