Positive Research Of Financial Indices System About Public Corporation

Economic research methods can be classified into two categories: normative research and positive research. Normative research answers the kind of questions such as "what things should be", while the positive research answers the kind of questions such as "what it is." It explains events in three different stages: what it was in the past, what it is now, and what it will be in the future. Since normative research is based on real evidence in life, its soundness can be verified by the result of that event, which means its hypothesis can be invalidated.. Similar to economic research methods, accounting research methods can also be classified into two categories Normative Research and Positive Research. Based on past economic experiences in our country, accounting research methods mainly focus on normative research. Following accounting theory and practices developed in recent years, Positive research in the field of accounting gradually has been introduced and expanded. Its usage enriches accounting research methods and has contributed to scientific development. We are going to investigate the following example in the utilization of financial analysis.After China entered the World Trade Organization, business management skills have faced many challenges. The soul of business management is financial management. The heart of financial management is financial analysis. Financial analysis plays an important role in a nation's financial, business, and investments. In the wake of prosperity of China's free market economy, the rules and regulations of our country continue to be perfected and adapted to accommodate these changes. More company and business investments are becoming high risk ventures. Investors in the market must have accurate and timely information regarding a company's management and financial situation. To obtain this information, investors must analyze financial statements of publicly traded companies based on their accounting information. However, investors face a difficult task when they attempt to analyze the financial status of a publicly traded company. This difficulty is due primarily to the vast number of financial indexes that an investor must choose from before making an informed decision. Since the relationship among financial indexes is verycomplicated, investors may find index analysis somewhat difficult in evaluating a compiled index. A compiled index is essential in evaluating a company's management style and financial situation. Compounding this problem, companies and businesses utilize a non-standardized method of reporting financial indexes to manipulate the actual company's management and financial situation. As a result, investors feel overwhelmed, not knowing what to looking for or how to standardize their approach in analyzing financial indexes for potential investment. Therefore, it is very important to establish a financial index reporting system for every public traded company.The goal of this research paper is to establish a financial analysis system by using positive research methods to study and categorize the financial index of publicly traded companies. This financial analysis system will include only important financial indexes, which represent the over all financial situation of that company. It can provide accurate financial information for investors and provide management additional tools in the decision-making process. This research includes the following topics: method of analyzing of a publicly traded company's financial situation, method of categorizing financial indexes of a publicly traded company, positive research methods, related statistical methods, and data analysis, using the results of categorization in evaluating publicly traded companies' overall financial situation, (testing validity of categorization) etc...In this article, our major premise focuses on the methodology of analyzing and categorizing financial indexes of a publicly traded company. This analytical method uses a few key factors to represent overall change. If there is no line...