The Empirical Study Of Listed Companies' Earnings Quality In China

The earnings quality is an important content of listed company financial analysis, and also important to measure lasting profitability of listed company. How to evaluate the earnings quality correctly is related to going concern of the company in good financial situation. It also has important significance to business, management ability and the company's own investment decisions on company investors. For investors, how to choose the quality of listed companies, is not only for the reliability of the investment, and is the guarantee of the investment risk aversion. The traditional profitability analysis only focuses on the quantitative analysis usually, but ignores the earnings quality analysis. So it easy to make mistakes on investment decisions for investors.Based on the concept and characteristics of the earnings quality and the factors affecting the earnings quality, the study chooses the financial indicators to construct the earnings quality evaluation system and select the evaluation index according to five different characteristics of the earnings quality. The study uses the factor analysis to obtain factor scores, then through factor score analysis the earnings quality situation and reasons of listed company. In the sample selection, this paper has selected financial statements of retail 45 listed companies by economic fluctuations of less influence in 2008 as empirical research sample.In order to let the earnings quality analysis to help investors make decision in the listed company, the study does correlation analysis of the earnings quality, share price and profit sharing of listed companies after comprehensive evaluation of the earnings quality. Then the study summarizes some problems of the earnings quality evaluation system in the application.