Research On Enterprise Value Evaluation Based On Residual Income Model

Due to the continuous improvement of market.openness,Entrepreneurs gradually realize that in the process of business operation,they can not only maximize profits,but also take full account of the rapid development of enterprises.Paying attention to enterprise value is not only helpful to understand the current situation of enterprise operation,but also helpful to understand the growth ability and development prospect of enterpriseBy comparing the four evaluation methods in the value evaluation system,this paper holds that the income method contains the value obtained from the future operation of the enterprise and can reflect the essence of the enterprise value.The residual income model is one of the multiple algorithms of the income method.The model focuses on the ability of enterprises to create value,which reflects the goal of enterprises to pursue the maximization of connotation value.Since it is difficult to predict directly according to the residual income method,and the assumption that an enterprise can operate indefinitely is obviously unreasonable.In this paper,by introducing the end-of-period price-to-book ratio,the forecast period is changed from infinite to finite,which avoids the unreasonable assumption of indefinite operation and improves the accuracy of the forecast.Through the introduction of DuPont analysis system to improve the traditional model,the prediction of residual income is linked with the financial indicators of the enterprise,so that the evaluation result of the residual income model is more accurate.Therefore,this paper chooses to use the improved residual income model to evaluate the enterprise value.Dong-E-E-Jiao Co.,Ltd.(DEEJ)is the leader of traditional Chinese medicine industry,and its development situation is concerned.This paper selects DEEJ as the research object.First of all,it analyzes the operation status and financial situation of DEEJ,comprehensively grasps the business situation and development trend of DEEJ,and can provide certain analysis basis for the prediction of various indicators of theresidual income model.Secondly,the improved residual income model is applied to the enterprise value evaluation analysis of DEEJ.Forecast the relevant financial indicators one by one.The error between the evaluation result and the actual market value is 2.93%.By comparing the valuation results with those of other valuation methods,which verifies the accuracy of the evaluation result.Finally,it is suggested that the residual income of managers is the important factor that drives the enterprise value,and some suggestions are put forward for the enterprise value management according to the analysis results.