I. Definition
1, what is enterprise value?
Enterprise value refers to the economic value of an enterprise and its assets, which can be measured from the perspectives of future cash flow, financial situation and market performance. Enterprise value is an important indicator of enterprise development, an important reference for enterprise management, and an important indicator that investors can't ignore in their investment decisions.
2, the measurement method of enterprise value
There are generally two methods to measure enterprise value: cash flow value method and book value method.
(1) cash flow value method
The cash flow value method is a method to measure the enterprise value according to the future cash flow of the enterprise, and convert the future cash flow of the enterprise into the present value, thus estimating the enterprise value.
(2) book value method
The book value method is a method to measure the enterprise value according to the book value of the enterprise, which converts the book value of the enterprise into the present value, thus estimating the enterprise value.
Second, the valuation model
1, market behavior model
Market behavior model is a model to measure enterprise value according to market behavior, and convert enterprise market behavior into present value, thus estimating enterprise value. The valuation methods of market behavior model are divided into related stock model, discounted cash flow model and discounted income model.
(1) related stock model
The related stock model is a model to measure the enterprise value according to the price of the related stock, and convert the related stock price of the enterprise into the present value, so as to estimate the enterprise value.
(2) cash flow discount model
The discounted cash flow model is a model to measure the enterprise value according to the future cash flow of the enterprise, and discount the future cash flow of the enterprise into the present value, thus estimating the enterprise value.
(3) Discounted income model
Discounted income model is a model to measure the enterprise value according to the future income of the enterprise, and discount the future income of the enterprise into the present value, thus estimating the enterprise value.
Third, the actual case.
1, Alibaba Group
Alibaba Group is a comprehensive e-commerce company, and its corporate value can be estimated by the cash flow discount model, that is, predicting the future cash flow of Alibaba Group and discounting it to the present, so as to estimate the corporate value of Alibaba Group.
2. Tencent
Tencent is a technology company, and its enterprise value can be estimated by revenue discount model, that is, to predict Tencent's future revenue and discount it to the present, so as to estimate Tencent's enterprise value.
As can be seen from the above, the enterprise value refers to the economic value of the enterprise and its assets, which can be measured from the perspectives of future cash flow, financial status and market performance of the enterprise. Generally, there are cash flow method and book value method to measure enterprise value, and valuation models include market behavior model, related stock model, discounted cash flow model and discounted income model. In practical cases, Alibaba Group can estimate its enterprise value through discounted cash flow method model, while Tencent Company can estimate its enterprise value through revenue discount model.
This paper discusses the connotation and calculation method of enterprise value from the definition, measurement method, valuation model and practical cases. Enterprise value can be measured from the perspectives of future cash flow, financial status and market performance. Usually, measurement methods include cash flow value method and book value method, while valuation models include market behavior model, related stock model, discounted cash flow model and discounted income model.