The Application Analysis Of The Discounted Cash Flow Method In The Valuation Of Cultural Enterprises M&A

In the process of merger and acquisition,the value evaluation of the enterprise is an important stage in the whole transaction.A reasonable process of the value evaluation will promote the completion of merger and acquisition successfully.At the same time,the value evaluation will influence the enterprises which have completed the activities in their managements.Under the background of “the Belt and Road” and “Internet plus initiative”,people now have high demands for the cultural life.And our country attaches great importance to the cultural industry,then a series of policies are issued to promote the development of cultural enterprises.Since the year of 2013,the number of merger and acquisition among cultural enterprises has risen sharply.But it is often inaccurate in evaluating the value of cultural enterprises.The M&A parties have signed performance pledges,but there are still many risks.This puts higher requirements on the value evaluation of cultural enterprises than before.The article uses the literature analysis method to analyze the existing literature.After that,it describes important concepts and basic theories deliberately.Then the article discusses the development of the cultural industry and the cultural enterprise.Then the article discusses the applicability of discounted cash flow method to cultural enterprises on the basic of cultural enterprises' speciality.Next,the article elaborates the reason why chose the case for the representative.And both sides in this activity are presented and analyzed fully.Then the article analyzes the application of discounted cash flow method in the process of Y company's value evaluation,including its measurement and the selecting process of parameters in the valuation model.And the process is analyzed fully.The article also compares the results calculated by discounted cash flow method with the results calculated by cost method simply.And it compares the net profit completion results with this evaluation result.Cultural companies which are evaluated by the discounted cash flow method have risks of high premiums.But it is acceptable when referring to the characteristics and development of cultural enterprises.Then there are some inspirationswhich are presented by the conclusion of this case,including how to prevent evaluating risks,how to choose the right method and so on.At last,it shows the shortcomings of the article.The innovations of this article are:(1)Most studies in the past focused on the theoretical discussion or applied to the method of value evaluation directly,they do not analyze the whole process of evaluation.The article conducts a detailed analysis of the process;(2)Most studies in the past just applied evaluation methods directly.The article can compare the original valuation results with the relative reports issued by the companies.