Research On Earnings Quality Evaluation Of Yonghui Supermarket Co.,Ltd

Earnings quality information is essential in a company’s financial accounting information,which is reflected in the financial statements published by listed companies.It is used by investors,creditors,and other stakeholders to make their investment,credit,and other economic decisions.However,the information asymmetry inherent in the capital market and the manipulation of earnings by listed companies for particular motives can make it impossible for external investors to effectively examine the quality of listed companies’ earnings and thus make risky decisions.Therefore whether accounting earnings information is accurate and reliable and what methods financial analysts need to use to obtain a complete assessment of earnings quality is particularly important for the sound development of China’s capital market.Under the enduring influence of the epidemic,China’s retail industry has been hit to a certain extent,and it is essential to conduct practical earnings quality evaluations to maintain the consumer goods market.As one of the most representative local retail enterprises,the evaluation and analysis of the earnings quality of Yonghui Supermarket can,to a certain extent,contribute to the sustainable development of the enterprise and provide a basis for other retail enterprises.This paper uses a combination of single-indicator analysis and the construction of an evaluation model to evaluate the earnings quality of Yonghui Supermarket.Firstly,the concept and characteristics of earnings quality are identified.Combining theoretical foundations and literature review,the SWOT analysis and single indicator analysis methods are used to analyze the business environment and the current situation of earnings quality of Yonghui Supermarket from 2017 to 2021.Then,nine indicators were selected based on the principles of indicator selection,the characteristics of China’s listed supermarkets,and the relevant literature review,and a sound indicator system was established.The data from 2017 to 2021 of the enterprises in the industry in which Yonghui Supermarket is located were selected.An earnings quality evaluation model was constructed using the principal component analysis method.Through the vertical and horizontal evaluation findings,combined with the single-indicator analysis in Chapter 3 of this paper,the problems of earnings quality of Yonghui Supermarket in the past two years were identified.Three suggestions were made based on the problems: expanding new channels of the central business,reducing the cost of prominent business and selling expenses,and rational planning of the company’s investment cash flow.