1. Business license and tax registration certificate of enterprise legal person, organization code certificate, business license, property right registration certificate of state-owned enterprise, etc.
2. Brief introduction of the enterprise, establishment background, legal representative and main members of the management team, organization chart and equity structure chart;
3. Articles of association and legal documents related to enterprise property rights;
4. Legal documents that may involve the change of enterprise property rights (equity), such as enterprise asset reorganization plan, enterprise merger, joint venture and cooperation agreement (letter of intent);
5. Legal documents related to major creditor's rights and debts such as economic guarantee and debt mortgage provided by enterprises;
6 annual and semi-annual work summary of the enterprise;
7 government documents related to the production and operation of enterprises;
8. The annual financial statements and annual financial analysis reports of the enterprise in the last five years (including the evaluation benchmark date), and the statistical data of the products produced and operated;
9. Overview of the existing production facilities and supply and marketing network of the enterprise, and brief introduction of the production and operation of each branch;
10. Enterprise product quality standards, trademark certificates, patent certificates and technical achievement appraisal certificates, etc. ;
1 1. Enterprise development plan for the next five years;
12. Enterprise income forecast in the next five years (Table C) and forecast description;
13. Statistics of intangible assets invested by enterprises over the years (including advertising fees, participation fees and other expenses); List of major customers and competitors;
14. Production and operation mode of the enterprise (including operating advantages and main risks);
15. Information materials such as reports and opinions of news media and consumers on product quality and after-sales service;
16. certificate of honor of enterprise and certificate of honor of legal representative;
17. Corporate image publicity, planning and other related materials;
18. Brief introduction of enterprise's existing technology research and development and technology innovation plan;
19 Articles of Association of all long-term investments, business license of the invested enterprise as a legal person, base date and accounting statements of the previous three years;
20. Information that other enterprises think should be provided;
2 1. Enterprise Commitment Letter; .
22, enterprise non-operating assets inventory materials;
Enterprise value evaluation method
Reasonable evaluation of the value of the target enterprise is one of the very important problems often encountered in the process of mergers and acquisitions and foreign investment. Appropriate evaluation method is the premise of accurate evaluation of enterprise value. This paper will analyze and summarize the basic principles, application scope and limitations of these methods around the core methods of enterprise value evaluation.
First, the enterprise value evaluation method system
Enterprise value evaluation is a comprehensive asset and equity evaluation, which is a process of analyzing and estimating the overall value of the enterprise, the equity value of all shareholders or part of the equity value under a specific purpose. At present, the international evaluation methods are mainly divided into three categories: income method, cost method and market method.
The income method determines the value of the appraised object by capitalizing or discounting the expected income of the appraised enterprise to a specific date. Its theoretical basis is the discount theory in economic principles, that is, the value of an asset is the present value of the future income that can be obtained by using the asset, and its discount rate reflects the rate of return of the risk of investing in the asset and obtaining income. The main methods of income method are cash flow discount method (DCF), internal rate of return method (IRR), CAPM model and EVA valuation method.
Based on the balance sheet of the target enterprise, the cost method determines the value of the evaluation object through reasonable evaluation of the assets and liabilities of the enterprise. Its theoretical basis is that the price paid by any rational person for an asset will not be higher than the price of replacing or buying a substitute with the same purpose. The main method is replacement cost method (cost additive process).
Market method is to compare the appraisal object with equity assets such as enterprises that can be referenced or have transaction cases in the market to determine the value of the appraisal object. Its application is based on the assumption that in a complete market, similar assets will have similar prices. The commonly used methods in market law include reference enterprise comparison method, merger case comparison method and price-earnings ratio method.
Figure 1 Enterprise Value Evaluation Method System
Income method and cost method focus on the development of enterprises themselves. The difference is that the income method focuses on the profit potential of enterprises and considers the time value of future income. This is a method based on the present and looking forward to the future. Therefore, the income method is more suitable for growing or mature enterprises with stable and lasting income. The cost rule is to truly consider the existing assets and liabilities of the enterprise and to truly evaluate the current value of the enterprise. Therefore, when it involves holding enterprises that only invest in or own real estate, and the evaluation premise of the evaluated enterprise is unsustainable, the cost method should be adopted for evaluation.
Different from income method and cost method, market method shifts the focus of evaluation from the enterprise itself to the industry, and completes the transformation of evaluation method from internal to external. The market method is simpler and easier to understand than the other two methods. Its essence lies in seeking suitable benchmarks for horizontal comparison. In the case that the target enterprise belongs to the development potential type and the future income is uncertain, the application advantage of market method is outstanding.
Second, the core method of enterprise value evaluation
1, cash flow discount method (DCF) focusing on the time value of money.
The cash flow created by enterprise assets is also called free cash flow, which is created by asset-based business activities or investment activities in a period of time. However, the future cash flow has time value. When considering the inflow and outflow of forward cash, it is necessary to eliminate its potential time value, so it should be discounted at an appropriate discount rate.
Figure 2 DCF cash flow diagram is shown in Figure 2. If t0 is the start date of the project, the discounted cash flow of the project is.
Therefore, the key of DCF method lies in the determination of future cash flow and discount rate. Therefore, the application premise of this method is the sustainable operation of the enterprise and the predictability of future cash flow. The limitation of DCF method is that it can only estimate the value of open investment opportunities and cash flow generated by the future growth of existing business, without considering various investment opportunities in uncertain environment, which will largely determine and affect the value of enterprises.
2. Zero return internal rate of return.
Internal rate of return is the discount rate that makes the net present value of enterprise investment zero. It has some characteristics of DCF method and is most commonly used to replace DCF method in practice. Its basic principle is to try to find a numerical value to summarize the characteristics of enterprise investment. The internal rate of return itself is not affected by the interest rate of the capital market, but depends entirely on the cash flow of the enterprise, which reflects the internal characteristics of the enterprise.
The internal rate of return method can only tell investors whether the evaluated enterprise is worth investing, but it doesn't know how much it is worth. Moreover, the internal rate of return method is just the opposite when facing investment-oriented enterprises and financing-oriented enterprises: for investment-oriented enterprises, when the internal rate of return is greater than the discount rate, the enterprise is suitable for investment; When the internal rate of return is less than the discount rate, the enterprise is not worth investing; Financing companies are not.
Generally speaking, for the investment or merger of enterprises, investors want to know not only whether the target enterprise is worth investing, but also the overall value of the target enterprise. The internal rate of return method can not meet the latter, so this method is more used in single project investment.
3. CAPM model of risk asset valuation in complete market.
Capital Asset Pricing Model (CAPM) was originally designed to evaluate risky assets (such as stocks). However, the value of stocks depends to a great extent on the risk of earning profits after buying stocks. Its nature is similar to venture capital, which discounts the future income according to the risk return rate. Therefore, CAPM model can be used to determine the discount rate of venture capital projects when evaluating stocks.
Under the framework of general economic equilibrium, assuming that all investors make decisions with the utility function of returns and risks as independent variables, the specific form of CAPM model can be derived:
The seemingly complicated formula actually contains a very simple truth. The expected rate of return of assets depends on the risk-free rate of return, the market portfolio rate of return and the correlation coefficient. Among them, the risk-free rate of return is the rate of return when investing in the safest assets such as deposits or buying government bonds; Market portfolio yield is the weighted average yield of all securities in the market, which represents the average income level of the market; Correlation coefficient indicates the correlation between the assets purchased by investors and the overall market level. So the essence of this method is to study the correlation between a single asset and the market as a whole.
The derivation and application of CAPM model have strict premises, and there are strict regulations for the market and investors. On the premise that China's securities market needs to be further improved, the application of CAPM model is limited to some extent, but its core idea is worth learning and popularizing.
4. EVA evaluation method of capital opportunity cost is added.
EVA (Economic Value Added) is an important indicator to evaluate the operating conditions and performance of enterprises abroad in recent years. Introducing the core idea of EVA into the field of value evaluation can be used to evaluate the value of enterprises.
In the evaluation method of enterprise value based on EVA, enterprise value is equal to investment capital plus present value of future EVA, that is, enterprise value = investment capital+present value of expected EVA.
According to Stern? According to Lester's explanation, EVA refers to the difference between the capital income and the opportunity cost of capital. Namely:
EVA= after-tax operating net profit-total cost of capital = investment capital × (return on investment capital-weighted average cost of capital rate).
EVA evaluation method not only considers the capital profitability of enterprises, but also deeply understands the opportunity cost of enterprise capital utilization. By introducing opportunity cost into the system, the ability of enterprise managers to select projects from the optimal scheme is investigated. However, grasping the opportunity cost of enterprises has become the focus and difficulty of this method.
5. Replacement cost method conforming to the law of "1+ 1=2"
The replacement cost method regards the evaluated enterprise as a combination of various production factors. On the basis of checking and verifying all assets, evaluate all identifiable assets one by one to confirm whether the enterprise has goodwill or economic losses. After adding the estimated value of each identifiable asset to the total, you can get the estimated value of the enterprise. That is, the overall asset value of the enterprise = ∑ single item can definitely refer to the asset evaluation value+goodwill (or-economic loss).
The most basic principle of replacement cost method is similar to the equation "1+ 1=2", which holds that enterprise value is a simple addition of individual assets. Therefore, a major drawback of this method is that it ignores the synergistic effect and scale effect between different assets. That is to say, in the process of enterprise management, it is often "1+ 1 > 2", and the overall value of the enterprise is greater than the sum of the individual asset evaluation values.
6. Reference focuses on the comparison method of enterprises and M&A case.
Referring to enterprise comparison method and merger case comparison method, by comparing with the benchmark object of the evaluated enterprise in the same industry or similar industries and positions, the financial and operating data are obtained for analysis, and multiplied by the appropriate value ratio or economic indicators, so as to obtain the value of the evaluated object.
But in reality, it is difficult to find a benchmark object with the same risk and structure as the assessed enterprise. Therefore, reference enterprise comparison method and merger case comparison method generally split different aspects of enterprise value performance according to multiple dimensions, and determine the weight according to the correlation between each part and the overall value. That is, the appraised enterprise value =(a× appraised enterprise dimension 1/ benchmarking enterprise dimension 1+b× appraised enterprise dimension 2/ benchmarking enterprise dimension 2+…)× benchmarking enterprise value.
7. Price-earnings ratio multiplier method for market value evaluation of listed companies.
The multiplier method of P/E ratio is specifically aimed at evaluating the value of listed companies. The stock price of the appraised enterprise = the average price-earnings ratio of the same type of company × the earnings per share of the appraised enterprise.
Evaluating the value of an enterprise with the P/E multiplier method requires a relatively perfect and developed securities trading market and a sufficient number of listed companies with complete industry sectors. Because China's securities market is far from perfect, and there are great differences in the equity setting and structure of domestic listed companies, the P/E multiplier method is only an auxiliary system for enterprise value evaluation at this stage, and it is not suitable for the whole enterprise value evaluation as an independent method for the time being. But in foreign markets, the application of this method is relatively mature.