Research On Value Evaluation Of Focus Media Based On Income Method

Thanks to the policy support for the development of cultural industry in the 13 th five-year Plan,the media industry has developed rapidly in the context of economic growth and increased market demand.In this industry,the economic activities of listing,mergers and acquisitions,restructuring and so on are gradually increasing.Based on this background,it is particularly important to accurately assess the value of the company in fair trade of the global market.Due to the imperfect development of China's capital market,the development of asset valuation theory is not systematic and comprehensive,media enterprises have the characteristics of light and physical assets and unstable income.It is difficult for such enterprises to evaluate.To the above situation,taking the representative Focus Media in the media enterprises as an example,through literature research,case analysis,quantitative and qualitative research methods,the free cash flow discount model in the income method is selected to evaluate the enterprise value of Focus Media.According to the annual report and financial statements from 2015 to 2017,a two-stage evaluation model is selected,with a forecast period from 2018 to 2022 and a perpetual growth period from 2023 to the following years.In the specific value assessment,the operating income is used as the driving factor,the future development trend of Focus Media will be judged based on the financial analysis and SWOT analysis,then the free cash flow will be predicted.The discount rate will be predicted by the weighted average cost of capital method.The cost calculation calculates the risk premium by the average of the Shenzhen Composite Index's yield and the geometric growth rate of the Shenzhen Composite Index,and then calculates the overall value of Focus Media.The value of the Focus Media Enterprise calculated by the average of the Shenzhen Composite Index growth rate was 103.56 billion yuan.The value of the Focus Media Enterprise calculated by the average of the Shenzhen Composite Index growth rate was 103.563 billion yuan.The value of the Focus Media Enterprise calculated by the geometric growth rate of the Shenzhen Composite Index was 89.48 billion yuan.Compared with the total market capitalization of Focus Media,which is reflected in the capital market of the benchmark day,it can be concluded that due to the relatively optimistic investment mentality of Focus Media at the time,there is a significant overestimation of its value in the benchmark day capital market.Through systematic analysis and research,the free cash flow discount model inthe income method is applicable to Focus Media,the results of the calculation of the geometric growth rate of the Shenzhen Composite Index can overcome the tendency of the average yield to be biased.On the basis of this research conclusion,this paper puts forward the following suggestions for Focus Media to enhance corporate value:(1)From the financial point of view,it can enhance value by expanding media points,controlling costs and optimizing capital structure;(2)From non-financial perspective Focus on core business,adhere to precision delivery and work with social media to increase its own value.In the future,the scientific and rationality of valuation can be improved through a combination of model correction or income method market approach.