Research On Value Evaluation Of L Electrical Appliance Enterprises Based On Residual Income Model

In the context of the “Belt and Road” policy and in-depth supply-side reforms,home appliance companies are also actively deploying this market full of opportunities.However,as the country gradually strengthens the control of the real estate industry,this has directly led to the closely related Chinese home appliances.The rapid growth of the market has gradually declined.At this moment,for investors and managers of the company,they urgently want to understand the intrinsic value of the company,and then better manage the investment and effectively increase the value of the enterprise.Selecting an appropriate value evaluation method is urgently needed to be resolved.At present,the traditional methods of corporate value evaluation are: cost method,market method,income method and option pricing method.Although these methods have a guiding role in assessing the value of enterprises to a certain extent,they are limited by reasons such as the lack of completeness of the securities market and the difficulty of estimating parameters,and have the disadvantage of inaccurate prediction results.The residual income valuation model solves the above problems well,especially when combined with financial indicators,it simplifies the determination of parameters,makes full use of the company’s financial data,and makes up for the shortcomings of traditional valuation methods.This article takes the L appliance company as an example to first introduce the meaning of enterprise value and related classic theory,and then introduces the current common methods of enterprise value evaluation and residual income valuation models.Secondly,by introducing the basic situation of L Electric Company and analyzing the current problems and reasons of the company’s value evaluation,the advantages of introducing the residual income valuation model are explained again,and the applicability of this method is analyzed.Finally,the enterprise value of L Electric Company was calculated in detail by using the residual income valuation model.Compare the evaluation results with the company’s book value and the results under the price-earnings ratio method,then conduct a sensitivity analysis to explore the factors affecting the value of the company,and finally carry out a strategic analysis of the increase in the value of the L enterprise.Finally,This article draws three conclusions based on the study of the value of L appliance companies.First,using the improved residual income model compared with the results of the price-earnings ratio model,the former is more advantageous and can scientifically assess the ability of the company to create value.According to the sensitivity analysis,the lowest value of L Electric Company’s enterprise value is 173,934,811,892.04 yuan,the highest value is 337,392,379,407.64 yuan,and the most likely value is 271,196,211,374.20 yuan.Second,the intrinsic value of the L electrical appliance enterprise is highly sensitive to the net operating income margin,the cost of equity capital,and operating income,but weakly sensitive to the equity multiplier and asset turnover.Third,based on the company’s business strategy,operating conditions,and the model,several strategies for improving the value of the company are proposed.