An Empirical Study On The Earnings Persistence And Its Impact On Stock Prices

In real life, the production and operation of enterprises is the key to sustainable which profitability is sustainable.persistent and decided to one of the most important indicators of profitability and sustainable is the accounting earnings.A content of this paper is about the different earnings components that affect the earnings persistence, and then studies the earnings effect on stock prices. Before the research on these problems, firstly, the research background is introduced.the purpose of research and study of this paper, research methods combined with the new research ideas and the normative and empirical phase are introduced. Secondly, on the domestic and international research on earnings persistence are reviewed.In this paper, under the new accounting standards, with2007-2011years, listing corporation data on the empirical research of earnings persistence, and then impact on share price has carried on the empirical research. Persistent different earnings on the part of the time series model using linear regression. In this paper, the net income of decomposition, and discuss the decomposition of whether earnings of the next year’s net profit can explain the ability to predict. Through the study found:operating profit is persistent in the best part of; and net profit split into different earnings after the project, found that decomposition information on next year net income explanation ability but a slight decrease. This shows that in the prediction of the next annual net profit of net profit in the explanation ability is the strongest, and also found non-operating profit almost no ability to explain. On this basis, this paper studies the influence of surplus stock, the stock price and earnings continued significant positive correlation and the surplus is decomposition can provide incremental information for investors exist.