An analysis of the relationship between enterprise value and cash flow using the nonlinear structural equation model

In order to find the relationship between enterprise value and cash flow, so that enterprises can create enterprise value quickly and efficiently. Based on the theory of nonlinear structural equation model, with the help of SPSS26.0 and AMOS21.0 software, this paper makes an empirical analysis on the financial data of China’s large-scale mechanical equipment and instrumentation manufacturing industry in 2023. Firstly, the structural equation model is constructed by drawing the path diagram of nonlinear structural equation. Secondly, the model is tested, and finally relevant conclusions are drawn. The empirical results show that the company’s cash payment ability, cash acquisition ability and cash turnover ability are positively correlated with the company’s value. Therefore, enterprises should closely link cash flow management with enterprise value creation, and enhance enterprise value through scientific and effective cash flow management, so as to realize the financial management goal of maximizing enterprise value.