Research On The Evaluation Method Of Target Enterprise Value In Merger And Acquisition

M & A is the trend of historical development,and it is also an effective way to improve the market competitiveness in the short term.In 2015,both the absolute numbers of mergers and acquisitions and the absolute amounts or the transaction amounts of the average single event had rapid growths,which were 3 times,6.8 times and nearly 2 times of2014's.It realized a tremendous development.But facing such fierce competitions in the merge activities,failure rate is relatively high,and the results of transactions are not all satisfying.The main reason is that the estimation of target enterprise value is too high or too low.So,how to reasonably and accurately assess the value of the target enterprise is the key problem in the enterprise merger and acquisition.The essence of value evaluation is actually the application of the value evaluation method,so to study the target enterprise value evaluation methods,can not only improve the accuracy of the value evaluation of mergers and acquisitions,also can make up the deficiency of existing evaluation methods,improve the enterprise value evaluation theory,so as to promote the smooth progress of mergers and acquisitions.The paper takes target enterprise value evaluation of mergers and acquisitions as the research object,aiming at the existing problems in the application of the traditional value evaluation methods,analyzes the value connotation of the target enterprise,explores the source of enterprise value,introduces a failure probability factor,and establishes the evaluation model of target enterprise value in merger and acquisition.Then,applying evaluation model in case of mergers and acquisitions.Finally,the paper summarizes the research results and conclusions.First of all,we refer to relevant literature about merger and acquisition theory and value evaluation theory,analyze and combed domestic and foreign research's situation,and confirm the research contents and methods of this paper.Secondly,we summarize the relevant theory of value evaluation and mergers and acquisitions,including the concept,type and motivation of mergers and acquisitions,and introduce the concepts and characteristics of enterprise value evaluation,as well as analyze the importance of enterprise value evaluation in merger and acquisition.Thirdly,we expound the specific contents of the market method,income method and cost method these three kinds of evaluation methods,and take comparison and analysis of them from application premises,advantages and disadvantages and application scopes these three aspects.We summarize application status of the value evaluation methods of China's enterprise merger and acquisition,and analyze main problems of traditional methods' application in our country from internal and external environment these two aspects.Fourthly,based on the above theory overviews and problems analysis,we explore the value's connotation of the target enterprise,and find that it mainly consists of three parts,namely,the intrinsic value of the enterprise,the synergy value of the enterprise and the option value of the enterprise.Then we introduce a failure probability factor,construct the value evaluation model in enterprise mergers and acquisitions,and analyze the factors that need to be considered in the application of value evaluation model.Finally,combined with case of merger and acquisition,we apply the enterprise value evaluation model practically,which verifies the applicability of the model.