Research On Improvement Of Value Evaluation Of XG Company Based On Income Method

With the country's comprehensive deepening of the medical industry reform,the pharmaceutical industry has experienced a rapid development.M&A,restructuring,investment and other property rights trading activities among many small and mediumsized enterprises in the industry are increasingly frequent.Enterprise value assessment uses a scientific method to measure the overall value of the company.The accuracy of the evaluation results directly affects whether the M&A activity between investors and operators can proceed smoothly.Therefore,the accuracy and scientific of the evaluation results are crucial.In the practice of enterprise value assessment,the income method has been accepted by the majority of appraisers in practice,and it is also widely used.However,due to the inherent defects of the model,it is not very suitable when using traditional models to evaluate non-listed companies.So,it is of great significance to strengthen the research on the improvement of traditional models to make them more in line with the actual situation.This paper combines inductive analysis,qualitative and quantitative analysis and case analysis.The paper analyzes the defects of the traditional free cash flow discount model(hereinafter referred to as FCFF model)in the value evaluation of XG company based on the actual situation.The defects include the discount rate of immobilization and the impact of uncertainties in the internal and external environment of the firm on the perpetual cash flow.It makes the evaluation results of the traditional FCFF model less accurate.In view of the above problems,this paper proposes the dynamics of the discount rate and the introduction of Monte Carlo simulation to consider the influence of the uncertainty factors of the perpetual period,and analyzes the applicability and feasibility of the improved model.By determining the debt and equity funds that XG needs to raise,we will determine the different capital structures in the future and make the weighted average cost of capital dynamic.In addition,all the influencing factors of the perpetual free cash flow were analyzed by means of sensitivity analysis.The key influencing factors of the perpetual period were determined as the variables studied.The distribution of key variables was tested by K-S test.The Monte Carlo simulation is used to simulate multiple times according to the set model,and the simulation results of the present value of the perpetual cash flow are finally expressed by the interval value,which makes the evaluation result more scientific and reasonable.Finally,the evaluation results of the improved model are analyzed and compared.