Research On Valuation Of H Company Based On Residual Income Model

The purpose of enterprise value assessment is to determine the reasonable market value of the company,and to make suggestions on the management of the company by comparing with the market value.There are three methods of assessment,including the market method,the cost method and the income method,of which the income method is more comprehensive than the first two methods,the residual income model in the income method is not affected by the dividend policy and the market environment,so it has a great advantage in reflecting the actual value of the enterprise,however,it is difficult to predict directly and the calculation is complicated.H company has always been in the leading position in the sports goods manufacturing industry,but in recent years,the profit ability fluctuates greatly,the operating performance has begun to decline,therefore,in-depth study of the value of H Company,it is of great significance to provide suggestions and directions for the future management and development of its enterprises.Based on the method of residual income and the data of China’s own capital market,this paper evaluates the value of H Company.First of all,this paper expounds the background,significance,research content,research methods,and stated the basic concepts related to corporate value.On the basis of combing the literature related to enterprise valuation,this paper expounds in detail the concepts of market law,income law and cost law,and compares them,finally,the income method is more advantageous.On this basis,the residual income model in the income method is used to evaluate the value of the enterprise.After that,the basic situation and financial situation of H Company were analyzed and evaluated.At the same time,the operating income,operating net profit,asset turnover rate,equity multiplier and equity capital cost are forecasted.The value of H Company is 1.51 billion yuan,which is10.7% different from the market value.The evaluation result is within a reasonable range of error,which confirms the validity of the residual income model for the valuation of H Company.In addition,dividend cash flow model and free cash flow model are used to evaluate the value of H Company respectively,and it is found that the residual income model can better reflect the real value of H Company,the results show that the net interest rate of operating income,the cost of equity capital,the equity multiplier,the asset turnover rate have the greatest impact on the value of the enterprise.Finally,according to the process and results of enterprise value evaluation,the paper puts forward some suggestions to enhance the value of H company from three aspects: increasing the net interest rate of operating income,optimizing the capital structure,and improving the efficiency of asset use,in order to better understand the value of enterprise management personnel,adjust the business strategy to provide a reference.