The Design And Application Of Business Information Analysis System For Income Approach Based Business Valuations

Nowadays there are a large number of business valuation researches in the domestic and international valuation community and financial sector. Among the researches, the formation of the valuation standards system principally guides the business valuation practices. However, many practical problems remain to be answered by valuation practitioners. One of the most important practical problems is how to integrate the analysis of business information during the valuation process into specific valuation model "inputs", which means assumptions and parameters required by particular valuation models. Every valuation process can be seen as an information processing process that analyses the underlying asset information and produce valuation results through valuation models. Only analyzing business information in isolation is not enough, the key point is to closely and logically link the information analysis at this stage and subsequent valuation model inputs. Taking into account the income approach’s theoretical advantages and its increasing popularity in evaluation practice, this article focuses on designing a business information analysis system which is suitable for income approach based business valuations. This system serves the analysis of parameters and growth patterns forecasting required by the many valuation methods within the income approach.This paper studies the domestic and foreign business valuation standards and other business valuation literatures, combined with knowledge of related fields such as strategy, management, accounting, finance, and finally build a convenient to use business information analysis system based on solid theory, which follows valuation standards and linked logically. First, referring to the theory of financial reporting and financial principles, tools, and construction to adjust the standard financial reporting analysis and analysis of value creation of the adjusted financial information financial information analysis modules, handle this financial information analysis. Second, the reference to analysis tools such as strategic management, building on the underlying business environment, business models, functions for analysis of corporate non-financial information analysis module; solve the problem analysis of non-financial information. Third, the use of financial information, analysis and analysis of non-financial information on business understanding, build valuation models select modules specific assessment method selected in the profit approach and set its algebraic form, address valuation model selection problem. Fourth, use the financial information analysis and non-financial information analysis to understand and consider the valuation model is selected, predictive modeling setting module, set the required valuation model for prediction of parameters and their functional relationship between to solve valuation model parameters to predict problems. Fifth, shown in specific cases based on these four modules in the valuation process of composition analysis of business information system, financial information analysis and analysis results into non-financial information required by a particular valuation model income, the ultimate solution to problem of information to enter into the valuation model of business value.