Sectors Analysis Of Value Relevance Of Income Index

How to evaluate the manage achievement of a firm has been one of the focuses of the market. It's also a problem of selecting manage objective function. For a corporate, making his objective function is the first step, which will decide the way and the result of management.The assets value is determined by the future cash flow according to financial model. But the income indexes such as accounting earnings (AE), cash flow operations (CFO) and residual income (RI) have some theory foundation about the connection to the value of a firm. Which can reflect the value of a firm much better and which has more information content? So, we need to test it.In reality, because of different competitiveness position in different sectors, the existing business growth opportunities show obvious earning-risk difference, as well as return on investment. In sectors, such as utilities are monopolization ones, but such as computer hardware and software, home applications are complete competitive ones.This paper examines the effect on accounting information's value-relevance of different sectors which belong to different competitiveness position by association study, in order to supply evidence about how to choice the performance appraisal index for the firm.The sample of this paper is 431companies data which were confirmed as utility, applications and information technology firms from 1999...