Application Of Entropy Weight TOPSIS Model In Enterprise Value Evaluation

Enterprise value evaluation is the product of modern market economy.As an indispensable professional service,It plays an important role in promoting enterprise reform,improving enterprise structure,safeguarding the legitimate rights and interests of property owners,promoting the development of market economy and ensuring social equity and justice.With the property rights trading activities increasingly frequent,such as enterprise merger,reorganization,sale and equity investment,the demand of enterprise value evaluation is increasing gradually.At present,the main approaches of enterprise value evaluation include cost approach,income approach and market approach.Market approach is an internationally accepted approach for enterprise value evaluation.Its advantage is that the basic data comes from the market and reflects the information the market needs to inform,which is easy to understand and accept.In some foreign countries and regions,the evaluation theory has been developed to more mature,and the research and application of the market approach of enterprise value evaluation have been relatively abundant.On the contrary,limited by the objective conditions,the theoretical system and practice of the market approach in China need to be constantly developed.This paper briefly analyzes the current situation of the research on the market approach of enterprise value evaluation,and briefly describes its theories.Combined with the current situation of less research on the selection of comparable objects,this paper studies the selection of comparable objects and strives to improve the application of market approach in enterprise value evaluation.When using market approach to evaluate the enterprise value,we should ensure that the selected comparable objects are comparable with the target company.Therefore,this paper focuses on strengthening the comparability between the selected comparable objects and the target company.After analyzing the research status of entropy weight method and TOPSIS method at home and abroad and summarizing them,this paper constructs the entropy weight TOPSIS model,analyzes the advantages and disadvantages of the model and introduces the model into the market approach of enterprise value evaluation.Using objective model to select comparable objects makes the final evaluation result morescientific.In the entropy weight TOPSIS model,the entropy weight method is actually to perfect the TOPSIS method.In the original TOPSIS method,each index is weighted through the subjective evaluation method.Therefore,the entropy weight method and TOPSIS method are combined to eliminate the influence of the subjective weight,so that the application of TOPSIS method is more objective.The distance between each sample object and the target company is calculated by the entropy weight TOPSIS model.After sorting,the first three objects are selected as the comparable objects.At the same time,the distance between the comparable objects and the target company is used to weight the comparable objects,which makes the evaluation results more scientific.After optimizing the selection of comparable objects,the entropy weight TOPSIS model can also be used to replace the expert scoring method commonly used in the comprehensive evaluation method during the adjustment of value ratio,so as to make the calculated comprehensive score more objective and reasonable,and provide a basis for the adjustment coefficient of value ratio.In addition to listed companies,the optimization scheme of the market approach of enterprise value evaluation proposed in this paper is also applicable to the enterprise value evaluation of non-listed companies.Therefore,taking CHONGQING SOKON INDUSTRY GROUP STOCK Co.,Ltd.,which has been on the market for a short time,as an example,we use the model through specific cases to verify the validity of the model,and finally summarize the relevant conclusions.