Empirical Research On The Relationship Between Advertising Expenditures And Financial Performanca Of The Listed Companies

The kind of merchandise constantly changing and the numbers are explosive rising after economic development entering maturity, the market has gradually become saturated. People’s material life has been met greatly, so the consumer’s attitudes are gradually changing from a demand that they have to seek its rich, in order to make their life more comfortable and fulfilling. Selecting a product is no longer primarily dependent on its suitability personal life, personal hobby has become an important factor. In this context, the competition between enterprises is becoming increasingly fierce, how to better meet consumer demand and attract the attention of consumers, stimulating their desire to purchase is particularly important, more and more companies are paying attention on Marketing,because it as a business throughout the production process to create the final part of the profits. Advertising is an important means of marketing, as the advertising industry to spread the word:"do not advertise to sell products, like darkness ogle", which also shows a significant role in promoting the sale of advertising. The quality of companies financial performance reflects the health of the entire enterprise, and even indicates whether a company is in bankruptcy, so a successful business must also have good financial performance. Now more and more companies increasingly focus on advertising investment in order to obtain good returns, then if Ad spending play a positive role in promoting financial performance? This paper aims to study the impact of advertising expenditures on financial performance of listed company, in order to explore the validity and necessity of advertising expenditures.The first part is an introduction, describing ideas and methods of the research, lack and innovation, background and significance of the article. This paper describes the relevant theories using standardized research methods, and using empirical methods analyze the impact of the Shanghai Stock Exchange listed companies advertising spending intensity on financial performance. The second part is the literature review, respectively; from both domestic and foreign studies to illustrate the impact on the financial performance of ad spending, and foreign research mainly focus on corporate market concentration, brand assets and enterprise value. The third part is related concepts and theoretical basis, mainly on advertising concepts involved articles, features and functions, the concept of financial performance and evaluation methods, theories include differences in strategy theory, system theory, principal-agent theory and advertising related theories of economics. The fourth part is the use of principal component analysis of selected samples to measure the company’s financial performance. The fifth part of empirical research, At first, we use descriptive statistics to analyze the overall status of listed companies and Secondly, selecting advertising spending of2010-2012and2012financial performance data to study the relationship between advertising expenditure and financial performance. The sixth part of the article is about conclusions, recommendations and outlook. The conclusions indicate that ad spending correlated with the year of corporate financial performance significantly; ad spending is also correlated with the previous year’s annual corporate financial performance significantly, but only and in the previous period, and reduces the degree of correlation. Therefore, enterprises should attach importance to advertising expenses and make a reasonable arrangement of advertising expenses.