Research On Valuation Of Pharmaceutical Industry Enterprises Based On Free Cash Flow Method

Business valuation is the product of modern market economy,which has inextricably linked to a series of economic activities such as listing,merger and reorganization,corporate reform,equity trading and transnational operation.With the continuous and stable development of the current economy,China's capital market and efficiency of operation has been gradually improved.In order to realize the maximization of business value,business value management concept is increasingly respected,and the business valuation is concerned widely.How to evaluate the corporate value of listed companies correctly and effectively is not only an important subject for the securities industry to explore for a long time,but also a question the investors are most concerned about.As a combination of traditional industries and modern industries,pharmaceutical industry play an important role in the national economy.In recent years,with the improvement of the domestic capital market and the development of the pharmaceutical industry,the scale effect of the pharmaceutical industry emerged gradually,the domestic listed pharmaceutical companies became more change than before,which stand that the pharmaceutical industry will face a better development prospects.Therefore,finding a suitable method for assessing the value of corporate companies in the pharmaceutical industry is not only beneficial to the shareholders to better understand the intrinsic value of the company,but also provide decision-making basis for enterprises.In this paper,I used theoretical theory,data analysis and other methods to introduced the research background and significance of this paper,the state of business evaluation between China and the World.Secondly,the author summarizes the theory of enterprise value evaluation,and analyzes three methods of business evaluation: cost method,market law and income method.Then analyzes the present situation of China's pharmaceutical industry,and makes a systematic introduction to the present application method of the enterprise value evaluation method-the discounted cash flow discount model,the discounted cash flow discount model,the company free cash Based on the comparison of the flow discount model,the discount cash model of the free cash flow is selected as the main use method of the case study.This paper chooses the company's free cash flow discount method to evaluate the value of Ling Rui pharmaceutical enterprises,and elaborates the selection of the parameters in the evaluation process,the concrete steps and the calculation and analysis process.Then we can provide practical reference case evaluation method and evaluation operation flow for the business evaluation of Chinese pharmaceutical listed companies.