Evaluation of Enterprise Value of Securities Firms Listed on the Vietnam’s Stock Market

Abstract

Enterprise value is the total value of all assets under the current ownership of the enterprise. Earnings before Interest and Taxes (EBIT) is the profits from business activities. Earnings before interest, taxes, depreciation and amortization (EBITDA) is a financial ratio that illustrates the business’s profits before deducting interests, depreciation and income taxes. The main purpose of this study is to empirically test financial indicators of securities firms listed on the Vietnam’s stock market. For this purpose, in this study we evaluate two (2) financial indicators of securities firms listed on the Vietnam’s stock market, including (i) Enterprise value to Earnings before interests and taxes (EV/EBIT); and (ii) Enterprise value to Earnings before interest, taxes, depreciation and amortization (EV/EBITDA). The results of the research show that financial indicators of securities firms listed on the Vietnam’s stock market have many significant differences. Therefore, managers may enhance the firm performance of their firms by specific measures and securities firms need to focus on measures to improve profit to raise enterprise value. This study will benefit the securities firms listed on the Vietnam’s stock market in the improvement of their firm performance.