Research On The Evaluation Model Of Corporate Equity Value Based On Residual Income

Over the past years,China has actively promoted new energy vehicles for the purpose of promoting energy conservation and emission reduction and reducing dependence on oil imports.After receiving the support of national policy,new energy vehicles and their industrial chain have been developing rapidly.In the foreseeable next ten years,the prosperity of new energy vehicle related industries will continue to rise.Based on such a certainty,lithium industry,as a significant role of its upstream industry chain,has received key attention from the capital market.At present,with the growing of new energy vehicles industry,the stock prices of listed companies which are related to lithium industry have also risen a lot.In this context,the necessity of equity valuation assessment of listed companies related to lithium industry is further highlighted.This paper selects Ganfeng Lithium as the case to find a more suitable valuation model for this kind of enterprises through assessing the equity valuation of Ganfeng Lithium.First of all,this paper sorts out the research literature related to enterprise value assessment,including the research results which are related to residual income model and enterprise value assessment.Through literature review,it provides ideas for the selection and improvement of the following models.Secondly,the paper elaborates the relevant concepts of enterprise equity value,introduces four general methods of enterprise value assessment represented by cost method,market method,income approach and real option method,and pays close attention to the concept of residual income model.Furthermore,the paper introduces the operation situation of Ganfeng Lithium and then carries out the financial analysis of Ganfeng Lithium,to find a more suitable equity valuation assessment mothod for the company--residual income model.The paper improves the original model by introducing Du Pont Analysis method and Price-to-Book Ratio at the end of accounting period to solve the defects of related models.Finally,the paper uses the improved residual income model to calculate the equity valuation of Ganfeng Lithium,and compares and analyzes the valuation results with the results which are obtained from residual income model before improvement.The comparison results show that the real equity valuation of Ganfeng Lithium can be better reflected in improved residual income model.Finally,by summing up the case,this paper believes that the residual income model which is improved is more suitable for the equity valuation assessment of Ganfeng Lithium.The subjective influence in the assessment process can be effectively reduced and the defect of going-concern assumption can be solved by the improved model.A reference for the improvement of residual income model which is in specific application fields is provided by the research results of this paper.It is conducive to make investors’ investment decisions more reasonable.It is also conducive to the companies which are about to M&A target company to conduct its reasonable valuation,which can effectively control the merger risk.At the same time,it can be used as a reference for other listed companies in lithium industry.