Enterprise Value Assessment Of Pharmaceutical Company X Based On FCFF Model

With the continuous progress and development of society,the business management objectives of enterprises are constantly changing,from the initial profit maximization to enterprise value maximization.In the process of the evolution of management objectives,the concept of enterprise value management has emerged,and the theory of value assessment has been developed and has now formed a very complete system.In China’s investment market,the pharmaceutical industry has always been a hot spot for investment,and the stockholders’ enthusiasm for investment in the pharmaceutical industry has made the stock prices of pharmaceutical companies "go up".Therefore,how to calculate the enterprise value and whether the stock price is overvalued are hot topics of interest to investors.In this paper,we take X pharmaceutical industry as the research object for enterprise value calculation.First,we fully understand the development status of the pharmaceutical industry and the development characteristics of X Pharmaceutical Company itself,and find that X Pharmaceutical Company’s,as one of the leading pharmaceutical manufacturing companies,has bright financial data and promising business performance,but its debt is too low and its capital structure is defective.Then,we used FCFF model and value assessment as the theoretical support to build a suitable enterprise value assessment model for X-Pharma,based on which we calculated the value of X-Pharma and compared it with the market value on the base date.Finally,based on the goal of maximizing enterprise value,the FCFF model is combined with the value enhancement paths for pharmaceutical company X,which are reasonable control of R&D and sales expenses,adjusting the capital structure of the company and creating a value-oriented enterprise.Since the pharmaceutical industry in has been an investment hotspot in China’s capital market,residents’ investment enthusiasm is high and stock prices have been high.In the future,China’s pharmaceutical industry is affected by the government’s strict control and medical system reform,whether the enterprise value is in line with the market value,through the actual study of the value assessment of X pharmaceutical company,it can be concluded that the FCFF model is reasonable and scientific in the valuation of pharmaceutical companies,which brings practical reference significance to the valuation of future pharmaceutical companies.