A Case Study Of TR Company Enterprise Value Evaluation Based On Improved DEVA Model

In recent years, with the quick spread of the internet and the rise of emerging internet business model,the rapid development of China’s internet companies is taking place. Their high price to earnings ratio and fast expansion have caused widespread acknowledgement. In order to be able to obtain rapid development, entrepreneurial companies rely on high risk investment and industrial capital support. Since internet start-up companies are different from the traditional companies-- with intangible assets,development of unprecedented features-- the use of traditional valuation methods has some limitations. Therefore, a correct method of valuing internet start-up companies is particularly important.This paper first introduces the characteristics and current situation of the valuation of internet enterprises in China. Through the analysis of traditional assessment methods and models,the author sheds light on the limitations of the current valuation model. The author creates the DEVA model for the evaluation of Internet start-up companies. After introducing the basic principle of the DEVA model and correcting the initial model, this paper points out that this model is more suitable for the valuation of internet start-up companies. Then the author introduces the Dunbar theory and explains its influence on the internet industry. The theory allows the DEVA model to correctly choose the relevant input parameters. In this example, this article describes the background of a TR company,analyses the reason the company is profitable due to high volume of user information,and explains why the DEVA model is more suitable to assess this company. Based on the historical data of the company and the outlook of with the industry, the model forecasts the business operations in the next five years. Then a comparison is made using the DEVA model results with the actual market value of the company. At the same time, the income method is used to calculate the value of the TR company, and the difference between that valuation result and the improved DEVA model result is calculated and analyzed. The conclusion shows that the improved DEVA model is more applicable for the valuation of internet start-up businesses.Based on the above analysis, the article concludes that DEVA model is more suitable for Internet start-up company valuations. Finally, the article provides a forward looking view of the development of enterprise valuation models. The author believes that user valuations will be a key component in start-up valuations. With the continuous development of the Internet industry, improved DEVA models will more widely used in the future.