A Study On EVA Method For Business Valuation Improved By Monte Carlo Simulation

China’s film and television industry began in 1922 and has a history of nearly 100 years.Now the industry is gradually developing towards standardization and maturity.Internally,the development momentum of China’s film and television industry is good,and Chinese films have made excellent achievements in terms of output and social response;Externally,it has also been expanding in the international market,which has played a positive role in showing China’s cultural soft power.While the film and television industry is booming,it is reflected in the increasing scale and number of film and television companies,and the company’s turnover is also rising frequently.With the vigorous development of the film and television industry,film and television companies have frequent activities such as financing,listing,M &A and reorganization.However,in recent years,the film and television industry has faced a lot of variables.The emergence of the "Yin-Yang contract" in 2018 has attracted the attention of the state to the standardization of the film and television industry,and the policy has begun to focus on the strict standardization of the film and television industry.The outbreak of the epidemic at the end of 2019 has accelerated the market clearing.On the occasion of the founding anniversary of the People’s Republic of China and the founding anniversary of the party,the production types of products of major film and television companies have been limited.Under various difficulties,The development prospect and operating performance of the surviving film and television companies have attracted extensive attention from all parties in the capital market,and the value evaluation of film and television companies has gradually attracted people’s attention.As for Huayi Brothers,China’s first listed film and television company,although the cold winter in the industry has not passed yet,the company has ushered in significant improvement in business and capital in 2020,and the leading position can be recovered gradually.On the business side,with the advantages of rich industry,human resources and project production experience accumulated by the company since its establishment,it is expected that the company will continue to play its main business again,and the box office performance of heavyweight films will be considerable after they are released.In terms of capital,Huayi Brothers has eight heavyweight war investment companies including Alibaba film and Tencent computer,which has solved the capital problem generally worried by the market and proved the excellent quality of the company from the industry level.From the perspective of valuation,Huayi Brothers has valuation difficulties such as unstable income,light assets,few comparable companies and high uncertainty,which restricts the use of traditional valuation methods,and the more applicable EVA model in practice also has deficiencies.Therefore,this paper introduces Monte Carlo simulation to improve the EVA model,and quantifies the uncertainty in the valuation process with the help of crystal ball software.This paper first applies the traditional EVA model to evaluate Huayi Brothers,then analyzes the shortcomings of the EVA model in the valuation process,and then uses the probability distribution of key parameters simulated by historical data with the help of software to re evaluate the enterprise value of Huayi Brothers instead of the traditional two-stage evaluation model,and compares the two evaluation processes and evaluation results,The advantages and disadvantages of the improved EVA model are discussed.In order to improve the accuracy of simulation,the simulation times are set to 5000 times to ensure that the results are more objective and reasonable.From the valuation results,the interval results contain more information than the point results.For investors,they can more rationally judge the investment value of Huayi Brothers and make prudent investment;For managers,they can timely adjust the enterprise’s strategy,defuse risks,deal with the environment and continue to operate,so as to improve their own value.