1. The expected future income of the enterprise is predictable and can be measured in currency;
2. The risks assumed by the enterprise's expected income can also be predicted and measured by money;
3. It can predict the expected profit period of the enterprise.
Basic steps of evaluating enterprise value by income method;
1. Study and analyze the historical operating performance of enterprises;
2. According to the operation of the enterprise, analyze the assets and liabilities of the enterprise, divide the assets and liabilities on the benchmark date of enterprise evaluation into the following categories, and determine the range of assets and liabilities corresponding to the income forecast:
(1) main business assets and liabilities;
(2) Foreign investment and other assets and liabilities that have nothing to do with business operations or are assessed separately;
(3) Other non-operating assets and liabilities.
3. Analyze the macro factors, industry factors and individual factors that affect enterprise operation and income distribution;
4. Determine the expected income of assets and liabilities included in the income forecast range, and determine the net profit, net cash flow, income before interest and tax or other income forms as the expected income and make a forecast;
5. When assets and liabilities are terminated, the expected income corresponds to liquidation value;
6. Choose the discount rate that matches the forecast income;
7. Substitute the parameters of income method into the calculation model to calculate the discounted amount of income;
8. Summarize the discounted income and estimated value of the assets and liabilities of Category (2) and Category (3) that are not included in the income forecast, and get the estimated value of the income method.
It is suggested to hire an appraisal firm to conduct professional appraisal and issue an appraisal report, which not only meets the professional requirements, but also makes the calculation results more objective, accurate and authoritative. At the same time, the results of the report should be informed to the new shareholders who intend to participate in the shares in order to gain the trust and support of shareholders.