Research On Business Valuation Of SHAIXI GUOXIN Energy Corporation Limited

With the continuous development of capital market,China will become a significant international capital market in the world.Merger,acquisition reorganization,and a series of property right transactions among domestic enterprises will develop rapidly,not only when domestic enterprises go into the international market,but also the international capital is into the domestic market;business valuation as the property right transaction pricing basis and decision-making basis,gradually is valued by the market.The business valuation theory has been developing for hundreds years in other countries,and it is becoming mature,however,it is still being explored in China.Comparing to Equity Securities Valuation?P-E ratios?Economic Value Added and Option Pricing,Discounted Free Cash Flow mainly focus on history performance,prospects and grown ability of corporate,and in the meanwhile it makes the evaluation of enterprise development can be more in line with the actual situation by avoiding choosing profit targets which can be changed by people easily.Thus,it makes evaluation of enterprise development to be more accurate,so it is widely used in business valuation and becomes the model in the world nowadays.This article is on condition that SHANXI GUOXIN ENERGY CORPORATION LIMITED will be operating,using a two-phase model and combining historical financial statements,business circumstance,the core competitiveness and industry analysis to predict the free cash flow of forecast period and sustainable period of SHANXI GUOXIN ENERGY CORPORATION LIMITED,and through the discount rate to discount the value of the company.Use Discounted Free Cash Flow to assess the value of SHANXI GUOXIN ENERGY CORPORATION LIMITED.Combine Discounted Free Cash Flow with the reality of our country in the form of case to explore the feasibility and adaptability of assessing corporate value by using Discounted Free Cash Flow,which can be a reference to concrete implement process of business valuation.At last,assessment result is higherthan the market value which proves the valuation of SHANXI GUOXIN ENERGY CORPORATION LIMITED is underestimated.By analyzing the assessment result,reasonable suggestions of promoting the market value of SHANXI GUOXIN ENERGY CORPORATION LIMITED can be put forward: ensure product supply,and improve the market occupancy rate;improve the ability of financing,and expand financing channels;strengthen the supervision of capital,and revitalize the existing assets;promote budget management comprehensively,and construct the management of accounting system;process training and recruitment at the same time,and optimize human resources.