Profitability Drivers And Company Valuation Research

Along with the capital operation behavior such as company restructuring, the transfer of title of property, foreign investment, debt disposal has become increasingly active in our country, the company assessment has become a major theoretical and practical issues, and has attracted more and more attention by all fields of society. It is the premise and basis for the financial decision such as investment and financing,value trades, and also the need of maximization of enterprise value management.Compared with the securities market in western countries with 400 years history,China’s capital market is still exploring to develop, While the asset appraisal in our country began in the late 80 ’s, it has just started out. Alone with the continuous development of China’s securities market, and thus produce the assessment of company’s intrinsic value becoming mature over time, therefore we need more analyze of the relationship between company’s accounting information 、company value and stock price, from which to explore whether there is rule.Theoretical research is relatively lagging behind about the development of company evaluation in our country, the evaluation theory in practice are not objective and scientific, meanwhile there are questions as serious administrative intervention in environmental valuation, capital market is not developed, methods to estimate the value of company based on the foreign theoretical research has the obstacles in the application of our country.Under the socialist market economy, the establishment of modern enterprise system has become the trend, the competition mechanism of survival of the fittest becomes the law of enterprise development, enterprises have to maintain a high level of profits, to remain invincible in the competition. What are the company’s profitability drivers? How to use the value assessment theory to China’s international in the existing conditions? Dose profitability drivers have evolution to the company value and the stock price? How to find out the fundamental reason for the differences communication equipment manufacturing industry listing corporation earnings based on the analysis of profitability drivers? According to the above problems, this paper analysis profitability drivers and its’ financial indicators, research the profitability drivers and its’ accounting data explanatory ability for China’s corporatevalue based on the Ohlson model of and also the stock price, in order to improve the understanding the efficiency of China’s capital market, and analysis the using and utilization degree of profitability drivers by the market. At the same time, promote the residual income valuation theory and its’ model practical application and development in China.This article draw a conclusion through the empirical research based on communications industry listing Corporation :the profitability drivers have strong explain of The communications equipment manufacturing industry listing Corporation are, The advertising expending ratio, management cost, firm size, current asset turnover and cash flow debt ratio, quick ratio, accounts receivable turnover, sales cash ratio, liquidity ratio, capital growth rate and market share. And put forward the corresponding policy recommendations according to the empirical conclusion:(1)Strengthen the construction of marketing channels is an effective method to improve the company’s profit and value;(2)Strengthen the asset management is the favorable measures to improve the company profits and value;(3)attach great importance to intangible assets and human capital potential resources is the effective protection way to improve corporate profits and value.