Could Profitability Improve The Company's Earnings Quality?

In China's capital market,the results of companies listed disclose often have win and losses,two consecutive years of losses will named by "ST" in front of the enterprise.Of course,there are a lot of companies will be profitability,finally to remove "ST" hat.It means that profitability can improve earnings quality? Analyze the profitability earnings quality of enterprise,which is beneficial to understand the real earnings ability,based on the real financial data,to solve the problems existing in the development process and enhance competitiveness and improve the earnings quality of listed companies.This paper takes Jiangsu Huachang Chemical Co.,Ltd as the subject.Analyze the earnings quality of twice repeated Profitability in 2012-2015 years,through to the existing literature study and comb,put forward two assumptions: Hypothesis 1: Profitability is in order to avoid losses continue to manipulation of surplus.Hypothesis 2: The sustainability of earnings quality and the enterprise profit ability to grow into a positive correlation.According to the specific conditions of Huachang chemical company,we analyze the influence factors of the profitability annual earnings by quality quantitative and qualitative analysis.Quantitative analysis takes non-recurring profit and loss,the accounting estimate change,advocate business income and related party transactions as a starting point,qualitative analysis is given priority to with factors other than data description.In the financial statements of the company posted at the same time,on the basis of selecting some comprehensive index is analyzed,the influence factors of these indicators than single better earnings quality level of the enterprise after the Profitability.Through the analysis of influencing factors and comprehensive indexes,profitability did not improve the quality of corporate earnings of conclusions,and aiming at specific problems Huachang chemical company analysis put forward the way to improve.This paper through the study of Huachang chemical company earnings quality analysis at the last,verify the above hypothesis was put forward,and get some general revelation.For investors,they should make rational analysis real earnings quality of the enterprise,and try the best to avoid investment risk.To managers,make product structure upgrade is necessary,and improve enterprise competitiveness is enhance the earnings quality of the enterprise finally.