Earnings Persistence And Return On Investment In Growing Surplus Of Listing Corporation

With the increasing of the domestic security market participants, the demand for the accounting information of the listing Corporation is higher and higher. Accounting information enterprise business process of quantitative expression, mainly to the enterprise’s external financial statements, such as the balance sheet, cash flow statement, profit statement and report notes, etc. Accounting earnings is one of the most important indicators of accounting information, and it is the direct embodiment of managers’management performance. It is an important reference for external investors to make investment decisions. One of the most important characteristics of accounting earnings is the persistence of earnings. Because the accounting earnings are composed of individual components, and the structure of the various components of the continuity is not the same. In the process of earnings analysis, the accounting earnings are the same but the structure is very different, and the different structures are combined together, which will be a surplus of different duration. So the research purpose of this paper is to study the persistence of different earnings structure and the response of the surplus in the capital market.In this paper, all the A shares of listing Corporation selected from 2011 to 2014 years, accounting earnings for 5 consecutive years of growth of the company as a sample of the overall study. Then, the total sample points for operating profit growth for five consecutive years the company and operating profit to five consecutive years of growth companies, through empirical study. It is proved that the earnings growth for 5 consecutive years the company also have different earnings persistence, which to operating profit growth in recent years the company’s earnings persistence is more significant, with higher earnings persistence. The analysis of earnings growth should be progressive, to seize the main issues, so this paper on the growth of operating profit of the company has done a further analysis. The operating profit for five consecutive years of growth points as operating income continuous growth in 5 years the company and operating income to five consecutive years growth of the company, through empirical study. It is proved that the operating profit growth for five consecutive years the company also have different earnings persistence, as the continuous growth of the company’s business income, the surplus continued is often higher than the revenues without continuous growth of company earnings persistence.The second part of the establishment of a return on investment model, through the simulation of the company’s stock of different earnings persistence of the transaction, to verify whether the investment returns will have different performance. Through the empirical analysis, it is proved that the investment of the stock of the company which is different from the earnings of the company is the same, that is, the high earnings persistence brings high returns.The shortage of this paper lies in the sample selection, due to China’s securities market including the A-share, B-share and H-share, and my research involves only the A-share market, so the research is not comprehensive; secondly, in the surplus of said variable selection, at home and abroad have different choices, for which a more appropriate, but also need to further research and analysis.