The Deviation Phenomenon Research Of Listed Companies' Net Profit And Operating Cash Flow

Accounting Earnings and Cash Flow are the most important indicators of Financial Reports. Previous studies proved the existence of Earnings Management and Cash Flow Manipulation in China's stock market, which has been reduced Statements Information Content greatly. Many studies proved that China's stock market exists "Function Lock" Phenomenon that Investors often locked in surface information of Financial Reports in the decision-making process. It is even more important to get Incremental Information from Financial Reports. The different items between Net Profit under the Accrual Basis and Operating Cash Flow under Cash Basis, such as Depreciation and Amortization, Financial Expenses, Operating Accruals, etc., are always the objects of Earnings Management. The paper tried to make a comparative analysis of Net Profit and Operating Cash Flows of Listed Companies, to get more Incremental Information Content.The paper showed a theoretical contrast between Accounting Net Profit and Operating Cash Flow, theoretically explained the difference between Net Profit and Operating Cash Flow on calculation basis as well as calculation caliber, and interpreted the tools of Earnings Management and Manipulation of Cash Flow and the impact of different tools. The paper made an Empirical Analysis of the Deviation Phenomenon and the Deviation Structure of Net Profit and Operation Cash Flow. The paper found China's Listed Companies' Operating Cash Flow volume deviated from Net Profit and such Deviations will continue, showed the evidence of the perspective that Net Profit growth of China's Listed Companies was supported by Asset Growth and Financial Leverage but not by Operational Efficiency. The paper also found that there is abnormity in Depreciation and Amortization, Financial Expenses, Inventory, Operating Payables and Receivables. According to the analysis, it suspected that there exists Earnings Management and Cash Flow Manipulation.