Research On The Online Education Enterprises Valuation

Within the tide of the Internet economy,traditional industries take full advantages of the Internet technology for innovation,and many new business models have been derived.Meanwhile,online education industry emerges and is developing rapidly.Among the industry,outstanding enterprises have entered the capital market one after another with frequent mergers and acquisitions.Generally,online education enterprises are featured by large amount of initial investment,long payback period,high proportion of intangible assets,unstable earnings and even short-term losses,which leads to certain limitations in the application of traditional income approach in practical business valuation.Thus,it has certain theoretical and practical significance to study how to valuate online education enterprises and try to improve the applicability and scientificity of the income approach.This paper starts from the analysis of features of online education enterprises and the selection of business valuation approach.Then,several attempts will be made to modify the widely-used FCFF model in the income approach.The emphasis will be put in the selection and revision of related indicators in financial aspects,as well as the establishment and application of indicator system in non-financial aspects.Finally,this paper will apply the modified FCFF model in the case of Zhengbao Distance Education Company's valuation.In order to verify the effect of the modified FCFF model,the valuation results will be compared with the previous ones without any modification.This study suggests that it is useful for improving the rationality of online education enterprises' valuation by using the modified FCFF model,which includes correction of business income forecast,sustainable growth rate and other indicators of financial factors,as well as quantifying the non-financial factors.