On Valuation Method Of Internet Companies

The value of an Internet business is based on the services or virtual products it provides,and its main value is the value of user experience.Therefore,the degree of user acceptance of the experience will determine the end result of the value realization of the Internet company.Moreover,the Internet industry is highly competitive,and users' various needs are faced with extremely rich choices.Therefore,the value of the enterprise should be evaluated from the perspective of user resources owned by Internet companies.Internet company performance has experienced explosive growth and discontinuous growth,and the profit model and corporate strategy have a huge impact on company value.Accounting standards,financial statement analysis methods and the method of valuation of the company should keep pace with the times so that it can meet the needs of economic development.Traditional valuation methods,which do not apply to the Internet,can lead to erroneous valuations and many adverse effects.As far as China is concerned,the overall value of Internet companies is largely influenced by the choice of corporate profit models.If the idea of embedding profit factors in the profit model is embedded in the enterprise value assessment,it will be more conducive to improving the accuracy of the enterprise's profitability assessment.Therefore,the profit model is an important part of the enterprise value assessment.The enterprise value assessment based on the profit model undoubtedly has sufficient theoretical and research significance.According to the specific situation of Xiaomi Group,this paper analyzes the characteristics of the valuation of Internet companies and the particularity of financial status,and innovates existing valuation methods.First this paper analyzes the financial status of Xiaomi Group,focuses on the areas that may be controversial and gradually determines the way to deal with problems in the value assessment process.The evaluation of the profit model is relatively large,not only because of the inherent non-specificity of the enterprise's profit model,but also because the business activities of the companies are complex and highly variable.Therefore,in order to study and research the profit model of the enterprise,it is necessary to establish certain assumptions and form a strict value model based on profit model.Then,this paper combines user value,enterprise value and enterprise profit in the valuation of Xiaomi Group,and analyzes the construction idea of user value model.Based on the user,the original discounted cash flow model is improved to the user.User value is measured at the current value of the cash flow or profit contributed by the company from the beginning of the first use of the product to the last use of the product at a discounted rate.Among them,the number of users is measured by the number of active users,and the historical data is substituted into the model for least squares regression,and the coefficients obtain a model of user value.Then,calculate the corporate value and corporate profits.User value,enterprise value and corporate profit are given weights by 30%,40% and 30%,and finally the value based on the profit model is obtained.Then,the valuation results will be compared with the market value of Xiaomi Group and the results of other valuation methods.It is believed that the improved method can better evaluate the Internet companies.The powerful complement of the value method and the related suggestions make the method better applied to the actual situation.Finally,the limitations of the method are pointed out,and it is hoped that the direction of future research can be pointed out.Based on the characteristics and value sources of companies in the Internet industry,this paper uses the valuation model based on the profit model to evaluate Xiaomi Group,which can better reflect its value from the results.On this basis,the method can also provide advice for Internet companies to manage user value.I hope this thesis can provide another new idea for future research.Through the evaluation of the company's value of Xiaomi,this paper helps the company's executives find its longterm and shortcomings,make scientific decisions,and truly achieve the goal of maximizing the value of the company.At the same time,it can also help investors to make objective and accurate decisions on listed Internet companies.Judging and evaluating,select companies with stronger competitiveness to invest.In addition,the correct value assessment is instructive for mergers and acquisitions between Internet companies and other companies.It also helps to implement the government's support and control policies for Internet companies and define the scope for their implementation.Based on this premise,this method can also make Internet companies pay more attention to the value of users and manage user resources more scientifically.