Application Research Of DCF Method In Valuation Of M&A Value Of Pharmaceutical Enterprises

One of the most important and key factors in the process of M&A is the valuation of value in M&A,which is the essence of M&A.There are two main reasons why valuation is so important.First,corporate value is the main reference for mergers and acquisitions to negotiate prices and select mergers and acquisitions.Second,the valuation of value helps the acquirer to folly understand the risks in the M&A process,and then control the risks to prevent the occurrence of excessive payment and increase the success rate of M&A.The paper takes China Resources Sanjiu Pharmaceutical Co.s Ltd.("China Resources Sanjiu")as an example,and then takes Guilin Tianhe Pharmaceutical Co.,Ltd.("Guilin Tianhe")as an example.Firstly,it expounds the social background of China’s pharmaceutical companies’mergers and acquisitions.The research status of pharmaceutical mergers and acquisitions at home and abroad,the research content and research ideas of the paper are briefly described.Then,the basic theories such as the coneept of mergers and acquisitions,the theory of value valuation,and the DCF method model are introduced.Then,from the two aspects of the environment and development status of the pharmaceutical industry,the simple analysis of the environment of China’s pharmaceutical industry mergers and acquisitions.through the comparison of the advantages and disadvantages of various valuation methods and applicability,selected the most suitable for China’s medicine The discounted cash flow method of the industry background,the valuation of mergers and acquisitions of Guilin Tianhe Pharmaceutical,and the basic model of DCF for the specific situation of the target company to make its valuation more accurate.Furthermore,based on the general process of DCF M&A valuation,the paper elaborates how to exercise the DCF model to evaluate the value of the target company after the merger.At the end of this paper,the conclusions of this merger are summarized,and relevant recommendations for corporate mergers and acquisitions and prospects for future corporate development are presented.