Research On The Value Evaluation Of Advertising Companies Based On Discounted Free Cash Flow Method

Advertisements can be seen everywhere in daily life,such as subway,TV,Internet and other media.Advertising is leading the trend of fashion,in the current economic environment,is an essential media resources.At present,the advertising companies is facing the challenge of transformation and upgrading,through mergers and acquisitions to expand the size of the company and to complete the upgrading of the industry.Advertising companies in the capital market is very active,then the precise valuation of the enterprise is particularly prominent.Advertising industry is an important branch of cultural and creative industries,is to emphasize the intangible assets of the industry.Compared with the traditional industrial enterprises,its value source also has its particularity,and it also requires a more reasonable assessment of the need to assess the business value.Firstly,this paper clarifies the relevant theories of enterprise value evaluation,and then leads to the enterprise value.On this basis,combined with the characteristics of the advertising company to analyze the source of corporate value.Secondly,this paper introduces the basic methods of enterprise value evaluation,and chooses the appropriate method to evaluate the value of advertising companies.In practice,the commonly used methods of enterprise valuation include cost approach,market approach and income aproach.Analysis of the applicability of these three assessment methods,cash flow discount method(DCF)is a more appropriate method.By analyzing the applicability of these three methods,found that the free cash flow discount method(DCF)is a more suitable method.Finally,the free cash flow discount model is modified to evaluate the value of advertising companies more accurately.Taking the Si Mei Media as an example,the applicability of the method is verified.In this thesis,not only extends the idea of evaluating the value of advertising companies,but also provides guidance for advertising companies and investors in the capital market activities.