Research On The Method Of Value Evaluation In Software And Information Technology Service Enterprise

With the rapid development of the Internet economy,Internet companies ha ve a growing demand for listing.And in recent years,mergers and acquisitions between Internet companies is endless,the intrinsic value of such enterprises has become a focal point for business manager,investors and other interests stakeholders.Internet companies have e-commerce,network media,software and service types and other types,in order to make the research more targeted,this paper select one larger proportion type of the Internet companies,that is software and information technology services companies to do special research on value evaluation method.Around the above issues,the main contents of this article include the following parts:The first part is the elaboration of the theory and the literature review,as the basis of this study.The theory includes two aspects: the enterprise value evaluation method theory and the enterprise life cycle theory.The literature includes the past scholars' research on the valuation of I nternet enterprises about market method,income method and real option method.In the past,scholars have not considered the enterprise life cycle,and it lead to the entry point of this paper,that is,assimilate the enterprise life cycle theory into the software and information technology services business valuation.The second part is analysis and judgment of life cycle of XuanWu Technology.This part first analyzes XuanWu Technology's situation of business and industry.And then based on the research of previous scholars on the enterprise life cycle theory,combined with characteristics of special profit model,Growth that is difficult to predict,high risk,many non-financial indicators for software and information technology services business,the qualitative analysis method and the quantitative analysis method(including the cash flow method and the comprehensive index method)which are suitable for determining the life cycle of the enterprises are summarized.Then,according to the above-mentioned summary life cycle judgment method,it is determined that it is in the growth period.The third part is selection of value evaluation method for the growing XuanWu Technology.This part first is analysis of the applicability of the four methods(cost method,market method,income method and real option method).It is found that the cost method and the market method are not applicable to the enterprise value because of the large defect.The real option method can fully measure the value of the uncertainties of the enterprises in the growth period,and dig the potential value,so it is a suitable method to evaluate the growing software and information technology service enterprises;There are some shortcomings,but income method still have a certain advantage in the assessment of the existing business value of enterprises,so the income method is a generally applicable method to the growing software and information technology services business valuation.Then,this part compares and analyzes respectively three models of the real option method(B-S,Binary Tree,Schwartz and Moon)and two models of the income method(DCF,EVA),and then the Schwartz and Moon model is selected from the real option method,and the DCF model is selected from the income method.The fourth part uses the selected two evaluation methods to evaluate the value of XuanWu Technology.By comparing the evaluation values of the two models with the market value,the following conclusions can be drawn: The Schwartz and Moon model can predict future development prospect of the growing software and information service enterprises to a certain extent,and its valuation result is closer to the real value of the enterprise than the market value;The valuation result of the DCF model is very close to the market value,which reflects the advantage of the DCF model in assessing the value of the existing business.The main innovations of this paper are as follows: First,we consider t he enterprise life cycle factors which have great influence on the value of the Internet enterprises,thus proposing a new paradigm for the Internet enterprise valuation: the first need is to determine the life cycle of the enterprise,and then select the appropriate assessment method to evaluate its valuation;Second,we sum up the method(Including qualitative analysis and quantitative analysis)to determine the life cycle of software and information technology services enterprises;Third,this paper combines with XuanWu Technology to compare and analyze the two valuation methods which are suitable for value this type of growing enterprises.Combined with the conclusions of this paper,there are still several aspects to be further expanded : The other stages of the life cycle need to be studied,The reliability of the data remains to be verified,the selection and processing of parameters need to be further refined,the applicability of the conclusions needs further validation.