The value of an enterprise is determined by what and what determines its value

The value of a business is the expected free cash flow of the business with its weighted average cost of capital.

It is the present value discounted by the discount rate, which is closely related to the financial decisions of the enterprise and reflects the time value of the enterprise's funds.

risk and the ability to continue to develop. Expanding to the field of management, enterprise value can be defined as the enterprise following the law of value.

Through value-based management, all stakeholders (including shareholders, creditors, managers, ordinary employees, etc.) can obtain satisfactory returns. Obviously, the higher the value of a business, the higher its ability to give returns to its stakeholders. And this value can be measured by its economic definition.

1. The relationship between the strategy and the cash flow of investment activities in the cash flow statement.

Strategy determines cash flow from investment activities. The execution of the company's strategy first requires investment activities to be implemented.

Investment activities in a broad sense refer to the resource allocation of a company, including long-term assets such as fixed assets, intangible assets, and equity, and operating assets such as cash, inventory, sales channels, and advertising investment.

Investment activities in the narrow sense refer to items defined in cash flows.

There are many items with cash flow from investment activities, which can be divided into two categories, one is financial investment activities, and the other is cash flow from strategic investment activities.

Wealth management investment activities have little impact on the company's long-term development. For companies, the long-term strategy is reflected in structuring activities (structuring and disposing of fixed assets, intangible assets, etc.) and mergers and acquisitions (acquiring subsidiaries and disposing of subsidiaries), as well as equity investments in strategic associates and joint ventures.

The efficiency of investment decisions is measured by net present value, embedded rate of return, and investment period.

2. The relationship between the strategy and the cash flow of financing activities in the cash flow statement.

Strategy dictates investment, and investment requires financing to make it happen.

Broad financing includes equity financing, debt financing, and endogenous financing. Endogenous financing refers to the increment of the company's economic activities in excess of the initial investment.

Financing activities in the narrow sense refer to those financing activities as defined in the cash flow statement.

There are many items in the cash flow statement of financing activities, which can be divided into two categories: one is the flow statement of cash flow activities for equity financing, and the other is the cash flow of debt activities. Financing activities need to consider five major issues: capital cost, capital structure, financing sequence, financing period, and financing timing.

3. The relationship between investment activities and assets.

Investment activities determine the structure of assets and the quality of assets.

Generally, the company's assets include three categories, financial assets (long-term bank deposits, trading financial assets, held-to-maturity investments, financial assets available for **, long-term real estate measured at fair value, etc.), long-term equity investments of associates and joint ventures, and the company's operating assets include long-term operating assets (fixed assets, construction in progress, intangible assets, R&D expenditures, goodwill, long-term amortized expenses) and working capital requirements (working capital assets minus working capital liabilities).

5. The relationship between fund-raising activities and capital.

Financing activities form debt funds and equity funds, and different financing decisions and activities lead to different capital structures and capital costs.

The capital structure includes short-term debt, long-term debt, and shareholders' equity.

The relationship between asset structure and capital structure is conservative, aggressive and compatible.

Matching is that long-term capital ** meets long-term capital needs, short-term capital ** meets short-term capital needs, and aggressive type is short-term capital ** to meet part of long-term capital needs, short-term financing and long-term investment. Conservative type is long-term capital** to meet part of short-term capital needs.

The value is the production of the commoditySocially necessary working hoursDecided.

Socially necessary labor time refers to the production of a certain value of use delay under the average labor proficiency and labor intensity of the society under the existing normal production conditions of the society.

The labor time required. The socially necessary labor time for the production of goods is accompanied by labor productivity.

changes and changes.

Therefore, the higher the labor productivity, the lower the production unit.

The less socially necessary labour time is expended on the commodity, the smaller the amount of value per unit of commodity; On the contrary, the opposite is true. Therefore, the amount of value of a commodity is directly proportional to the amount of labour embodied in the commodity, and inversely proportional to the productivity of labour in the production of that commodity.

The meaning of value.

In economics, value is an important property of a commodity, and it represents how much the commodity can be exchanged for other commodities in exchange, and the value is usually measured by money and becomes **. The value in this view is actually the expression of exchange value.

The value of a company refers to the value of the enterprise itself, and is the market evaluation of the value of tangible assets and intangible assets of the enterprise. Enterprise value is different from profit, which is a part of the value created in the market value of all assets of an enterprise.

The enterprise value also does not refer to the total value of the company's book assets, because of the existence of the company's goodwill, usually the actual market value of the enterprise far exceeds the value of the book assets.

Market value

Market valueIt refers to what the enterprise can obtain. When a business is in the market, its buying and selling is the market value of the business. The market value is usually not equal to the book value, and its value depends on the supply and demand of the market.

But in essence, market value is also determined by intrinsic value. Just as the relationship between the market and the value in Marx's theory, the market is determined by the intrinsic value, which is the manifestation of the connotative value, and the market of the enterprise fluctuates up and down around its connotative value, and the perfect situation is that the market is equal to the connotative value.

Value is determined by the socially necessary labor time to produce that commodity.

Commodities with different use values can be exchanged with each other in a certain proportion because there is something common between them that can be compared. What can be compared is the undifferentiated human abstract labor force in commodity production. Undifferentiated human abstract labor is condensed in commodities, and the value of commodities is formed.

In Karl Marx's Capital, socially necessary labor time refers to the labor time required to produce a certain use value under the normal production conditions of the existing society, under the average labor proficiency and labor intensity of the society. Socially necessary labor time acquires the prescriptiveness of the quantity of abstract labor, while abstract labor itself is expressed as a certain difference in social labor time.

Socially necessary working hours are the "average necessary working hours" of society. The so-called average necessary working time refers to the time of change of the newly paid labor force in the current period and the averaging, socialization, and homogenization of the labor time transferred in the previous period, and becomes the same working time in the current period.

There are multiple views on the nature of value:

1. Abstraction.

This view holds that value is an abstract belief, ideal, norm, standard, relationship, tendency, hobby, choice, etc., which cannot be seen or touched, but it plays a role all the time and everywhere, guiding people's thoughts, controlling people's actions, and evaluating a certain thing is the best and reflects the abstract ideal value.

2. Mystery.

According to this view, value is a profound and subtle concept, with a large capacity and vague meaning, its connotation and extension are difficult to grasp, and its spiritual essence is difficult to comprehend. Value is by no means real, neither physical nor psychological.

The essence of value lies in its validity, not in its actual factuality. The final foundation of value lies in the self-promise of human beings, in the hope of human beings for the world, and in the prayer of human beings for human nature.

The value of an enterprise is the value of the expected free cash flow of the enterprise discounted at the discount rate with its weighted average cost of capital, which is closely related to the financial decision-making of the enterprise, reflecting the time value, risk and sustainable development ability of the enterprise's funds. Enterprise value refers to the value of a sustainable business that is completely different from the value of the enterprise at the time of liquidation. Comparatively speaking, the value of a business is dynamic, whereas the value of a business at the time of liquidation is static.

1.Corporate value is dynamic. According to the definition of enterprise value, only a going concern that generates free cash flow can return to a variety of stakeholders.

Firms that can make this return more than a necessary level (i.e., opportunity cost) are considered to be creating value. On the contrary, if it is lower than the level of car search, it is a loss of value. At this time, there will be a series of consequences such as shareholders selling **, creditors no longer lending to the enterprise, and managers looking for other branches.

This can be disastrous for businesses.

2.The liquidation value is static. The value of an enterprise at the time of liquidation generally refers to the residual value of fixed assets.

At this time, the enterprise can no longer create sustainable revenues and cannot meet the basic returns required by various stakeholders. This value is not of guiding significance for improving the management level of enterprises. From this point of view, enterprise value is more meaningful than a static closing value.

Therefore, the study of what kind of enterprise is creating value, how to enhance enterprise value, and how to apply enterprise value theory in enterprise management should be based on enterprises in continuous operation.

The nature of a business dictates that its sole purpose is to chase profits. Of course, the pursuit of profit involves strategic long-term investment, which is the essence of so-called social responsibility.

to survive in a profitable state; Serving the community; To provide the best and best new products to the market.

The law of the country is solemn and the law of the country is dignified.

What determines the value of a company?

Past profitability? How much money do you make now? How much money will you make in the future?

I think anyone with a little bit of financial knowledge will know that the value of a company is a discount of future cash flows. To put it simply, the money made by the past and present companies belongs to the past investors and not to the new investors. And only future profits belong to the new investors.

But why is it said here that future cash flow is being talked about? Because the net profit thing itself is a numbers game, a company can grow well without profits, such as Amazon, which constantly invests in the future, causing its profits to continue to lose. However, a company cannot have negative cash flow for a long time, because without cash flow, the company will not be able to pay salaries and go bankrupt.

Why say so much? Because I found that there is a strange phenomenon that the market likes to score companies based on their past earnings. There is some truth here, that is, the top students will continue to perform better.

However, will there be a chance that what was originally a poor student will gradually become an excellent student? I think there are a lot of them, and these kinds of opportunities tend to exist in companies that have just been restructured, companies that are desperately trying to develop and develop. Recently, I also observed a phenomenon called goodwill impairment, which is very interesting.

It is probably that if the restructured company's performance is not up to standard in the past few years, it will have to make a loss. Of course, this itself has a certain degree of reasonableness, especially for the company that was originally bought back with 100 yuan and is now only worth 10 yuan, of course, it has to make a loss of 90 yuan. But if you bought a 100 yuan company for 100 yuan, and people have invested in research and development in recent years, resulting in the performance not meeting the standard, you also make a loss of 90 yuan.

Then Zhengji is wrong at this time. In layman's terms, you bought a house of 10 million yuan, and in the past two years, because of the investment of 500,000 yuan in decoration, you can only rent it for half a year, so your rent is a loss from the perspective of cash flow. At this time, can you say that this house is not worth 10 million, but only a few million?

Or even a few million losses? Of course not! But such a ridiculous thing happened in the capital market.

I believe there will be great opportunities here, provided you have the wisdom and courage to discover Pena it!