Research On Earnings Quality Of Shanghai Electric Group Co.,Ltd

With the acceleration of China’s capital market reform,the ecological environment of the capital market is becoming more and more perfect.However,some problems exposed by listed companies still disturb the healthy order of the market,and at the same time,they also hit the confidence of investors.For example,in recent years,domestic listed companies have been frequently exposed to financial fraud,the endless number of financial scandals cases make the majority of statement users of the company’s disclosure of accounting information skepticism.The core part of accounting information is earnings,so the earnings quality of the company has attracted more and more attention from statement users.In this paper,Shanghai Electric Group Co.,LTD.(Shanghai Electric for short),a representative company in the comprehensive equipment manufacturing industry,is selected as the object to study the problem of income quality.On the basis of reading and learning related literature of income quality,this paper puts forward a method to evaluate the income quality of the company by combining financial index and non-financial index.Based on the characteristics of income quality,a series of financial index and non-financial index are selected to construct the income quality evaluation system of Shanghai Electric.At the same time,Dongfang Electric and TBEA were selected as comparative enterprises,and a comparative analysis method was used to comprehensively analyze the quality of Shanghai Electric’s revenue from both horizontal and vertical aspects.Through analysis,the evaluation results are obtained,affirming the advantages of Shanghai Electric’s revenue quality,Shanghai Electric’s reliability,profitability,safety and growth are good,and pointing out that the company’s revenue quality has insufficient cash security capabilities and poor sustainability.Further analysis of the reasons for the problems,the main reasons include the impact of national policies,accounts receivable management is not in place,the impact of non-recurrent gains and losses and the increasing period costs.Finally,corresponding solutions are put forward,including stabilizing main business income,reasonably controlling period expenses,strengthening receivables management and strengthening technological innovation.