A Case Study Of Enterprise Value Evaluation Based On Improved Percentage Of Sales Method

When using the income approach to assess the value of the enterprise,the prediction of the enterprise's future cash flow is a crucial step.The accuracy of the forecast results directly affects the accuracy of the assessment.The case selected in this study is evaluated using the income approach.In this condition,the enterprise's future cash flow was only subjectively predicted and the data obtained lacked credibility.Based on this,this paper introduced an improved Percentage of sales method to conduct a quantitative calculation of the original assessment process in order to arrive at a more informed basis.The accuracy of the assessment results will be increased by this way.The traditional Percentage of sales method is too simple for the prediction of sales revenue and the selection of related financial indicators.It does not consider the time value of funds and the correlation between data.Therefore,this study has improved the traditional Percentage of sales method and reassessed the enterprise value in the case.First of all,it uses a dynamic average method to predict the enterprise's future sales revenue,Use the existing three-year financial data in the use case to discount it to its final value,and use the average value as the forecast value of sales revenue for the next year.Use the sales revenue for the next three years in order to predict the sales revenue for the next year.This method takes the time value of funds into account and the future profitability of the enterprise can be reflected more veritably.Secondly,using SPSS to conduct regression analysis of relevant financial indicators and sales revenue.But,the quadratic regression equation and the linear regression equation obtained by the calculation are not realistic,so the linear regression equation is revised.Then,select and revise regression equations,predict other future financial data based on future sales revenues.And obtain future net cash flow of enterprises and calculate enterprise value.Finally,in accordance with the original assessment process formula and other data,the total equity value of shareholders was obtained,and compared with the original assessment results,the value-added rate was reduced by 56%,the accuracy and credibility of the evaluation value were improved too.