Earnings Structure,Investment Efficiency And Corporate Performance

The success of investment is directly related to the development of enterprises.Effective investment can improve the efficiency of capital allocation and have a positive impact on the development of enterprises.Earnings structure is the information that information users can directly observe from the income statement of enterprises,which intuitively reflects the current profitability and the main components of profits of enterprises.From the earnings structure,we can observe the earnings characteristics of different enterprises,which can reflect the sustainability and stability of earnings to a certain extent.From the structure of earnings,we can find the key points of capital allocation,and then analyze the business strategy of enterprises.Generally speaking,the larger the proportion of operating profit in the total earnings,the stronger the profitability of the main business.If the proportion of non-operating net income is large,it means that enterprises pay more attention to the investment of equity assets.The earnings structure,investment efficiency and operating performance of an enterprise are often closely related to the allocation of funds.Therefore,systematic research on the relationship among earnings structure,investment efficiency and corporate performance will help information users to have a deeper understanding of the earnings quality of an enterprise,thereby improving the efficiency and effectiveness of decision-making,which is not only has theoretical value,but also has important practical significance.This paper takes the listed companies on the GEM as the research object,chooses the data of the listed companies on the GEM in China from 2012 to 2016 as the sample,carries on the correlation analysis to the overall earnings structure of the GEM,calculates the investment efficiency by Richardson model,measures the overall investment efficiency of the GEM by the absolute value of the residual term,and evaluates the stability of earnings structure and the degree of investment efficiency of GEM listed companies in different industries.Based on the research and viewpoints of scholars at home and abroad,this paper makes a theoretical analysis of the correlation among earnings structure,investment efficiency and corporate performance,expounds the interaction and influence mechanism among them,and puts forward the hypothesis of this study.Based on the hypothesis,a regression model is established to verify the hypothesis.The regression analysis of sample data is carried out by using statistical software.Through analysis and research,the following main conclusions are drawn:first,operating profit is the main component of the total profits of GEM listed companies,and the earnings have a high degree of stability;second,inefficient investment is common in GEM listed companies in China,and most of it is caused by insufficient investment.The number of over-invested companies is small,but the proportion of low investment efficiency is higher in over-invested companies;thirdly,there is a strong correlation between earnings structure and corporate performance,and the earnings structure has a predictive function;fourthly,the lower the investment efficiency of companies,the worse the performance of companies;fifthly,high earnings sustainability has a negative effect on inefficient investment,which can promote the improvement of corporate performance.According to the above conclusions,this paper puts forward measures and suggestions.