Company Value Exploration Based On The Vew Of Cash Flow

In modern economic activities,with the rapid development of the securities market and the continuous improvement of the market economic system,more and more people participate in the ranks of investment.However,the characteristics of the Chinese stock market chart,"sharp rise,sharp decline and long-term constant",reflect the irrational and unhealthy market investment.According to the Wind data,the trend of the valuation level of Chinese and American stock markets in the past decade shows A great divergence: in terms of the weighted blue-chip stocks,the average P/E ratio of The Shanghai 50 Index of A-shares in the recent decade is 10.44 times,and the average P/E ratio of the Dow component is 17.35 times.The valuation level of a-shares of the weighted blue-chip stocks is significantly lower than that of the US stock market.However,compared with NASDAQ,as of December 31,2019,the overall P/E of A-share Growth Enterprise Market was 52.37 times,while that of Nasdaq was 26.6 times,indicating A significant premium in the valuation of A-share growth Enterprise Market.Excluding the impact of start-ups,the Shanghai A-share market and the Shenzhen Stock Exchange's 300 P/E ratio are only about 10,which is seriously undervalued.It can be seen that in China's capital market,some stocks with good performance are undervalued,and some stocks with scientific innovation concept are far higher than their actual value.This paper argues that a reasonable enterprise market price should fluctuate based on its intrinsic value.Enterprise value is a comprehensive reflection of the overall asset structure,profitability,growth ability and cash growth ability of an enterprise.The ultimate goal of investment is to harvest more cash.Therefore,the value of a company mainly depends on the discounted present value of its future cash flow based on the consideration of time value.As qualified investors,should from the company's strategy,asset management ability,operation ability and so on angles,analyse and judge the ability of the enterprise future cash flow value,at the same time,cash flow analysis is based on cash basis,make up the balance sheet and incomestatement to the defects of accrual basis,to a great extent,increased the difficulty of financial fraud,can be more real reflect the company's business situation,therefore,the valuation method based on the analysis of cash flow in the application of investment has important significance.This study intends to build cash flow analysis and data between stock value model,to explore the specific influence to the enterprise value of cash flow and reflect,to establish a set of effective value of stock valuation method,return to the origin of the stock long-term investment judgment,to facilitate in uneven,true and false confuse investment targets are selected with real investment value and appreciation of space object.In this paper,Guizhou Maotai,a leading enterprise in the traditional liquor industry,and Hikvison,a leading enterprise in the high-tech security industry,were selected as the research objects to conduct value evaluation research based on the perspective of cash flow,and a data model between cash flow analysis and stock value was built through application research.This article take the literature research,factor analysis,comparative analysis,empirical analysis,the trend analysis and other research methods,in this paper the research background,research purpose and significance,and on the basis of literature review and systematic review the valuation and free cash flow and other related theory,and then starting from the object of study historical data,fundamental analysis is based on the research object,and using five analysis to anticipation of future prospects,on the basis of the forecast study future operating free cash flow growth rate,calculate the weighted average cost of capital rate as the discount rate,choose suitable discount model,The discounted free cash flow(FCF)method of operating assets is used to estimate the value of stock investment.The analysis shows that the difference in the business model of the two cases leads to the difference in the estimated free cash flow of the two cases,which in turn leads to the different valuation directions of the two cases.In this paper,the valuation results of two research object from its price in the market for validation,validation results confirm for valuation of different formats and effective use of research,this paper has a great guidance for rational investment,at the same time,alsoto compare the advantages and disadvantages in the relative valuation method,such as PE,indicates the operating assets of free cash flow discount method to estimate the object of study,although the operation is relatively complex,but a more apt reflection reflect the enterprise intrinsic investment value of risk appetite,wide application scope.The research in this paper indicates that special attention should be paid to the application process.First,the collection and analysis of historical data should take a long enough historical period,no less than 5-10 years,to provide a relatively reliable trend analysis.Secondly,in the fundamental analysis of the enterprise should be comprehensive,in addition to the company's own operating conditions,but also to further analyze the situation and competitiveness of the entire industry.Third,in this article,the impact is not big for some of the items in the calculation process has taken some simplified method to calculate,in practice,if the valuation object is a special case,the profits of the valuation object and the larger impact business matters such as cash flow,should reduce the use of the simplified method,special evaluation for special items to impact on the valuation and adjust.Finally,this paper argues that,because of the discount valuation method has a lot of subjective judgments,valuations are affected by the subjective judgment,therefore,is not an accurate numerical,it doesn't mean the future price will certainly achieve valuations,because the actual market price also will be affected by some market preferences,likely below may also be valued above the valuation.We as investment judgment basis,more attention should be the valuation and the current market price is the difference between market value level is big enough,if there is a sufficient margin of safety,if the difference is large enough,means in accordance with the price return to the intrinsic value of economic law,investment risks are relatively small,mean to underestimate space is enough big,as long as the company's fundamentals and operating conditions did not appear abrupt changes,so as a long-term investment,is a relatively safe as a whole.