Research On The Assessment Of Small And Medium-sized Securities Firms' Value

In recent years,as the domestic securities market develops faster and faster,the brokerage has gradually taken more and more important position of finance industry with its crucial participation in securities market.Besides,the willing of investors to invest for securities companies is increasing much stronger.By the end of 2016,the number of securities firms registered in China association of securities trading has already reached 129,but only 30 of them are listed on A board or H board which means that about 100 securities firms' value is waiting to be discovered.However,there are some particularities of business operations in those small and medium-sized securities firms,and it makes that there are several imperfections to assess the value of those small and medium-sized securities firms with traditional evaluation models.Thus,it is very meaningful to improve the methods of evaluating securities firms and obtaining its' reasonable value based on the particularities of business operations in those small and medium-sized securities firms.This article presents a brief introduction of this research background and significance firstly,which explains the particularities with traditional evaluation method and the feasibility with the new method in assessing those small and medium-sized securities firms.Secondly,it does a research that combined with the reality on using the traditional method to assess the value of simples which means these 13 small and medium-sized securities firms in this paper.The result proves that there are serval shortcomings and lack of applicability to using the traditional method to estimate securities firms.And then,using the method of economic value added and real option method based on EVA to evaluate those companies.It turns out that it is more appropriate to use the method of real option based on EVA to assess those value.At last,this article is summarized and indicates that there are defects of the lack of abundant varieties of real option methods and too much dependence on financial statement to do this research.According to this study,here are three main viewpoints below:1.Because of its own boundedness and the particularities of business operations in those small and medium-sized securities firms,the theory of tradition evaluation cannot be suitable for those companies.2.Compared with the traditional method,the method of economic value added could be better to evaluate those companies,but the accuracy should be improved.3.The real option evaluation method based on EVA is better in evaluating those companies.According to the data of this article,it proves that the method can make the probability be 69.23%.with controlling the error of assessment below 15%.In this paper,the valuation method,which combines the method of economic value added with the real option method is the innovation of this paper.It proves the new measure to assessing the value of those small and medium-sized securities firms has obvious advantages in theory.And the research builds the real option evaluation model based on the method of economic value added and then it is compared with the traditional method,the method of economic value added,the real option evaluation method with the real data.It makes clear that the real option method based on EVA is more overall and appropriate to reflect the value of small and medium-sized securities firms.