Research On Evaluation Of Investment Value Based On Financial Statements

Since entering into reform and opening up,the socialist market economy with Chinese characteristics has continued to develop,people' s income has increased,more funds have been available for investment,and people' s demand for investment has also increased.The majority of investors are often lacking in investment.The concept of rational investment and technical methods,individual stock investors are often accompanied by greater investment risks when investing in stocks.The data provided by the listed company's financial statements not only helps investors conduct a systematic and comprehensive analysis of the company's operating conditions,but also provides data security for the stock's valuation and calculation.Therefore,the financial statements play a crucial role in the evaluation of the investment value.This article intends to proceed from the perspective of an independent third party,based on the data of the financial statements,analyzes the financial status of Gree,and then selects three types of stock valuation models based on the characteristics of the household appliance industry to provide rational guidance for investors.Investment and risk avoidance provide a scientific and feasible method.Based on the concept of stock price and stock value,this paper first analyzes three factors that influence the macro-influence factors,the industry and regional factors,and the micro-influence factors of stock price fluctuations.Focused on the impact of micro factors,including the importance of financial statements for the evaluation of investment value and the basic methods of financial statement analysis.Then,introduced the stock valuation model and the advantages and disadvantages of the most commonly used five types of valuation models,and selected the price-earnings ratio(PE)model and the book-to-book ratio in the relative valuation model according to the characteristics of Gree Company and the characteristics of the household appliance industry.Three stock valuation models,such as the(PB)model and the cash flow discount(DCF)model,serve as the basis for stock valuation.Then,Gree Electric was chosen as a case to conduct a comprehensive analysis of its financial statements on its solvency,operating capabilities,profitability,and growth capabilities.Through the analysis of the financial statements of listed companies,the stability of the listed companies can be determined.This is the basis of investment.Only a stable company can guarantee the safety of investors' investments.Finally,using the selected model for stock valuation,in accordance with the general principles,the P/E ratio and PBR were respectively adopted from the horizontal and vertical aspects in four categories:industry P/E ratio,historical P/E ratio,industry P/B ratio,and historical P/B ratio.The valuation method is estimated.Based on the data of the financial statements,after evaluating Gree Electric's stock price from 2015 to 2017,we found that the estimated value of historical P/E valuation method is closest to the actual stock price of Gree Electric Appliances and gives investors the Rational investment advice.The basis for long-term stock investment is that the company Jhas a good financial status.For mature companies with strong profitability such as Gree,the valuation method using historical P/E ratio is most suitable.If the current price of the target stock is lower than the valuation result,it should be increased,otherwise it should be reduced.Through the two steps of financial analysis and stock valuation,it can effectively reduce investment risks and promote rational investment.