Research On KH Enterprise Value Assessment And Promotion Based On Free Cash Flow Method

With the development of economy,the objectives of business management are constantly changing.The maximization of enterprise value replaces the profit maximization,which becomes the new core of management in the process of enterprise operation.Enterprise value evaluation and analysis is not only important for outside investors,but also becomes a financial analysis tool for internal managers.The enterprise value is the present value discounted at a reasonable discount rate.The enterprise's free cash flow is the wealth in the process of enterprise management activities.It can effectively reflect the long-term development potential of listed companies when it measures the company's operating performance and investment value.Therefore,how to make an objective evaluation and propose value improvement strategies according to the existing problems of the enterprise becomes the key point and difficulties in the process of enterprise management.The thesis reviews the related literature,and expounds the related concepts,characteristics and the procedures of enterprise value evaluation.By introducing several common approaches to value evaluation,it highlights the advantages of using the method of free cash flow to assess enterprise value.By Researching a complete case—KH company's historical data,this thesis introduces the basic situation of this company from several aspects of the industry development environment,the core competitive advantage and risk.And this thesis analyzes the financial situation from several aspects of the company's solvency,operating capacity and profitability.On the basis of forecasting the free cash flow and discount rate,the thesis evaluates the value of the enterprise by forecasting the sales growth rate over the next 20 years.Aim at the industry characteristics and the current situation of KH company,the thesis grasps the key point of enterprise value promotion strategy and uses the value driving factor sensitivity analysis to enhance the enterprise's value from two aspects of financial factors and non-financial factors.Compared with the traditional pharmaceutical industry,the bio-pharmaceutical industry has the characteristics of high risk and high income.It plays an important role in the national economy and it becomes a new economic growth point and the focus of investment in China.Therefore,the enterprise value evaluation and promotion in this industry,especially the valuemanagement of listed companies,is of great significance to China's bio-pharmaceutical industry.