Research On The Valuation Of BH Company

BH company is an unlisted and medium-sized enterprise whose main business is the production of automobile leaf springs.The article combines qualitative analysis and quantitative analysis,and conducts a valuation study on the overall value of BH company in accordance with the research ideas from theory to practice.Firstly,this paper overviews the relevant theories and methods of enterprise valuation,and then analyzes BH company’s situation from different levels,including macro environment analysis,industry situation analysis and company operating status analysis.And through the analysis of the applicability of its evaluation method,considering that whether investors or managers are more concerned about the future profitability of the company,this paper decides to use the enterprise free cash flow method,that is the FCFF model,to evaluate BH company.Focusing on the company’s future strategic planning,it closely integrates BH’s business analysis,financial analysis with free cash flow forecast,uses the CAPM model to obtain the corresponding cost of capital,and discounts the company’s future free cash flow to estimate the overall value of BH company as of December 31,2020.Then,the price-earnings ratio method and EV valuation method in the relative valuation method are used to compare the above valuation results to further illustrate the rationality and feasibility of using the FCFF model.Finally,the sensitivity analysis and scenario analysis are carried out around the value of BH company,and reasonable countermeasures and suggestions are put forward for the key driving factors found in the process of BH company value creation,in order to help enterprises improve the efficiency of operation and management,avoid BH company fall into a low-scenario in future development,and provide a certain degree of reference and guidance for enterprises in later investment and financing,as well as innovation and development.