Empirical Study On Correlation Between The Information Disclosures Of Annual Financial Statements In Machinery Industry And The Fluctuations Of Their Stock Prices

Most researches show at present that Chinese security market has already reached the weak-form efficiency, but has not been up to semi-strong-form efficiency. Disclosure of a company's accounting information can influence its stock price, but how the price changes and what is the law of its change, different researchers, analyzing the influencing factors from different aspects, have got different conclusions. Based on the efficiency research of our security market, the thesis involves in 23 financial indexes relating to company's fundamental analysis, which including coverage indexes, operation efficiency indexes, profitability indexes, development indexes, and the indexes of earning per share (EPS) and net assets per share, to investigate the information disclosing impact on changes of the stock price, and to find out the investors main concerned indexes. The results of empirical studies also indicate that the stock price has good linear relations with indexes of EPS and core business profit ratio. And the core business profit ratio had seldom been involved in previous studies.In the first part, the thesis introduces the market efficiency theory, the conclusion to efficiency test of Chinese security market and the study process and results of the relations between accounting information disclosures and stock price changes in and outside the country. In empirical study part, the thesis chooses stock-price datum from 1988 to 2006 in both Shenzhen and Shanghai Stock Markets, finding out that both two markets have been up to weak-form efficiency. On such a basis, the thesis picks Machinery/Equipment/Appearance Industries (ST Corporations are not included) as objects, and reaches the conclusion that there is positive linear relations between EPS and stock price. Besides, in Shenzhen Stock Market, core business profit ratio is also an important price-influencing factor.The empirical studies also show that, at present stage, investors in Chinese security market think of information only provided by the income statements, not by the balance sheets and the statements of cash flows. Meanwhile, they can predict the changes of stock price of companies in machinery industry according to the linear relationship between stock price and EPS (in Shenzhen stock market, it also includes core business profit ratio). On the analysis of the empirical results, the thesis proposes several suggestions.