The Earnings Quality Analysis Of Li Ning Company

With the development of Chinese capital market,financial statistics of public companies becomes more and more important.Although the related national departments are more and more strict with the financial information disclosure of public companies,the earnings management still exists widely in public companies.The earnings management decreases the reliability of company earnings information.Therefore,the research of the earnings quality counts for much.For the studies of earnings quality,most scholars at home and abroad conduct researches from one certain aspect of the earnings quality,however,the comprehensive and systematical researches are limited.Based on the research literature of domestic and overseas scholars about earnings quality,this paper points out that the earnings quality is the expansion of traditional profitability calculations,founded on the cash basis of accounting,combined the cash flow list,further amend and check profitability index of company.This is a kind of calculation result of companies' gaining profit quality in the certain time.And it is also a reflection of continuing the company earnings or not.Moreover,the earnings quality calculation methods and influence factors are researched on the basis of current researches.As an excellent national brand in China,Li Ning uses to be the leading enterprise of Chinese sports products.However,its performances slip down since 2011 and exist the continual loss in 2012.It achieves the profitability again in 2015 and the substantial improvement of the continuity and earnings quality are concerned by the society.Therefore,this paper chooses Ni Ling Company as the research object and studies the earnings quality from 31 st December 2012 to 30 th June,2016.This paper analyzes the earnings quality on the basis of the influential factors,according to five big characteristics of the profitability,persistence,cash security,growth and security,choosing three principles of the comprehension,utility and earnings embodiment from the earnings quality of its financial index and combing the actual conditions of Li Ning Company,then the 15 financial indexes such as sales net profit rate,the proportion of main operation profit of total profit ratio and the capital recovery ratio of cash of other qualities are conducted.This paper finds out that the earnings quality of Li Ning Company exists several issues,for example,the cash security capacity is insufficient,the control ability of cost fee should be enhanced and the earning security should be enhanced.All of these issues is mainly caused by the drastic competition of the sports product industry and the increasement of company management cost.In order to solve these issues,the proposition raised out is to lay emphasis on the cash security,enhance the solvency,extendfinancing channels,enhance the financing efficiency,intensify the control degree of cost fee,enhance profit abilities,concentrate on main operation,intensify the core competence,enhance product designs and optimize the users' experiences further more.Through the research of Li Ning Company's earnings quality,it hopes that it will be helpful for enhancing the earnings quality,the future development,the same industry and the company earnings quality in deficit time.