A Comparative Study Of Residual Income Method And Cash Flow Discount Method In Enterprise Value Evaluation

With the development of economy.China's economic strength,mergers and acquisitions have become rapid business expansion,increase the scale of enterprises,an important means to enhance the level of corporate profits,including domestic and overseas mergers and acquisitions,to enhance the strength of national enterprises in China has played a vital role;and whether the enterprise value evaluation can give to be a reasonable and accurate judgment is determined about the acquisition price,even is an important part of the success of mergers and acquisitions.At present,the enterprise value assessment methods are cost method,market method,income method,three methods have inherent advantages and defects,which use the income approach to the discounted cash flow method the majority of the 90's of last century,the residual income method because of its collection of the previous forecast,the traditional accounting book value,not only for the future earnings forecast to be considered,but also on the net Considering the production factors,caused the academic research has certain degree of academics in the United States.Along with the development of the industry,the securities industry since the 90's of last century once again into the bottom of the development,in order to better cope with the greater competition bank full license mixed era,enhance their own strength and the scale of capital,improve the competitiveness of the industry that has become the inevitable choice of some securities companies.This article through to the second Chinese securities industry mergers and acquisitions background in China by far the largest securities industry merger cases--SW merger macro source securities analysis,through comparative analysis of the evaluation process and results of the residual income method and discounted cash flow method.And proposed the residual income method is better than the discounted cash flow method and the conclusion from the angle of theory and practice.This paper is divided into five chapters,the first chapter describes the background and significance of the research paper.The second chapter,from mergers and acquisitions,the enterprise value of the two described in this paper involved in the research process theory.The third chapter of the residual income method and the discounted cash flow method has been described in detail,and the application results from the two methods were evaluated.Chapter ?,combined Shenwanhongyuan case,the application will be residual income method,and now with the wider application of the discounted cash flow method for comparison.The fifth chapter,through the merger case Shenwanhongyuan residual income summed Application recommendations on M&A value.