An Empirical Analysis On The Relationship Between Earnings Quality And Stock Price Of Chinese Listed Company

For such a long time, Chinese stock market has been focusing on the profit of the listed companies, while neglecting the earnings quality. As a result, stock price has nothing to do with earnings quality, the market was taken advantage by bankers, impairing the interest of investors and market. This thesis, namely empirical analysis on the relationship between earnings quality and stock price of Chinese on the listed companies, is of great practical significance for revealing the subtle link between earnings quality and stock price, facilitating the management to know the actuality of rational level of Chinese stock market, understanding whether the investors really concern the earnings quality and introspect the reason, guiding the investors to use the financial information reasonably, guiding the reasonable capital flow and resource assignation, suppressing the fake account fundamentally and enhancing the investors' confidence on accounting vocation. At the same time, it is the urgent demand for the consummation of financial analysis system and further development of financial theory.Beginning with the Chinese reality, in the three aspects of development of Chinese stock market, financial analysis theory anddemonstrational accounting study theory, this paper discusses the necessity of the demonstration analysis on the relationship between earnings quality and stock price of Chinese stock market. Then, it talks about the study reality on earnings quality and factors affecting stock price, analysing the implication and analysis method of earnings quality, raising the 5 main indictors for earnings quality analysis. Lastly, by using the least-quadric multiplication to set up regression models, 5 indicators as independent variable and stock price as induced variable, I conduct the regression analysis the earnings quality and stock price of 6 periods report from 2000 to middle of 2003 of 555 profitable on the listed companies. It shows that the information content of earnings quality of our stock market is very low and investors are lacking of sense, there is " functions are locked * on the market . The phenomenon that the cash guarantee of profit is low and the earnings quality of annals is higher than the middle' s shows the earnings manipulation is common in our listed companies. It hinders the protection of investors' interest, reasonable flow of capital , resources assignment, further development of financial theory. Therefore, the author makes 5 constructive proposals.