The Application of Price-Sales Ratio Method in S Company's Merger and Acquisition of F Company

Qinwei Xu

doi:10.54691/bcpbm.v26i.2123

Authors

Qinwei Xu

DOI:

https://doi.org/10.54691/bcpbm.v26i.2123

Keywords:

Business valuation, price-to-sales ratio method, mergers and acquisitions, market method.

Abstract

Accurately assessing the value of the target enterprise is an important factor for the success of enterprise mergers and acquisitions. As one of the important methods of enterprise valuation, the price-to-sales ratio method adopts the operating income indicator, and uses the valuation model to obtain the market value of comparable companies and the multiple of this indicator, and then obtains the value of the target enterprise, which can reflect the business prospects of the enterprise and is widely used by the capital market. generally accepted. Based on this, this paper deeply analyzes the basic principle, applicable environment and application process of the price-to-sales ratio method and its valuation model, and applies it to the target company's valuation when S company acquires F company, and uses the price-to-sales ratio method for mergers and acquisitions. Companies that conduct valuations set an example to help them ultimately realize value appreciation.

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