Research On The Relationship Between Earnings Management And Enterprise Value In Automobile Manufacturing Industry

The automotive industry is an important pillar of China’s industrial development. With therapid development of China’s economy and people’s living standards improve, auto demand andownership continues to raise, enable rapid development of China’s automobile industry.Domestic automobile enterprises in the fierce competition, find the importance to enhancecorporate value and create a national brand. However, China’s auto industry, industrialconcentration is low, technological innovation capability is weak. They need to continue tointegrate resources to improve competitiveness and enhance corporate value. This makes theauto companies generate strong incentives to manage earnings. When companies are at differentstages of the life cycle, strategic planning will be conducted according to the actual situation ofenterprises. At this purpose and motivation of earnings management is different. On the basis offactors such as the presence of asymmetric information on, business managers often convey theadvantageously information to the market by way of earnings management to influencecorporate value. Therefore, from the perspective of the life cycle to study the effect of earningsmanagement on enterprise value has a long-term, stable and healthy development of far-reachingsignificance.In this paper, combined with asymmetric information theory, from the perspective of the lifecycle for analysis of the relationship between earnings management and enterprise value andmake assumptions. Select automobile manufacturing listed companies from2011to2013datasample, choose a combination of cash flow method from Dickson and divided sample life cycle,using the modified Jones model to calculate the yearly cycle points accrued earningsmanagement, design multiple linear regression model study the different life cycle stages,relationship between management and enterprise value of earnings. Select one of samplecompanies as a case. Divide “A” company-owned life cycle stages, and analyze this phase ofearnings management tools, motivation and impact on business value. Through empiricalanalysis and case analysis of the conclusions put forward corresponding countermeasures andsuggestions.The results show that, firstly, growth and maturity businesses tend to choose the positiveearnings management, recession businesses tend to choose the negative earnings management. Secondly, in the formative years, the forward earnings management and corporate value wassignificantly positively correlated, negative earnings management and enterprise value wassignificantly negatively correlated; In maturity, positive and negative earnings managementsignificantly negatively correlated to enterprise value; in a recession, the positive and negativeearnings management was no significant correlation to enterprise value. This shows that whenthe listed companies at different stages of the life cycle, they selected different, earningsmanagement. It has different effects one enterprise value.