Valuation Of Online Education Enterprise Based On Modified FCFF Model

In recent years,with the rapid development of the Internet economy,the “Internet plus”mode has become an irresistible trend.In order to get the bonus of Internet economy,new Internet business models have been created in many traditional industries.Under such background,with the emergence of the mode of “Internet plus education”,online education enterprises are booming.Meanwhile,with the development of online education enterprises,Investment,mergers and acquisitions,acquisitions,restructuring and other economic activities among enterprises are increasingly frequent.So it is necessary to study business valuation method conforming to the characteristic of online education enterprise.Although there are fruitful research results on the valuation of Internet enterprises in China at present,the research on online education is still relatively insufficient.Therefore,this thesis combines theories and cases to study the valuation of online education enterprises,and attempts to provide new ideas for the valuation of online education enterprises.This thesis first elaborates the basic concept and profit model of online education enterprises,and introduces the macro and micro factors affecting online education enterprise value.Meanwhile,combined with the characteristics of online education enterprises,this thesis analyzes the applicability of the existing evaluation method,determining the most suitable evaluation method of free cash flow discount model(FCFF)under income approach.Secondly,the traditional FCFF model and its specific parameters are introduced.And this thesis discusses the value of perpetuity in the FCFF model and provides a revising idea.In the process of determining perpetuity’s value,Monte Carlo simulation is introduced to increase the volatility to the value forecasting of perpetuity.The revised FCFF model is constructed,and the operation steps of the new model are introduced.What is more,this thesis mainly takes the enterprise value assessment of QTONE Education Co.,Ltd.as the example for case analysis.Due to the particularity of enterprise in the case,in the prediction of predictable period’s operation revenue,this thesis adopts the combination of Enterprise Life Cycle Theory with macro policy to determine the revenue growth rate,rather than using the average revenue growth rate of the past five years.In the process of determining perpetuity’s value,this thesis introduces the Monte Carlo simulation and changes the annual cash flow of the perpetuity period into the fixed value or enhances the scientificity the value of the perpetuity period by the traditional method of increasing at a fixed proportion.Finally,this thesis applies the modified FCFF model to calculate the enterprise value,and then contrasts it with the average of the medium and long term closing price of the stock market and the stock price of the agreed equity transaction on approaching evaluation base date,so as to test the effect of modified model by calculating the variance rate.The research shows that it is applying the Monte Carlo simulation technology to the value forecast of the perpetuity period,applying the Enterprise Life Cycle Theory to the revenue forecast of the predictable period,and then adopting the modified FCFF model to evaluate the value of online education enterprises that can be helpful to improve the scientificity and rationality of value assessment of online education enterprise.