The Theoretical And Positive Analysis About The Relationship Between The Earning Information And The Enterprises's Earning Ability

With the development of market economy in our country, enterprise financial report information is more and more important. Particularly in the capital market, the investors use it to evaluate the enterprise financial condition and operating result. Generally, financial report information reflects the enterprise earning ability, paying ability, operating ability. Earning ability is the core among the three, and is mostly concerned. Therefore, a deep research on the financial report information has its necessity to judge if they can reflect the earning ability of the enterprise. The essay consists of the preference, the text and the summary. The preference illustrates the range of discussion, the tentative idea and methods of research and the achievements by predecessors. The text discusses the relation between financial report information and the enterprise earning ability, mainly divided into five parts: Part one: To definitude the concept of earning information (the financial report information which can reflect the earning ability), and to discuss its relation between supply and demand, its target and content. Part two, part three, and part four: To apply a theoretical and positive method to discussing the relation between financial report information and earning ability from accounting profits and cash flows, assets quality, and other financial variables respectively, and to analyze if the investors can understand and predict the enterprise earning ability with the information. Part five: To point out that the usefulness of the earning information may be affected due to its inherent limitations and the existence of profit-control. The summary is to draw a conclusion on the essay. It considerably expresses the author viewpoints and raises some questions needed a further discussing.