Analysis Of Enterprise Value Based On Economic Value Added

At present,people regard the maximization of enterprise value as the main goal of enterprise operation and management–all kinds of operation strategies and management behaviors implemented by enterprises eventually aim to realize the maximization of enterprise value.For enterprises,value management is an effective way to achieve continuous operation.Enterprise Valuation Method is one of those tools to measure enterprise value,which can,by analyzing and solving the related factors in the whole evaluation process,carry out better enterprise value management and realize shareholder value maximization.EVA financial indicators provide a most effective way for enterprise value management.Based on the perspective of Economic Value Added,by decomposing and analyzing the factors affecting the value of the enterprise,it can help the enterprise to identify the problems of value growth,and thus propose more targeted measures to enhance the value of the enterprise.Till now,most commonly used methods of enterprise value assessment include: Asset Valuation Method,Market Approach,and Discounted Cash Flow Method.Enterprise Valuation Method based on economic value added is an extension of the Discounted Cash Flow Method,which can reveal the ability to develop long-term business of enterprise in the value assessment in a better way,therefore it presents itself as a powerful complement to the original Enterprise Valuation Method.Foshan Lighting is taken as a case company in current paper,which starts the whole studies based on the idea of “Case Introduction – Enterprise Value Evaluation – Enterprise Value Analysis – Suggestions for Enhancing Enterprise Value”.The introduction part analyzes and classifies the main business,decomposes the business process of the enterprise,development trend of the lighting industry and new competitive opportunities,and analyzes the status of the case company in the industry overall.In the enterprise value assessment part,based on the basic theory of Income method assessment,current situation of the lighting industry,and future prospect of China's macroeconomic environment,the three-stage evaluation model is used here to construct the Foshan lighting enterprise value evaluation model,comparing the evaluation results and the market value of the enterprise,so that to verify the applicability of the assessment method.In the enterprise value analysis part,first of all,writer uses the EVA calculation method to inspect the economic growth of the case company from 2013 to 2017.From the in-depth analysis of the 3 value-influencing factors: Net operating profit after tax,Capital occupation,and Weighted average cost of capital,the shortcomings of Foshan Lighting Company in value management and creation are found.Through analysis,it is also known that Foshan Lighting Company has 4 shortcomings in value creation:(1)weak growth in operating income;(2)limited reinvestment in main business;(3)low turnover rate of inventory,fixed assets and receivable accounts receivable;(4)insufficient use of creditor capital.As mentioned as all above,this dissertation aims to put forward corresponding suggestions based on the current development of the industry.