Research On Profit Manipulation Behavior And Stock Price Changes Of The Poisonous Capsule Crisis Company

The crisis has been a hot topic among the media. In the face of the crisis,external information users pay close attention to the very act and every moveof enterprises. Negative information may be distorted in some way, whilepositive information may be amplified in another way.This paper attempts to study the two "poisonous capsule" crisis exposedlisting Corporation--Tonghua Golden-horse Pharmaceutical Industry Co.,ltd.and Jilin pharmaceutical Limited by Share Ltd Financial performance on thepost crisis, in order to help the widely small investors understand somenon-standard phenomenon after the poisonous capsule crisis.Comprehensive analysis shows that, Tonghua Golden-horse claimed awhitewash profit through inflated income, increasing the confirmation of theinvestment income and delaying cost means. The company turned the netprofit from losses into profits, aiming to exhibit external investors positiveinformation. By transferring a “good” profit after the crisis, the companymeant to maintain a “good” performance in the "positive" image, andinvestors also failed to identify the false profit information.Another listing Corporation Jilin pharmaceutical has been found to control accounting performance negatively. The company originally made apositive profit forecast, but exhibited a negative performance by means ofincreasing costs in the end of the season. Losses of three continuing yearsreached the Shenzhen Stock Exchange suspension condition, which in turnassisted the company avoiding the fluctuation of stock price.Based on these special phenomena of the poison capsule event casesanalysis, this paper hope to give the investors actual instructions of theenterprises’ crisis information, which not only concerns the profitability ofthe listing Corporations during the crisis, but also need a comprehensiveanalysis of the financial index and comprehensive evaluation of thecompany’s real performance.