The Analysis Of Business Valuation Of Anhui Xinhua Media Co,Ltd. Based On Residual Income Model

The year of 2018 is the first year to implement spirit of the 19 th National Congress of the Communist Party of China,and the year of 2019 is the key year to implement the 13 th Five-Year Plan.The development of the cultural industry will enter a critical period,and emerging cultural industries will continue to be the focus of attention and benefit,especially the digital cultural industry.In recent years,with the introduction of a series of supportive policies,the cultural media industry has developed rapidly,and various activities such as mergers,acquisitions and investment have become increasingly active.In the future,the trend of diversification will be more obvious in cultural media industry.Digital publishing,online education,movie and television culture and other new format layout will be more extensive.In order to adapt to these economic activities,the necessity and significance of business valuation is further highlighted.Only reasonable value evaluation can protect and develop these enterprises more reasonably.Residual income model is widely used in foreign stock valuation,which maximizes the role of financial indicators and improves the rationality and objectivity of valuation results.The idea of residual income in the model can urge managers to pay attention to the ability of value creation that is,the ab ility to obtain residual income.And it reminds investors to pay attention to the intrinsic value of enterprises.In view of this,this paper takes the valuation of Anhui Xinhua Media Co,Ltd.as an example,analyzes the particularity of its industry and its own characteristics,and discusses the feasibility of this model in valuation.Firstly,this paper reviews the domestic and foreign literature on residual income model and valuation of media enterprises.Then it can be seen that compared with dividend discount model and cash flow discount model,residual income model has an obvious advantage in explaining stock price.Secondly,this paper expounds the relevant theoretical basis of enterprise value assessment,explains the connotation and influencing factors of business valuation,and introduces the traditional valuation method and the basic theory of residual income model.Then,combining with the characteristics of Anhui Xinhua Media Co,Ltd.,this paper analyzes and compares the traditional valuation methods.And the results show that the residual income model is more suitable for the valuation of this enterprise.However,the traditional residual income model has some limitations in valuation,so we need to improve the model.Therefore,this paper introduces the Du Pont System and the ending price-to-book ratio to correct the defects of this model,and modifies some indexes for the selected enterprises to improve the applicability of the model.On this basis,this paper analyzes the valuation of Anhui Xinhua Media Co,Ltd.,applies the improved model to the valuation,and obtains a more reasonable evaluation result.Thus it confirms the rationality of the revised residual income model in valuation.Finally,the paper comes to the conclusion that the residual income model has advantages in business valuation,but it needs to be modified in combination with the characteristics of enterprises and industries.At the same time,there are still some deficiencies in the application of the model in this paper,which need to be further improved.This paper is expected to provide some references for the valuation of other enterprises in the media industry and the application of residual income model in other industries through theory and case analysis.