企业盈利质量分析中英文对照外文翻译文献
盈余质量分析的评价指标体系外文翻译
原文：Analysis of earnings quality evaluation index system Earnings quality is an important aspect of evaluating an entity's financial health, yet investors, creditors, and other financial statement users often overlook it. Earnings quality refers to the ability of reported earnings to reflect the company's true earnings, as well as the usefulness of reported earnings to predict future earnings. Earnings quality also refers to the stability, persistence, and lack of variability in reported earnings. The evaluation of earnings is often difficult, because companies highlight a variety of earnings figures: revenues, operating earnings, net income, and pro forma earnings. In addition, companies often calculate these figures differently. The income statement alone is not useful in predicting future earnings.The SEC and the investing public are demanding greater assurance about the quality of earnings. Analysts need a more suitable basis for earnings estimates. Credit rating agencies are under increased scrutiny of their ratings by the SEC. Such comfort level and information is not provided in the audit report or the financial statements. Only 27% of finance executives recently surveyed by CFO “feel 'very confident' about the quality and completeness of information available about public companies” [“It's Better (and Worse) Than You Think,” by D. Dupree May 3, 2004].There are a variety of definitions and models for assessing earnings quality. The authors have proposed a uniform, independent definition of quality of earnings that allows for the development of an Earnings Quality Assessment (EQA) model. The proposed EQA model evaluates the degree to which a company's income statement reports its true earnings and the extent to which it can predict and anticipate future earnings.Earnings Quality DefinedA variety of earnings-quality definitions exist. Teats [“Quality of Earnings: An Introduction to the Issues in Accounting Education,” Issues in Accounting Education, 17 (4), 2002] states that “some consider quality of earnings to encompass the underlying economic performance of a firm, as well as the accounting standards that report on that underlying phenomenon; others consider quality of earnings to refer only to how well accounting earnings convey information about the underlying phenomenon.” Pratt defines earnings quality as “the extent to which net income reported on the income statement differs from true earnings” [in F. Hodge, “Investors'Perceptions of Earnings Quality, Auditor Independence, and the Usefulness of Audited Financial Information,” Accounting Horizons 17 (Supplement), 2003]. Penman [“The Quality of Financial Statements: Perspectives from the Recent Stock Market Bubble,” Accounting Horizons 17 (Supplement), 2003] indicates that quality of earnings is based on the quality of forward earnings as well as current reported earnings. Shipper and Vincent [“Earnings Quality,” Accounting Horizons 17 (Supplement), 2003] define earnings quality as “the extent to which reported earnings faithfully represent Hicks Ian income,” which includes “the change in net economic assets other than from transactions with owners.”Using various definitions of earnings quality, researchers and analysts have developed several models. The Sidebar summarizes eight models for measuring earnings quality. The models are used for very narrow, specific purposes. While the criteria used in these definitions and models overlap, none provide a comprehensive view of earnings quality. For example, the primary purpose of the Center for Financial Research and Analysis (CRFA)'s model is to uncover methods of earnings manipulation. Of the eight models discussed, only the Lev-Thiagarajan and Empirical Research Partners models have been empirically tested for evidence of usefulness related to quality of earnings. Lev and Thiagarajan's findings confirm that their fundamental (earnings) quality score correlates to earnings persistence and growth, and that subsequent growth is higher in high quality–scoring groups. Empirical Research Partners' model is based in part on methodology developed and tested by Potosi, whose findings indicate a positive relationship between scores based on the model and future profitability.The following summarizes the criteria considered in each of the eight models for measuring earnings quality.Center for Financial Research and Analysis: Four criteria to uncover methods used to manipulate earnings. Report includes financial summary, accounting policy analysis, discussion of areas of concernEmpirical Research Partners: Three components: net working-capital growth rate, net concurrent assets, deferred taxes; incremental earnings and free cash flow production relative to each new dollar of revenue or book value; and nine financial indicators, put together for a single gauge of fundamentals. Items viewed favorably:positive return on assets and operating cash flow; increases in return on assets, current ratio, gross margin, asset turnover; operating cash flow that exceeds net income.Items viewed unfavorably: increases in long-term debt-to-assets; presence of equity offerings. Each indicator given a 1 if favorable, an O if not; scores aggregated on an O to 9 scales.Ford Equity Research: Earnings variability is minimum standard error of earnings for past eight years, fitted to an exponential curve. Growth persistence considers earnings growth consistency over 10 years; projected earnings growth rate is applied to normal earnings to derive long-term value. Operating earnings calculated by excluding unusual items, such as restructuring charges and asset write-downs; earnings trend analysis done on this adjusted figure. Repurchases of an entity's own shares are analyzed to determine if results are favorable.Lev-Thiagarajan: Each fundamental is assigned a value of 1 for positive signal, O for negative signal. Each of 12 factors is equally weighted to develop aggregate fundamental score. Negative signals include: decrease in gross margins disproportionate to sales; disproportionate (versus industry) decreases in capital expenditures and R&D; increases in S&A expenses disproportionate to sales; and unusual decreases in effective tax rate. Inventory and accounts receivable signals measure percent change in each (individually) minus percent change in sales; inventory increases exceeding cost of sales increases and disproportionate increases in receivables to sales are considered negative. Unusual changes in percent change of provision for doubtful receivables, relative to percent change in gross receivables, are also viewed negatively. Percent change in sales minus percent change in order backlog is considered an indication of future performance.Merrill Lynch (David Hawkins) (see earnings quality: the establishment of a real 360 View, 2002). Higher total capital ratio (pre-tax operating return on total capital) returns a higher quality of earnings equivalent. Liquidity ratio above 1.0 (net income figure how close it is to achieve positive cash) that the higher quality of earnings. Re-investment in productive assets ratio above 1.0 (committed to maintaining the fixed asset investment) that a higher quality of earnings. The ratio ofeffective tax rate for all companies meet or exceed the average level (dependence on low-tax report) that the higher quality of earnings. Model also believes that long-term credit rating and Standard & Poor's S & P earnings and dividend growth and stability of rank-based, over the past 10 years.Raymond James & Partners (Michael Krensavage) (also see the earnings quality monitoring, 2003.) 1 (worst) to 10 (best) rating as a benchmark of 10 exclusive distributions; weighted average rating in the combined to determine the earnings quality scores. Low earnings quality indicators: increase in receivables; earnings growth due to reduced tax rates, interest capitalization, high frequency / time scale of the project. In a recent major acquisition made during the punishment. Practice of conservative pension fund management and improve the R & D budget faster than revenue in return. Cash flow growth and the related net income and gross margin of profit a positive impact on quality improvement.Standard & Poor's core earnings (see also the technical core earnings Bulletin, October 2002). Attempts to give a more accurate performance of the existing business of the real. Core benefits include: Employee stock option expenses; restructuring charges from ongoing operations; offset the depreciation of business assets or deferred pension costs; purchased research and development costs; merger / acquisition costs; and unrealized gains and losses on hedging. Excluded items: Goodwill impairment charges, pension income; litigation or insurance settlements, from the sale of assets (loss) and the provisions of the previous year's expenses and the reversal.UBS (David Bianca) (also see S & P 500 accounting information quality control, 2003.) Comparison of GAAP operating income; the difference between the net one time standard. Employee stock option expenses charged to operating profit. Assuming the market value of return on pension assets to adjust interest rates or the discount rate times. Health care costs adjusted for inflation, if the report is 300 basis points more than the S & P 500 companies are expected weighted average. Joint Oil Data Initiative is AUTHOR_AFFILIATION Bell ovary, CPA, is a Marquette University, Milwaukee, Wisconsin, Don E. Incoming, CPA, graduate students, professors, and Donald E &Beverly Flynn is Chairman of the holder at Marquette University. Michael D • Akers, CPA, CMA, CFE, CIA, CBM, is a Professor and Head of the Department.Of the 51 criteria/measurements used in the eight models, only eight (acquisitions; cash flow from operations/net income; employee stock options; operating earnings; pension fund expenses; R&D spending; share buyback/issuance; and tax-rate percentage) are common to two models, and only two (gross margin and one-time items) overlap in three models.The first step, then, is to develop a standard definition of earnings quality. One of the objectives of Fast’s Conceptual Framework is to assist investors in making investment decisions, which includes predicting future earnings. The Conceptual Framework refers not only to the reliability (or truthfulness) of financial statements, but also to the relevance and predictive ability of information presented in financial statements. The authors' definition of quality of earnings draws from Pratt's and Penman's definitions. The authors define earnings quality as the ability of reported earnings to reflect the company's true earnings and to help predict future earnings. They consider earnings stability, persistence, and lack of variability to be key. As Beaver indicates: “current earnings are useful for predicting future earnings … [and] future earnings are an indicator of future dividend-paying ability” (in M. Bauman, “A Review of Fundamental Analysis Research in Accounting,” Journal of Accounting Literature 15, 1996).Earnings Quality Assessment (EQA)The authors propose an Earnings Quality Assessment (EQA) that provides an independent measure of the quality of a company's reported earnings. The EQA consists of a model that uses 20 criteria that impact earnings quality (see Exhibit 2 ), applied as a “rolling evaluation” of all p eriods presented in the financial statements. The EQA is more comprehensive than the eight models presented, considering revenue and expense items, as well as one-time items, accounting changes, acquisitions, and discontinued operations. The model also assesses the stability, or lack thereof, of a company, which leads to a more complete understanding of its future earnings potential.The criteria were drawn from the eight models discussed, including the 10 criteria overlapping two or more models. The EQA evaluator assigns a point value ranging from 1 to 5 for each of the 20 criteria, with a possible total of 100 points. Ascore of 1 indicates a negative effect on earnings quality, and a score of 5 indicates a very positive effect on earnings quality. EQA scores, then, can range from 20 to 100. Similar to the grading methods for bond ratings, grades are assigned based on the following scale: 85–100 points = A, 69–84 points = AB, 53–68 points = B, 35–51 points = BC and 20–34 points = C. While the EQA evaluator needs to use professional judgment in assigning scores to each of the criteria, the guidelines in Exhibit 2 are recommended.The Application of EQATo illustrate the process of applying the EQA, the authors chose two large pharmaceutical companies, Merck and with. Each of the authors independently applied the EQA to Merck's and Width’s 2003 financial statements, and then met to discuss their results. Based upon each individual assessment and the subsequent discussion, they reached an agreed-upon score, presented in Exhibit 3 .This process is similar to what an engagement team would go through. Each member would complete the EQA independently, and then the group would meet as a whole to discuss the assessment and reach a conclusion. This process allows for varying levels of experience, and takes into account each team member's perspective based on exposure to various areas of the company. The audit team's discussion is also helpful when one member finds an item that another might not have, which may explain variances in the scores assigned by each individual.For the illustration, the EQA was based solely on data provided in the financial statements. The authors found a high level of agreement on the quality of earnings measures, and there was little variation in the scores for both companies. One would expect even less variation when a group more intimately exposed to an organization, such as the audit engagement team, completes the EQA. The consistency provided by use of the EQA model would enhance the comfort level of users of the financial statements and the EQA.Need for Further DevelopmentThere is significant need for the development of a uniform definition and a consistent model to measure earnings quality. This article provides such a definition, positing that the quality of earnings includes the ability of reported earnings to reflect the company's true earnings, as well as the usefulness of reported earnings to predict future earnings. The authors propose an Earnings Quality Assessment (EQA) model that is consistent with this definition. The EQA recognizes many of the fragilities ofGAAP, and takes into account factors that are expected to affect future earnings but that are not explicitly disclosed in the financial statements.The authors propose that auditors conduct the EQA and issue a public report. Auditors' EQA reports will provide higher-quality information to financial statement users and meet the SEC's demand for greater assurance about the reliability of earnings figures.Source: MichaelD.Akers, 2005. “Analysis of earnings quality evaluation index system” the CPA journal. November.pp.199.译文：盈余质量分析的评价指标体系盈余质量是债权人评价一个实体的财务状况的重要方面，但投资者和其他财务报表使用者往往忽略它。
上市公司盈利能力分析外文文献
The path-to-profitability of Internet IPO firms ☆Bharat A.Jain a,1,Narayanan Jayaraman b,2,Omesh Kini c,⁎aCollege of Business and Economics,Towson University,Towson,MD 21044,United States b College of Management,Georgia Institute of Technology,Atlanta,GA 30332,United Statesc Robinson College of Business,Georgia State University,Atlanta,GA 30303,United StatesReceived 1October 2006;received in revised form 1December 2006;accepted 1February 2007AbstractExtant empirical evidence indicates that the proportion of firms going public prior to achieving profitability has been increasing over time.This phenomenon is largely driven by an increase in the proportion of technology firms going public.Since there is considerable uncertainty regarding the long-term economic viability of these firms at the time of going public,identifying factors that influence their ability to attain key post-IPO milestones such as achieving profitability represents an important area of research.We employ a theoretical framework built around agency and signaling considerations to identify factors that influence the probability and timing of post-IPO profitability of Internet IPO firms.We estimate Cox Proportional Hazards models to test whether factors identified by our theoretical framework significantly impact the probability of post-IPO profitability as a function of time.We find that the probability of post-IPO profitability increases with pre-IPO investor demand and change in ownership at the IPO of the top officers and directors.On the other hand,the probability of post-IPO profitability decreases with the venture capital participation,proportion of outsiders on the board,and pre-market valuation uncertainty.©2007Published by Elsevier Inc.Keywords:Initial public offerings;Internet firms;Path-to-profitability;Hazard models;SurvivalJournal of Business Venturing xx (2007)xxx –xxxMODEL 1AJBV-05413;No of Pages 30☆We would like to thank Kalpana Narayanan,Raghavendra Rau,Sankaran Venkataraman (Editor),Phil Phan (Associate Editor),two anonymous referees,and participants at the 2002Financial Management Association Meetings in San Antonio for helpful comments.We thank Paul Gilson and Sandy Lai for excellent research assistance.The usual disclaimer applies.⁎Corresponding author.Tel.:+14046512656;fax:+14046522630.E-mail addresses:bjain@ (B.A.Jain),narayanan.jayaraman@ (N.Jayaraman),okini@ (O.Kini).1Tel.:+14107043542;fax:+14107043454.2Tel.:+14048944389;fax:+14048946030.0883-9026/$-see front matter ©2007Published by Elsevier Inc.doi:10.1016/j.jbusvent.2007.02.004Please cite this article as:Jain,B.A.et al.The path-to-profitability of Internet IPO firms.Journal of Business2 B.A.Jain et al./Journal of Business Venturing xx(2007)xxx–xxx1.Executive summaryThere has been an increasing tendency for firms to go public on the basis of a promise of profitability rather than actual profitability.Further,this phenomenon is largely driven by the increase in the proportion of technology firms going public.The risk of post-IPO failure is particularly high for unprofitable firms as shifts in investor sentiment leading to negative market perceptions regarding their prospects or unfavorable financing environments could lead to a shutdown of external financing sources thereby imperiling firm survival. Therefore,the actual accomplishment of post-IPO profitability represents an important milestone in the company's evolution since it signals the long-term economic viability of the firm.While the extant research in entrepreneurship has focused on factors influencing the ability of entrepreneurial firms to attain important milestones prior to or at the time of going public,relatively little is known regarding the timing or ability of firms to achieve critical post-IPO milestones.In this study,we construct a theoretical framework anchored on agency and signaling theories to understand the impact of pre-IPO factors such as governance and ownership structure,management quality,institutional investor demand,and third party certification on firms'post-IPO path-to-profitability.We attempt to validate the testable implications arising from our theoretical framework using the Internet industry as our setting.Achieving post-issue profitability in a timely manner is of particular interest for Internet IPO firms since they are predominantly unprofitable at the time of going public and are typically characterized by high cash burn rates thereby raising questions regarding their long-term economic viability.Since there is a repeated tendency for high technology firms in various emerging sectors of the economy to go public in waves amid investor optimism followed by disappointing performance,insights gained from a study of factors that influence the path-to-profitability of Internet IPO firms will help increase our understanding of the development path and long-term economic viability of entrepreneurial firms in emerging, high technology industries.Using a sample of160Internet IPO firms that went public during the period1996–2000, we estimate Cox Proportional Hazards(CPH)models to analyze the economic significance of factors that influence the post-IPO path-to-profitability.Consistent with agency explanations,we find that a higher proportion of inside directors on the board and the change in pre-to-post-IPO ownership of top management are both significantly positively related to the probability of attaining post-IPO profitability.These results support arguments in the governance literature pointing to the beneficial impact of the presence of more insiders on the boards of high technology companies as well as the signaling value of the ownership stake of top management in the post-IPO firm.Additionally,we find evidence to indicate that higher institutional investor demand serves as an effective signal of the ability of Internet firms to attain post-IPO profitability,while greater pre-IPO valuation uncertainty reflects higher divergence of opinion about the future prospects of the IPO firm, and serves as a negative signal of the ability to achieve post-IPO profitability.Finally,we find that while underwriter prestige is unrelated to the probability of post-IPO profitability, VC participation decreases the probability of post-IPO profitability.Our results regarding the impact of VC participation on the probability of post-IPO profitability support arguments in the literature that VCs during the Internet boom period had incentives to grandstand by Please cite this article as:Jain,B.A.et al.The path-to-profitability of Internet IPO firms.Journal of Businesstaking their companies public prematurely and that their monitoring role in the post-IPO period was rather limited since they cashed out earlier due to shorter lock-up periods.Our study makes several contributions.First,we construct a theoretical framework based on agency and signaling theories to identify factors that may influence the path-to-profitability of IPO firms.Second,we provide empirical evidence on the economic viability (path-to-profitability and firm survival)of newly public Internet firms.Third,our study adds to the theoretical and empirical literature that has focused on factors influencing the ability of entrepreneurial firms to achieve critical milestones during the transition from private to public ownership.While previous studies have focused on milestones during the private phase of firm development such as receipt of VC funding and completion of a public offering,our study extends this literature by focusing on a post-issue milestone such as attaining profitability.2.IntroductionThe past few decades have witnessed the formation and development of several vitally important technologically oriented emerging industries such as disk drive,biotechnology,and most recently the Internet industry.Entrepreneurial firms in such knowledge intensive industries are increasingly going public earlier in their life cycle while there is still a great deal of uncertainty and information asymmetry regarding their future prospects (Janey and Folta,2006).A natural consequence of the rapid transition from founding stage firms to public corporations is an increasing tendency for firms to go public on the basis of a promise of profitability rather than actual profitability.3Although sustained profitability is no longer a requirement for firms in order to go public,actual accomplishment of post-IPO profitability represents an important milestone in the firm's evolution since it reduces uncertainty regarding the long-term economic viability of the firm.In this paper,we focus on identifying observable factors at the time of going public that have the ability to influence the likelihood and timing of attaining post-IPO profitability by Internet firms.We restrict our study to the Internet industry since it represents a natural setting to study the long-term economic viability of an emerging industry where firms tend to go public when they are predominantly unprofitable and where there is considerably uncertainty and information asymmetry regarding their future prospects.4The attainment of post-IPO profitability assumes significance since the IPO event does not provide the same level of legitimizing differentiation that it did in the past as sustained profitability is no longer a prerequisite to go public particularly in periods where the market is favorably inclined towards investments rather than demonstration of profitability (Stuart et al.,1999;Janey and Folta,2006).During the Internet boom,investors readily accepted the mantra of “growth at all costs ”and enthusiastically bid up the post-IPO offering prices to irrational levels (Lange et al.,2001).In fact,investor focus on the promise of growth rather than profitability resulted in Internet start-ups being viewed differently from typical 3For example,Ritter and Welch (2002)report that the percentage of unprofitable firms going public rose form 19%in the 1980s to 37%during 1995–1998.4Schultz and Zaman (2001)report that only 8.72%of the Internet firms that went public during January 1999to March 2000were profitable in the quarter prior to the IPO.3B.A.Jain et al./Journal of Business Venturing xx (2007)xxx –xxx Please cite this article as:Jain,B.A.et al.The path-to-profitability of Internet IPO firms.Journal of Business4 B.A.Jain et al./Journal of Business Venturing xx(2007)xxx–xxxnew ventures in that they were able to marshal substantial resources virtually independent of performance benchmarks(Mudambi and Treichel,2005).Since the Internet bubble burst in April2000,venture capital funds dried up and many firms that had successful IPOs went bankrupt or faced severe liquidity problems(Chang, 2004).Consequently,investors'attention shifted from their previously singular focus on growth prospects to the question of profitability with their new mantra being“path-to-profitability.”As such,market participants focused on not just whether the IPO firm would be able to achieve profitability but also“when”or“how soon.”IPO firms unable to credibly demonstrate a clear path-to-profitability were swiftly punished with steeply lower valuations and consequently faced significantly higher financing constraints.Since cash flow negative firms are not yet self sufficient and,therefore,dependent on external financing to continue to operate,the inability to raise additional capital results in a vicious cycle of events that can quickly lead to delisting and even bankruptcy.5Therefore,the actual attainment of post-IPO profitability represents an important milestone in the evolution of an IPO firm providing it with legitimacy and signaling its ability to remain economically viable through the ups and downs associated with changing capital market conditions.The theoretical framework supporting our analysis draws from signaling and agency theories as they relate to IPO firms.In our study,signaling theory provides the theoretical basis to evaluate the signaling impact of factors such as management quality,third party certification,institutional investor demand,and pre-IPO valuation uncertainty on the path-to-profitability.Similarly,agency theory provides the theoretical foundations to allow us to examine the impact of governance structure and change in top management ownership at the time of going public on the probability of achieving the post-IPO profitability milestone.Our empirical analysis is based on the hazard analysis methodology to identify the determinants of the probability of becoming profitable as a function of time for a sample of160Internet IPOs issued during the period1996–2000.Our study makes several contributions.First,we construct a theoretical framework based on agency and signaling theories to identify factors that may influence the path-to-profitability of IPO firms.Second,we provide empirical evidence on the economic viability of newly public firms(path-to-profitability and firm survival)in the Internet industry.Third, we add to the theoretical and empirical entrepreneurship literature that has focused on factors influencing the ability of entrepreneurial firms to achieve critical milestones during the transition from private to public ownership.While previous studies have focused on milestones during the private phase of firm development such as receipt of VC funding and successful completion of a public offering(Chang,2004;Dimov and Shepherd,2005; Beckman et al.,2007),our study extends this literature by focusing on post-IPO milestones. Finally,extant empirical evidence indicates that the phenomenon of young,early stage 5The case of E-Toys an Internet based toy retailer best illustrates this cyclical process.E-Toys was successful in developing an extensive customer base and a strong brand.However,the huge investment in technology, advertising,and promotion to sustain their activities as well as increased competition from both new entrants and old economy firms adopting the Internet to sell toys resulted in depressed profit margins and a longer than expected post-IPO time-to-profitability.Investors discouraged by the firm not reaching profitability within the expected time frame reacted negatively,leading to a steep drop in stock prices and consequently drying up of additional sources of external financing.As a result,the firm was forced to file for bankruptcy within a short period of time after its highly successful IPO.Please cite this article as:Jain,B.A.et al.The path-to-profitability of Internet IPO firms.Journal of Businessfirms belonging to relatively new industries being taken public amid a wave of investor optimism fueled by the promise of growth rather than profitability tends to repeat itself over time.6However,profitability tends to remain elusive and takes much longer than anticipated which results in investor disillusionment and consequently high failure rate among firms in such sectors.7Therefore,our study is likely to provide useful lessons to investors when applying valuations to IPO firms when this phenomenon starts to repeat itself.This articles proceeds as follows.First,using agency and signaling theories,we develop our hypotheses.Second,we describe our sample selection procedures and present descriptive statistics.Third,we describe our research methods and present our results.Finally,we discuss our results and end the article with our concluding remarks.3.Theory and hypothesesSignaling models and agency theory have been extensively applied in the financial economics,management,and strategy literatures to analyze a wide range of economic phenomena that revolve around problems associated with information asymmetry,moral hazard,and adverse selection.Signaling theory in particular has been widely applied in the IPO market as a framework to analyze mechanisms that are potentially effective in resolving the adverse selection problem that arises as a result of information asymmetry between various market participants (Baron,1982;Rock,1986;Welch,1989).In this study,signaling theory provides the framework to evaluate the impact of pre-IPO factors such as management quality,third party certification,and institutional investor demand on the path-to-profitability of Internet IPO firms.The IPO market provides a particularly fertile setting to explore the consequences of separation of ownership and control and potential remedies for the resulting agency problems since the interests of pre-IPO and post-IPO shareholders can diverge.In the context of the IPO market,agency and signaling effects are also related to the extent that insider actions such as increasing the percentage of the firm sold at the IPO,percentage of management stock holdings liquidated at the IPO,or percentage of VC holdings liquidated at the IPO can accentuate agency problems with outside investors and,as a consequence,signal poor performance (Mudambi and Treichel,2005).We,therefore,apply agency theory to evaluate the impact of board structure and the change in pre-to-post IPO ownership of top management on the path-to-profitability of Internet IPO firms.ernance structureIn the context of IPO firms,there are at least two different agency problems (Mudambi and Treichel,2005).The first problem arises as a result of opportunistic behavior of agents to 6Interestingly,just a few years after the bust,technology companies have again started going public while they are still unprofitable (Lashinsky,2006).7For instance,in the biotechnology industry where the first company went public a quarter century ago,public companies have taken in close to $100billion dollars from stock market investors but have delivered cumulative losses of more than $40billion (Hamilton,2004).Similarly,the disk drive industry in the early 1980s passed through phases similar to the Internet industry in terms of high firm founding rates,explosive growth,overoptimistic investors,IPO clusters,and high post-IPO failure rate (Lerner,1995).5B.A.Jain et al./Journal of Business Venturing xx (2007)xxx –xxx Please cite this article as:Jain,B.A.et al.The path-to-profitability of Internet IPO firms.Journal of Business6 B.A.Jain et al./Journal of Business Venturing xx(2007)xxx–xxxincrease their share of the wealth at the expense of principals.The introduction of effective monitoring and control systems can help mitigate or eliminate this type of behavior and its negative impact on post-issue performance.The extant corporate governance literature has argued that the effectiveness of monitoring and control functions depends to a large extent on the composition of the board of directors.We,therefore,examine the relationship between board composition and the likelihood and timing of post-IPO profitability.The second type of agency problem that arises in the IPO market is due to uncertainty regarding whether insiders seek to use the IPO as an exit mechanism to cash out or whether they use the IPO to raise capital to invest in positive NPV projects.The extent of insider selling their shares at the time of the IPO can provide an effective signal regarding which of the above two motivations is the likely reason for the IPO.We,therefore,examine the impact of the change in ownership of officers and directors around the IPO on the likelihood and timing of attaining post-issue profitability.3.1.1.Board compositionThe corporate governance literature has generally argued that a greater proportion of outside directors on the board increases board independence and results in better monitoring of management and thereby lowers agency costs(Fama,1980;Fama and Jensen,1983; Williamson,1984).Therefore,a greater proportion of outside directors on the board of Internet IPO firms is likely to lead to a more effective monitoring and control environment, thus ensuring that managers pursue shareholder value maximizing strategies.In addition, due to their short operating history,management of Internet IPO firms are unlikely to have developed the necessary links with customers,suppliers,bankers,and other important stakeholders of the firm.Outside directors can be instrumental in facilitating the establishment of such links,thereby allowing these firms to better compete in the product market as well as capital market.On the basis of the above discussion,we would expect Internet IPO firms with more independent boards to be on a faster path-to-profitability. Hypothesis1:The proportion of outsiders on the board of Internet IPO firms is positively related to the probability of profitability and negatively related to time-to-profitability during the post-IPO period.The extant empirical evidence on the positive relation between board composition and performance,however,has been mixed,both for IPO firms as well as more seasoned corporations(Dalton et al.,1998;Baker and Gompers,2003).The ambiguous results can be partly attributed to the tradeoff between the benefits from the presence of outside directors such as more effective monitoring and control,greater objectivity,and assistance in resource acquisitions versus the benefits provided by inside directors such as detailed knowledge of the firm's operations,customer requirements,and technology that in turn can help the strategic planning process.Viewed through the innovation and technology prism, high technology Internet IPO firms may actually benefit more from in-depth technological knowledge,expertise,commitment,and innovative thinking that insiders bring to the board,rather than from the monitoring and control benefits provided by outside directors.In support of this argument,Zahra(1996)points out that boards comprised of a higher proportion of insiders may be more innovative and better positioned to serve management Please cite this article as:Jain,B.A.et al.The path-to-profitability of Internet IPO firms.Journal of Businessas knowledgeable sounding boards in the formulation of strategy.Further,since high technology Internet firms are unlikely to generate substantial free cash flows in the period immediately after the IPO,the potential for wasteful expenditure is lower,and therefore,the benefits of monitoring and control provided by outsiders is less likely to be substantive.If there is a greater need for creative thinking and decision-making in high technology knowledge-based industries that only insiders are uniquely qualified to provide,we expect a negative relation between the proportion of outsiders on the board and the probability of profitability and a positive relation with time-to-profitability.Hypothesis 1A:The proportion of outsiders on the board of Internet firms is negatively related to the probability of profitability and positively related to time-to-profitability during the post-IPO period.3.1.2.Ownership of officers and directorsCorporate governance studies have also focused extensively on corporate ownership and its impact on performance,both in isolation and in conjunction with board composition.Both agency and signaling theories provide similar predictions regarding the relationship between the extent of insider ownership and post-issue performance.Agency theory suggests that high insider ownership reduces agency conflicts and enhances organizational performance,while signaling theory argues that higher insider ownership is a credible signal of insider's confidence regarding the future prospects of the firm.The change in the ownership of the top managers and directors around the offering can be viewed as an important signal of the issuing firm's future prospects (Leland and Pyle,1977).In the context of the IPO market,a large post-IPO decline in top management ownership can be interpreted as a signal of their lack of confidence in the ability of the firm to generate sufficient cash flows to reach the profitability milestone.Additionally,any decline in the ownership stakes of owners/managers is likely to adversely affect post-IPO performance due to higher agency costs (Jensen and Meckling,1976).While the extent of the change in ownership of insiders around the IPO is an informative signal for all types of IPO firms,it is particularly relevant in the context of Internet firms that go public while predominantly unprofitable and where the informational and incentive problems are particularly acute.For instance,Mudambi and Treichel (2005)find that a substantial reduction in equity holdings of the top management of Internet firms signals an impending cash crisis.We,therefore,argue that the greater the decline in the pre-to-post IPO ownership of top managers and directors,the lower the probability of attaining profitability,and consequently the longer the time-to-profitability.Hypothesis 2:The decline in ownership of officers and directors from pre-to-post-IPO is negatively related to the probability of attaining profitability and positively related to time-to-profitability after the IPO.3.2.Management qualityAn extensive body of research has examined the impact of top management team (TMT)characteristics on firm outcomes for established firms as well as for new ventures by drawing from human capital and demography theories (Eisenhardt and Schoonhoven,7B.A.Jain et al./Journal of Business Venturing xx (2007)xxx –xxx Please cite this article as:Jain,B.A.et al.The path-to-profitability of Internet IPO firms.Journal of Business8 B.A.Jain et al./Journal of Business Venturing xx(2007)xxx–xxx1990;Finkelstein and Hambrick,1990;Wiersema and Bantel,1992;Hambrick et al.,1996; Beckman et al.,2007).For instance,researchers drawing from human capital theories study the impact of characteristics such as type and amount of experience of TMTs on performance(Cooper et al.,1994;Gimeno et al.,1997;Burton et al.,2002;Baum and Silverman,2004).Additionally,Beckman et al.(2007)argue that demographic arguments are distinct from human capital arguments in that they examine team composition and diversity in addition to experience.The authors consequently examine the impact of characteristics such as background affiliation,composition,and turnover of TMT members on the likelihood of firms completing an IPO.Overall,researchers have generally found evidence to support arguments that human capital and demographic characteristics of TMT members influence firm outcomes.Drawing from signaling theory,we argue that the quality of the TMTof IPO firms can serve as a signal of the ability of a firm to attain post-IPO profitability.Since management quality is costly to acquire,signaling theory implies that by hiring higher quality management,high value firms can signal their superior prospects and separate themselves from low value firms with less capable managers.The beneficial impact of management quality in the IPO market includes the ability to attract more prestigious investment bankers,generate stronger institutional investor demand,raise capital more effectively,lower underwriting expenses, attract stronger analyst following,make better investment and financing decisions,and consequently influence the short and long-run post-IPO operating and stock performance (Chemmanur and Paeglis,2005).Thus,agency theory,in turn,would argue that higher quality management is more likely to earn their marginal productivity of labor and thus have a lower incentive to shirk,thereby also leading to more favorable post-IPO outcomes.8 We focus our analyses on the signaling impact of CEO and CFO quality on post-IPO performance.We focus on these two members of the TMT of IPO firms since they are particularly influential in establishing beneficial networks,providing legitimacy to the organization,and are instrumental in designing,communicating,and implementing the various strategic choices and standard operating procedures that are likely to influence post-IPO performance.3.2.1.CEO characteristicsCEOs play a major role in designing and implementing strategic choices and policies for their firms.Their actions can have long-term significance since they typically define long-term policies of the firm(Parrino,1997).While the role and influence of CEOs on strategic choices,incentive mechanisms,accountability issues,and consequently performance is vital for all types of organizations,their impact is especially relevant for newly public firms that face significant competitive,product market,and financing challenges during the post-IPO phase.The role and impact of CEOs can be even more critical for the subset of technology related IPO firms since they may require fundamentally different skill sets and competencies from CEOs compared to those required to run companies in more traditional industries.We assess CEO quality by focusing on variables that capture the extent of general and specific human capital developed by them through their prior work experience and their risk propensity and decision-making behavior.In distinguishing between general and specific8We thank the Associate Editor,Phil Phan for suggesting this explanation.Please cite this article as:Jain,B.A.et al.The path-to-profitability of Internet IPO firms.Journal of Business。
企业盈利质量分析中英文对照外文翻译文献
企业盈利质量分析中英文对照外文翻译文献企业盈利质量分析中英文对照外文翻译文献企业盈利质量分析中英文对照外文翻译文献(文档含英文原文和中文翻译)原文：Measuring the quality of earnings1. IntroductionGenerally accepted accounting principles (GAAP) offer some flexibility in preparing the financial statements and give the financial managers some freedom to select among accounting policies and alternatives. Earning management uses the flexibility in financial reporting to alter the financial results of the firm (Ortega and Grant, 2003).In other words, earnings management is manipulating the earning to achieve a企业盈利质量分析中英文对照外文翻译文献predetermined target set by the management. It is a purposeful intervention in the external reporting process with the intent of obtaining some private gain (Schipper, 1989).Levit (1998) defines earning management as a gray area where the accounting is being perverted; where managers are cutting corners; and, where earnings reports reflect the desires of management rather than the underlying financial performance of the company.The popular press lists several instances of companies engaging in earnings management. Sensormatic Electronics, which stamped shipping dates and times on sold merchandise, stopped its clocks on the last day of a quarter until customer shipments reached its sales goal. Certain business units of Cendant Corporation inflated revenues nearly $500 million just prior to a merger; subsequently, Cendant restated revenuesand agreed with the SEC to change revenue recognition practices. AOL restated earnings for $385 million in improperly deferred marketing expenses. In 1994, the Wall Street Journal detailed the many ways in which General Electric smoothed earnings, including the careful timing of capital gains and the use of restructuring charges and reserves, in response to the article, General Electric reportedly received calls from other corporations questioning why such common practices were“front-page〞 news.Earning management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers (Healy and Whalen, 1999).Magrath and Weld (2002) indicate that abusive earnings management and fraudulent practices begins by engaging in earnings management schemes designed primarily to “smooth〞 earnings to meet internally or externally imposed earnings forecasts and analysts’ expectations. Even if earnings management does not explicitly violate accounting rules, it is an ethically questionable practice. An organization that manages its earnings sends a企业盈利质量分析中英文对照外文翻译文献message to its employees that bending the truth is an acceptable practice. Executives who partake of this practice risk creating an ethical climate in which other questionable activities may occur. A manager who asks the sales staff to help sales one day forfeits the moral authority to criticize questionable sales tactics another day.Earnings management can also become a very slippery slope, which relatively minor accounting gimmicks becoming more and more aggressiveuntil they create material misstatements in the financial statements (Clikeman, 2003)The Securities and Exchange Commission (SEC) issued three staff accounting bulletins (SAB) to provide guidance on some accounting issues in order to prevent the inappropriate earnings management activities by public companies: SAB No. 99 “Materiality〞, SAB No. 100 “Restructuring and Impairment Charges〞 and SAB No. 101 “Revenue Recognition〞.Earnings management behavior may affect the quality of accounting earnings, which is defined by Schipper and Vincent (2003) as the extent to which the reported earnings faithfully represent Hichsian economic income, which is the amount that can be consumed (i.e. paid out as dividends) during a period, while leaving the firm equally well off at the beginning and the end of the period.Assessment of earning quality requires sometimes the separations of earnings into cash from operation and accruals, the more the earnings is closed to cash from operation, the higher earnings quality. As Penman (2001) states that the purpose of accounting quality analysis is to distinguish between the “hard〞 numbers resulting from cash flows and the “soft〞 numbers resulting from accrual accounting.The quality of earnings can be assessed by focusing on the earning persistence; high quality earnings are more persistent and useful in the process of decision making.Beneish and Vargus (2002) investigate whether insider trading is informative about earnings quality using earning persistence as a measure for the quality of earnings, they find that income-increasing accruals are significantly more persistent for firms with abnormal insider buying and significantly less persistent for firms with abnormal insider selling, relative to firms which there is no abnormal insider trading.Balsam et al. (2003) uses the level of discretionary accruals as a direct measure企业盈利质量分析中英文对照外文翻译文献for earning quality. The discretionary accruals model is based on a regression relationship between the change in total accruals as dependent variable and change in sales and change in the level of property, plant and equipment, change in cash flow from operations and change in firm size (total assets) as independent variables. If the regression coefficients in this model are significant that means that there is earning management in that firm and the earnings quality is low.This research presents an empirical study on using three different approaches of measuring the quality of earnings on different industry. The notion is; if there is a complete consistency among the three measures, a general assessment for the quality of earnings (high or low) can be reached and, if not, the quality of earnings is questionable and needs different other approaches for measurement and more investigations and analysis.The rest of the paper is divided into following sections: Earnings management incentives, Earnings management techniques, Model development, Sample and statistical results, and Conclusion.2. Earnings management incentives 2.1 Meeting analysts’ expectations In general, analysts’ expectations and company predictions tend to address two high-profile components of financial performance: revenue and earnings from operations.The pressure to meet revenue expectations is particularly intense and may be the primary catalyst in leading managers to engage in earning management practices that result in questionable or fraudulent revenue recognition practices. Magrath and Weld (2002) indicate that improperrevenue recognition practices were the cause of one-third of all voluntary or forced restatements of income filed with the SEC from 1977 to 2000. Ironically, it is often the companies themselves that create this pressure to meet the market’s earnings expectations. It is common practice for companies to provide earnings estimates to analysts and investors. Management is often faced with the task of ensuring their targeted estimates are met.企业盈利质量分析中英文对照外文翻译文献Several companies, including Coca-Cola Co., Intel Corp., and Gillette Co., have taken a contrary stance and no longer provide quarterly and annual earnings estimates to analysts. In doing so, these companies claim they have shifted their focus from meeting short-term earnings estimates to achieving their long-term strategies (Mckay and Brown, 2002).2.2 To avoid debt-covenant violations and minimize political costs Some firms have the incentive to avoid violating earnings-based debt covenants. If violated, the lender may be able to raise the interest rate on the debt or demand immediate repayment. Consequently, some firms may use earnings-management techniques to increase earnings to avoid such covenant violations. On the other hand, some other firms have the incentive to lower earnings in order to minimize political costs associated with being seen as too profitable. For example, if gasoline prices have been increasing significantly and oil companies are achieving record profit level, then there may be incentive for the government to intervene and enact an excess-profit tax or attempt to introduce price controls.2.3 To smooth earnings toward a long-term sustainable trendFor many years it has been believed that a firm should attempt to reduce the volatility in its earnings stream in order to maximize share price. Because a highly violate earning pattern indicates risk, therefore thestock will lose value compared to others with more stable earnings patterns. Consequently, firms have incentives to manage earnings to help achieve a smooth and growing earnings stream (Ortega and Grant, 2003).2.4 Meeting the bonus plan requirementsHealy (1985) provides the evidence that earnings are managed in the direction that is consistent with maximizing executives’ earnings-based bonus. When earnings will be below the minimum level required to earn a bonus, then earning are managed upward so that the minimum is achieved and a bonus is earned. Conversely, when earning will be above the maximum level at which no additional bonus is paid, then earnings are managed downward. The extra earnings that will not generate extra bonus this current period are saved to be used to earn a bonus in a future period.。
中国银行业的改革和盈利能力毕业论文中英文资料对照外文翻译文献综述
中国银行业的改革和盈利能力毕业论文中英文资料对照外文翻译文献综述中英文资料对照外文翻译文献综述China’s Banking Reform and Profitability1Erh-Cheng Hwa Yang Lei1. IntroductionThe World Bank (1997) once claimed that China’s financial sector was the soft-belly in the economy. Financial sector reform has long been argued as necessary to raise efficiency in the use of the capital and in rebalancing the economy toward consumption-based growth, without which the country’s growth sustainability is in jeopardy (see Lardy, 1998; Prasad, 2007).Indeed, not too long ago, China’s state banks were deemed “technically insolvent”and their survival hinged solely on the nation’s abundant liquidity.However, after the launching of banking reform, strong profitability has returned to state commercial banks recently. But it may be too early to declare a complete victory on banking reform as yet, since Chinese state banks have embarked on the path of reform not too long ago. In addition,their strong financial performance has ridden on the back of strong but unsustainable growth. As growth has begun to soften under the weight of a global recession in 2008, banks are expected to navigate in a more difficult economic terrain than hitherto. The aim of this paper is not to evaluate the effect of banking reform on bank performance, which is better tackled after the completion of a full credit cycle. Rather, our aim is to take stock of the progress in reforming China’s state banks by reviewing the banking reformstrategy and analyzing their recent strong post-reform financial performancewhich, however, cannotbe entirely separated from reforms efforts1Review of Pacific Basin Financial Markets and PoliciesVol. 13, No. 2 (2010) 215–236World Scientific Publishing Co.and Center for Pacific Basin Business, Economics and Finance ResearchDOI: 10.1142/S0219091510001925undertaken thus far.This paper has three sections. In Section 2, we review the reform strategy of China’s large state banks, which is the main thr ust of China’s banking reform, as well as its implementation. The Section 3 analyzes 2007 financial performance focusing on the four largest state commercial banks that have floated shares in the market: Industrial Commercial Bank of China (ICBC),China Construction Bank (CCB), Bank of China (BOC), and Bank of Communications (BOCOM). The conspicuous exception is Agriculture Bank of China (ABC), which is still in the process of restructuring for market listing at an appropriate time later. Section 4 concludes with an assessment on bank performance.2. Bank Reform Strategy and Its Implementation2.1. Bank reform strategyBefore reform, state banks were solely owned by the State and served national economic policy goals.1 Since they were not wholly profit-making commercial entities, common commercial banking criteria for evaluating their financial performance do not apply strictly. Nevertheless, as soon as the country decided to embark upon the path of a socialist market economy in the October 1992 CCP Congress, commercialization of the state banks had become a foregone conclusion. The goal of banking reform is to turn state banks into commercial entities that arecompetitive in the marketplace and can provide efficient intermediation of the nation’s saving. Given their dominance in financial intermediation, the banks play a crucial role in the efficient allocation of capital.2.1.1. Creating the enabling environment for banking reformThe country’s market reform and opening program has greatly accelerated since 1992 when in October that year the 14th CCP Congress declared that the goal of reform and opening was to create a socialist market economy,which effectively ended the experimental nature of economic reform and opening program launched since the late 1970s. The firming up of market-oriented reforms has created an enabling environment for a host of reforms central to the socialist market economy construct including foremost the banking reform. In early 1994, in response to the inflation threat, the government launched macroeconomic reform encompassing central banking,exchange rate management, and fiscal policy and taxation. The macroeconomic reform permitted the central authorities to regain macroeconomiccontrol lost to local authorities in the decade of the 1980s under the decentralization policy of “fang quan rang li”.2 While decentralization ushered a period of rapid growth, it also generated significant macroeconomic instability.Indeed, the pursuit of macroeconomic reform significantly dampened macroeconomic cycles in the 1990s. Second, in the same year, the government created three policy banks —State Development Bank, Agriculture Development Bank, China ExportImport Bank —to relieve state commercial banks of their traditional policy mandates.Third, the government promulgated central banking andcommercial banking laws in 1995 to provide the legal foundation for banking reform.Fourth, beginning from 1996 the government began to vigorously pursuit enterprise reform that paved the way for banking reform, even this resulted in large and painful layoffs of redundant state workers. Pursuingenterprise reform ahead of banking reform was necessary considering that state-owned enterprises were the main clients of state banks and hence their main source of non-performing loans NPLs, which was at the same time the contingent liability to the government. Hence, unless the reform of stateowned enterprises takes hold, any reform effort of the state banks would be in vain. On the other hand, as soon as the state-owned enterprise reform was pressed forward, the banking reform could no longer be postponed. This is because as state-owned enterprises were restructured, liquidated, merged, or bankrupted out of existence, the banks must start to recognize the hidden losses on their books. This, in turn, triggered the need to recapitalize the banks, as a large amount of non-performing loan was written-off.Fifth, the State Council in February 2002 decided to reform solely stateowned commercial banks into internationally competitive financial enterprises, transform them into state-controlled shareholding commercial banks,and encourage listing their shares in the market.Sixth, China Banking Supervisory Committee was created in 2003 to raise the regulatory capacity to supervise banks. Finally, adhering to the 2001 WTO accession agreement, the government uses the entry of foreign banks into the local banking market to inject competitive pressure to the local banking industry in orderto gain efficiency. Beginning from the end of 2006, foreign banks can engage in local currency business.2.1.2. Reforming corporate governance and restructuringthe balance sheetThe country’s large state banks have followed several steps to undertake internal corporate reform. The first is to reform the corporate governance by inviting other investors to dilute the sole state ownership while still retaining its dominance. In particular, the banks have made an effort to seek foreign strategic partnership with the view to bringing in modern banking practices and technology. The broadening of ownership also entails selling a portion of bank shares to the equity market to make bank management accountable to the marketplace. To successfully woo outside investors, be it strategic partners or public investors, the banks must put forward a creditable inhouse reform plan and implement it credibly. No doubt, the better and more credible the internal reform plan is, the more likely it is for the banks to attract reputable outside partners and fetch a better deal with their counterparts or in the equity market.Hence, the first step the government undertook was to strengthen the balance sheet of state banks whose credit flows had been clogged up by inadequate capital and piles of bad debts accumulated under the previous economic planning regime. In 1998, the government issued RMB270 billion (US$32.6 billion) worth of 30-year fiscal bonds to recapitalize the balance sheets of the four largest state banks: ICBC, BOC, CCB, and ABC in order to comply with the international capital adequacy standards. Again, on December 30, 2003, the government provided US$22.5 billion each to CCB and BOC, with US$15 billion provided later in April 2005 to ICBC to support theirrespective listings in the Hong Kong stock exchange.Among the four largest state banks, CCB was the first to have its shares successfully listed in the Hong Kong stock exchange and thus the first to have its reform effort passed by the market test. In addition, as part of the scheme of recapitalization, the banks also issued subordinated debt to the local market:BOC, RMB60 billion; CCB, RMB40 billion; ICBC, RMB35 billion; and BOCOM, RMB12 billon.In 1999, the government created four asset management corporations AMCs, one for each of the “big four”: ICBC, CCB, BOC, and ABC, to manage RMB1.4 trillion of loans purchased from the books of the state banks at face value, of which 1.3 trillion were deemed non-performing (about 15% of GDP). The transaction was financed partly by central bank loan(RMB573 billion) and partly by treasury bonds (RMB820 billion). A second transferring of NPLs in the amount of RMB1.186 trillion to the AMCs took place during the period from June 2004 through June 2006.The banks also launched reform measures to improve internal management including strengthening the human resource base, introducing modern risk management practices, and moving up the standard of NPL classification to comply with the international standards.2.2. Implementation of reform2.2.1. Seeking diversification and attracting foreign strategic partners Following the blueprint of reform, the banks have successfully launched and implemented the reform strategy. ICBC, CCB, BOC, and BOCOM all have their full state stake in the company diluted to below 70% by incorporating non-state ownerships, which includes foreign ownership, domestic legalpersons, and public ownership (publicly owned and traded shares). Among non-state owners, foreign strategic partnership usually has the highest stake in the company: ICBC, 7.2%, BOC, 13.9%, CCB, 10.3%, and BOCOM,18.7% (Table 1).The participation of foreign and domestic capital as well as public shares in state commercial banks has not only strengthened bank capital, but also exerted a positive influence on the corporate governance, in particular in the case of foreign participation, in so far as it stems the undue intrusion of government into the banking business. Second, all state commercial banks have installed modern corporate governance structure encompassing shareholders congress, corporate board plus outside directors and supervisors,supervisory board, and senior management structure. By the end of 2007, 33 foreign institutional investors have invested in twenty-five domestic banks, with a total capital injection of US$21.3 billion.These foreign strategic investors have entered in various strategic corporative agreements with domestic partners in widely diversified areas of banking,including retail banking, corporate governance and risk-management,trading, RMB derivatives and currency swaps, foreign exchange structured products, and trade and small-and-medium enterprises SME financing. In addition, domestic banks and their foreign partners share their networks and custom base for providing services and cross-selling financial products.Finally, human resource development program is a common feature in strategic corporative agreements, with training courses offered in SME management and financing, wealth management, fund trading, risk management, and implementation of the Basel Capital Agreements, etc.2.2.2. Successful public listingsAfter launching internal restructuring and successful attraction of reputable foreign strategic partners, state commercial banks were successful in listing their shares in the Hong Kong (H share) and Shanghai (A share) stock exchanges and hence for the first time subject to the market discipline:BOCOM, June 2005; CCB, October 2005; BOC, June 2006; ICBC, October 2006 (which was the first double listing in both the Hong Kong stock exchange and the Shanghai stock exchange). Public listing of bank shares together raised RMB445 billion (US$60 billion) in the open market, about 26% of combined net capital. In comparison, the funds raised through foreign strategic partners was US$15 billion. In 2007, two small shareholding banks were listed in the Shanghai stock exchange, bringing the total listed to seven among 12 shareholding banks. In addition, three city commercial banks based, respectively, in Beijing, Nanjing, and Ningbo were listed in the Shanghai A share market, paving the way for other city commercial banks to restructure and then seek listing in the stock exchange. Having benefited from rising share prices, ICBC, CCB, and BOC were, respectively, the first,second, and the fourth largest bank in the world by market capitalization at the end of 2007: US$338.9 billion, US$2202.5 billion, and US$197.8 billion.2.2.3. Strengthening capitalBy the end of 2007, nearly 80% of banks by asset have fulfilled capital adequacy standards. The capital adequacy ratio for the four listed state commercial banks was, respectively, 13% for ICBC; 13.3% for BOC; 12.6% for CCB; and 14.1 for BOCOM. The core capital adequacy ratio was, respectively, 11% for ICBC;10.7% for BOC;10.4% for CCB; and 10.2% for BOCOM.2.2.4. Building risk management systemsSince 2006 CCB and other large state commercial banks have begun to introduce a vertical risk management system to consolidate risk management into the hands of the newly created chief risk officer. The reform has helped to stem undue interferences in the loan decision process at the local level. At the same time, by taking advantage of information technology, banks have begun to streamline and optimize the operational processes and procedures in order to reduce operational risks. Banks have also begun to use quantitative risk models to gauge and simulate various risk scenarios facing them such as stress test. The concept of economic/risk capital has been adopted to manage risk quotas, allocate bank resources, and pricing of products. Banks have alsostrengthened the analysis of market and liquidity risks while controlling operational risks through improved internal control procedures by employing quantitative tools and models. Last but not least, banks have taken steps to build a new risk or credit culture.2.2.5. Pursuing strategic transformation of the business modelChinese banks have traditionally focused on corporate businesses, the wholesale banking so to speak. However, as the local capital market gradually matures and the income and wealth of Chinese households continue to grow apace, the banks find growing business opportunities in consumer-oriented financial services such as mutual funds, mortgage financing, wealth management, and personal loans. These are also areas of financial services where the newly arrived foreign banks aim tocapture with their competitive strength.Hence, both for seeking new sources of profit growth and achieving a more diversified and balanced revenue base, as well as for meeting the competition from foreign banks head on, the Chinese banks are compelled to seize the opportunity and meet the challenge to embark on the path of a strategic transformation of the traditional business model toward retailing banking.New thrusts of retail banking include credit card, personal loans, and wealth management, mutual fund, insurance products and other products generating fee-based income. Retail banking, in turn, has called for greater investment in information technology to develop efficient systems in processing personal loan, internet banking, and tele-banking, as well as improve the efficiency of retail networks to better serve the needs of retail /doc/e59003713.html,rge state commercial banks like CCB have also initiated special programs to cater to the need of small and medium enterprises, SMEs. In addition, they have started to branch out into new areas of financial services, thus gradually and steadily moving toward universal banking encompassing investment banking, issuance, securities, private banking, and financial leasing.Banks have also started to grow overseas business either by establishing more new overseas branches or through merging and acquisitions of foreign financial entities.4. Conclusion: Assessment of Bank PerformanceThe strong financial performance of large state banks was carried into the first half of 2008 even as growth slowed by nearly 2 percentage points to 10.4% from the firsthalf of 2007 due to a combination of falling external demand and tighter credit policy. In the first half of 2008, net profit (profitafter tax) grew, respectively, 71.3% for CCB, 56.8% for ICBC, and 36% for BOC over a year ago. Although the reduction of corporate income tax from 33% to 25% accounted for partly the increase in profit, but the key underlying factors driving profit growth remained the same as the last year. First,net interest income continued to benefit from rising interest margins as well as rapid asset growth and still is the main source of operating income, possibly for the foreseeable future. Second, fee and commission income again witnessed an explosive growth: CCB, 59.3%; BOCOM, 50%, ICBC, 48%;BOC, 45.1%, in spite of a sharply cooled stock market that has curtailed income derived from hot-selling market-based financial products of the previous year such as stock mutual funds. For large state commercial banks,the share of fee and commission income in total operating income reached a new record in the first half of 2008: CCB 14.9%; ICBC, 12.3%; BOC,31.4%. In the meantime, asset quality continued to improve as the NPL ratio continued to drop. By the end of June, the NPL ratio of ICBC and CCB were, respectively, 2.4% and 2.2%, representing a decline of 0.33 and 0.39 percentage points, respectively, from the end of 2007.Judged by record profit, much improved asset quality, and high ROE,the recent financial performance of the four large state commercial banks is nothing short of spectacular. Furthermore, as fee and commission income and more broadly retail banking revenue has taken off to become a strong source of profit growth, banks appear on track to realize their long-term strategic goal of diversifying into a more stable base of income generation that is less prone to business cycle risks. Thus, large state commercial banks appear to have come a long way in reforming themselves into a modern commercial bank. This outcome should be asurprise to some of earlier research findings that argue state commercial banks did not seem to have changed bank behavior fundamentally after launching banking reform. For instance,Podpiera (2006) shows that banks do not appear to make lending decision based on a commercial basis. Dobson and Kashyap (2006) assemble macroeconomic, microeconomic and anecdotal evidence suggesting that the pressure to make policy loans is continuing despite the reforms. However, the recent empirical work by Demetriades et al. (2008) seems to counter their findings by showing that bank loans is positively correlated with future value added and TFP growth during 1999–2005, even for state-owned enterprises. Moreover they find that firms with access to bank loans tend to grow faster in regions with greater banking sector development.Can this financial performance of banks be sustained? It appears that the good financial performance has been the result of two crucial factors,although it is not easy to delineate the two. First, a supportive macroeconomic environment —with a strong growth averaging 10.7% per annum over the period: 2003–2007 and a partially liberalized interest rate regime —helped to boost revenues. Second, banking reform has been instrumental in raising efficiency and holding down costs, both of which boost the return on capital.Compared to the impact of banking reform, the supportive macroeconomic environment exerts more a cyclical than fundamental impact on bank performance and is thus a less sustainable force. Indeed, the surging inflation as well as bubbles in the stock and real estate markets in 2007 already served as warning signals that the high growth in last several years is unsustainable. In 2008, the economic growth slowed sharply as aresult of tightened money and credit policy and an unexpected large decline in external demand that sharply slowed down export growth. Although bank performance held up pretty well so far, a precipitous economic slowdown would sooner or later raise business risks and worsen asset quality for the banks. The immediate challenge of banks is how to skillfully navigate the more difficult economic water by properly controlling risks and staying on the course of restructuring and reform.If the successful public listing marked the end of the first phase of banking reform, it is clear that banks have entered a new phase of reform only a short while ago with much of the journey still lying ahead. Many of the recently launched corporate reforms: governance, internal control and operation procedures, risk management, and human resources are still work in progress and have not yet been brought to fruition. Banks are also in the early phase in adapting to the new business model mandating more attention being paid to retail customers and commission and fee-based incomes. Hence, they have to continue to be valiant on reform and learn to adapt to the vagaries of financial markets while catering to the evolving needs of customers as their demand for new financial services grow.While putting the bet on banking reform, there is no reason to be overly pessimistic on the short-term macroeconomic risks. China ran a budget surplus and had a lowgovernment debt of about 22% of GDP in 2007, as well as a relatively low urbanization ratio at around 44%. More importantly, Chinese banks have embarked on a reform path with healthy balance sheets and a strong capital base. Thus, China enjoys considerable flexibility to deploy a strong public sector investment program in order to strengthen domestic demandand mitigate the downside risks caused by the expected sharp decline in exports. The government unveiled such a public sector investment program with price tag of RMB4 trillion in mid-November 2008 (about 12% of GDP) that covered two years to last through 2010. The program complimented the expansionary money and credit policy that had been initiated a couple of months ago. If properly implemented and, in particular, in conjunction with structural rebalancing policies, the program should help to sustain strong growth in the short-run and even more important to regain macroeconomic balance over the medium-term.。
企业利润分析中英文对照外文翻译文献
中英文对照外文翻译文献(文档含英文原文和中文翻译)原文：Profit PatternsThe most important objective of companies is to create, develop and maintain one or more competitive advantages in order to generate dividends for the shareholders. For a long time, it was simply a question of dominating the market, either by costs or by a policy of differentiation. As Michael Porter advised, it was essential to avoid being “stuck in the middle”. This way of thinking set up competitive rivalry in a closed world, and tended towards stability. This model is less and less relevant today forwhole sectors of the economy. We see a multitude of strategic movements which defy the logic of the old system. “Profit Patterns”lists numerous strategies which have joined the small number that we knew before. These patterns often combine to give rise to strategic models which are better adapted to the new and changing needs of the consumer.Increasing the value of a company depends on its capacity to predict Value migration from one economic sector to another or from one company to another has unimaginable proportions, in particular because of the new phenomena that mass investment and venture capital represent. The public is looking for companies that will succeed in the future and bet on the winner.Major of managers have a talent for recognizing development market trends There are some changing and development trends in all business sectors. They can be erected into models, thereby making it possible to acquire a technique for predicting them. This consists of recognizing them in the actual economic context. This book proposes thirty strategic prediction models divided into seven families. Predicting is not enough: one still has to act in time! Managers analyze development trends in the environment in order to identifyopportunities. They then have to determine a strategic plan for their company, and set up a system aligning the internal and external organizational structure as a function of their objectives.For most of the 20th century, mastering strategic evolution models was not a determining factor, and formulas for success were fixed and relatively simple. In industry, the basic model stated that profit was a function of relative market share. T oday, this rule is confronted with more and more contradictions: among car manufacturers for example, where small companies like T oyota are more profitable than General Motors and Ford. The highest rises in value have become the exclusive right of the companies with the most efficient business designs. These upstart companies have placed themselves in the profit zone of their sectors thanks, in part, to their size, but also to their new way of doing business –exploiting new rules which are sources of value creation. Among the new rules which define a good strategic plan are:1. Strong orientation towards the customer2. Internal decisions which are coherent with the overall activity, concerning the products and services as well as the involvement in the different activities of the value chain3. An efficient mechanism for value–capture.4. A powerful source of differentiation and of strategic control, inspiring investor confidence in future cash-flow.5. An internal organization carefully designed to support and reinforce the company’s strategic plan.Why does value migrate? The explanation lies largely in the explosion of risk-capital activities in the USA. Since the 40’s, of the many companies that have been created, about a thousand have allowed talented employees, the “brains”, to work without the heavy structures of very big companies. The risk–capital factor is now entering a new phase in the USA, in that the recipes for innovation and value creation are spreading from just the risk-capital companies to all big companies. A growing number of the 500 richest companies have an internal structure for getting into the game of investing in companies with high levels of value-creation. Where does this leave Eur ope? According to recent research, innovation in strategic thinking is under way in Europe, albeit with a slight time-lag. Globalization is making the acceptation of these value-creation rules a condition of global competitively .There is a second phenomenon that has an even more radical influence on value-creation –polarization: The combination of a convincing and innovative strategic plan, strategic control and a dominant market share creates a terrificincrease in investor confidence. The investors believe that the company has established its position of strength not only for the current, but also for the next strategic cycle. The result is an exponential growth in value, and especially a spectacular out-distancing of the direct rivals. The polarization process typically has two stages. In phase 1, the competitors seem to be level. In fact, one of them has understood, has “got it”, before the others and is investing in a new strategic action plan to take into account the pattern which is starting to redefine the sector. Phase 2 begins when the conditions are right for the pattern to take over: at this moment, the competitor who “got it”, attracts the attention of customers, investors and potential recruits (the brains). The intense public attention snowballs, the market value explodes to leave the nearest competitor way behind. Examples are numerous in various sectors: Microsoft against Apple and Lotus, Coca-Cola against Pepsi, Nike against Reebok and so on. Polarization of value raises the stakes and adds a sense of urgency: The first company to anticipate market change and to take appropriate investment decisions can gain a considerable lead thanks to recognition by the market.In a growing number of sectors today, competition is concentrated on the race towards mindshare. The companywhich leads this race attracts customers who attract others in an upwards spiral. At the transition from phase 1 to phase 2, the managing team’s top priority is to win the mindshare battle. There are three stages in this strategy: mind sharing with customers gives an immediate competitive advantage in terms of sales; mind sharing with investors provides the resources to maintain this advantage, and mind sharing with potential recruits increases the chances of maintaining the lead in the short and the long term. This triple capture sets off a chain reaction releasing an enormous amount of economic energy. Markets today are characterized by a staggering degree of transparency. Successes and failures are instantaneously visible to the whole world. The extraordinary success of some investors encourages professional and amateurs to look for the next hen to lay a golden egg. This investment mentality has spread to the employment market, where compensations (such as stock-options) are increasingly linked to results. From these three components - customers, investors and new talent –is created the accelerating phenomenon, polarization: thousands of investors look towards the leader at the beginning of the race. The share value goes up at the same time as the rise in customer numbers and the public perception that the current leader willbe the winner. The rise in share-price gets more attention from the media, and so on. How to get the knowledge before the others, in order to launch the company into leadership? There are several attitudes, forms of behavior and knowledge that can be used: being paranoiac, thinking from day to day that the current market conditions are going to change; talking to people with different points of view; being in the field, looking for signs of change. And above all, building a research network to find the patterns of strategic change, not only in one’s particular sector, but in the whole economy, so as always to understand the patterns a bit better and a bit sooner than the competitors.Experienced managers can detect similarities between movements of value in different circumstances. 30 of these patterns can be divided into 7 categories.Some managers understand migrations of value before other managers, allowing them to continually improvise their business plan in order to find and exploit value. Experience is an obvious advantage: situations can repeat themselves or be similar to others, so that experienced managers recognize and assimilate them quickly. There about 30 patterns .which can be put into 7 groups according to their key factors. It is important to understand that the patterns have three general characteristics:multiplicity, variants and cycles. The principle of multiplicity indicates that while a sector or a company may be affected by just one simple strategic pattern, most situations are more complicated and involve several simultaneously evolving patterns. The variants to the known models are developed in different circumstances and according to the creativity of the users of the models. Studying the variants gives more finesse in model-analysis. Finally, each model depends on economic cycles which are more or less long. The time a pattern takes to develop depends on its nature and also on the nature of the customers and sector in question.1) The first family of strategic evolution patterns consists of the six “Mega patterns”: these models do not address any particular dimension of the activity (customer, channels of distribution and value chain), but have an overall and transversal influence. They owe their name “Mega”to their range and their impact (as much from the point of view of the different economic sectors as from the duration). The six Mega models are: No profit, Back to profit, Convergence, Collapse in the middle, De facto standard and T echnology shifts the board. •The No profit pattern is characterized by a zero or negative result over several years in a company or economic sector. The first factor which favors this pattern is the existence of a singlestrategic a plan in several competitors: they all apply differentiation by price to capture market-share. The second factor is the loss of the “crutch”of the sector, that is the end of a system of the help, such as artificially maintained interest levels, or state subsidies. Among the best examples of this in the USA are in agriculture and the railway industry in the 50’s and 60’s, and in the aeronautical industry in the 80’s and 90’s. •The Back to profit pattern is characterized by the emergence of innovative strategic plans or the projects which permit the return of profits. In the 80’s, the watch industry was stagnating in a no profits zone. The vision of Nicolas Hayek allowed Swatch and other brands to get back into a profit-making situation thanks to a products pyramid built around the new brand. The authors rightly attribute this phenomenon to investors’recognition of the superiority of these new business designs. However this interpretation merits refinement: the superiority resides less in the companies’current capacity to identify the first an indications of strategic discontinuity than in their future capacity to develop a portfolio of strategic options and to choose the right one at the right time. The value of a such companies as Amazon and AOL, which benefit from financial polarization, can only be explained in this way. To be competitive in the long-term,a company must not only excel in its “real”market, but also in its financial market. Competition in both is very fierce, and one can not neglect either of these fields of battle without suffering the consequences. This share-market will assume its own importance alongside the commercial market, and in the future, its successful exploitation will be a key to the strategic superiority of publicly-quoted companies.Increasing the value of a company depends on its capacity to predictValue migration from one economic sector to another or from one company to another has unimaginable proportions, in particular because of the new phenomena that mass investment and venture capital represent. The public is looking for companies that will succeed in the future and bet on the winner.Major managers have a talent for recognizing development market trendsThere are some changing and development trends in all business sectors. They can be erected into models, thereby making it possible to acquire a technique for predicting them. This consists of recognizing them in the actual economic context.Predicting is not enough: one still has to act in timeManagers analyze development trends in the environment in order to identify opportunities. They then have to determine a strategic plan for their company, and set up a system aligning the internal and external organizational structure as a function of their objectivesSource: David .J. Morrison, 2001. “Profit Patterns”. Times Business.pp.17-27.译文：利润模式一个公司价值的增长依赖于公司自身的能力的预期，价值的迁移也只是从一个经济部门转移到另外一个经济部门或者是一个公司到另外一个意想不到的公司。
盈余质量分析的评价指标体系外文翻译
原文：Analysis of earnings quality evaluation index system Earnings quality is an important aspect of evaluating an entity's financial health, yet investors, creditors, and other financial statement users often overlook it. Earnings quality refers to the ability of reported earnings to reflect the company's true earnings, as well as the usefulness of reported earnings to predict future earnings. Earnings quality also refers to the stability, persistence, and lack of variability in reported earnings. The evaluation of earnings is often difficult, because companies highlight a variety of earnings figures: revenues, operating earnings, net income, and pro forma earnings. In addition, companies often calculate these figures differently. The income statement alone is not useful in predicting future earnings.The SEC and the investing public are demanding greater assurance about the quality of earnings. Analysts need a more suitable basis for earnings estimates. Credit rating agencies are under increased scrutiny of their ratings by the SEC. Such comfort level and information is not provided in the audit report or the financial statements. Only 27% of finance executives recently surveyed by CFO “feel 'very confident' about the quality and completeness of information available about public companies” [“It's Better (and Worse) Than You Think,” by D. Dupree May 3, 2004].There are a variety of definitions and models for assessing earnings quality. The authors have proposed a uniform, independent definition of quality of earnings that allows for the development of an Earnings Quality Assessment (EQA) model. The proposed EQA model evaluates the degree to which a company's income statement reports its true earnings and the extent to which it can predict and anticipate future earnings.Earnings Quality DefinedA variety of earnings-quality definitions exist. Teats [“Quality of Earnings: An Introduction to the Issues in Accounting Education,” Issues in Accounting Education, 17 (4), 2002] states that “some consider quality of earnings to encompass the underlying economic performance of a firm, as well as the accounting standards that report on that underlying phenomenon; others consider quality of earnings to refer only to how well accounting earnings convey information about the underlying phenomenon.” Pratt defines earnings quality as “the extent to which net income reported on the income statement differs from true earnings” [in F. Hodge, “Investors'Perceptions of Earnings Quality, Auditor Independence, and the Usefulness of Audited Financial Information,” Accounting Horizons 17 (Supplement), 2003]. Penman [“The Quality of Financial Statements: Perspectives from the Recent Stock Market Bubble,” Accounting Horizons 17 (Supplement), 2003] indicates that quality of earnings is based on the quality of forward earnings as well as current reported earnings. Shipper and Vincent [“Earnings Quality,” Accounting Horizons 17 (Supplement), 2003] define earnings quality as “the extent to which reported earnings faithfully represent Hicks Ian income,” which includes “the change in net economic assets other than from transactions with owners.”Using various definitions of earnings quality, researchers and analysts have developed several models. The Sidebar summarizes eight models for measuring earnings quality. The models are used for very narrow, specific purposes. While the criteria used in these definitions and models overlap, none provide a comprehensive view of earnings quality. For example, the primary purpose of the Center for Financial Research and Analysis (CRFA)'s model is to uncover methods of earnings manipulation. Of the eight models discussed, only the Lev-Thiagarajan and Empirical Research Partners models have been empirically tested for evidence of usefulness related to quality of earnings. Lev and Thiagarajan's findings confirm that their fundamental (earnings) quality score correlates to earnings persistence and growth, and that subsequent growth is higher in high quality–scoring groups. Empirical Research Partners' model is based in part on methodology developed and tested by Potosi, whose findings indicate a positive relationship between scores based on the model and future profitability.The following summarizes the criteria considered in each of the eight models for measuring earnings quality.Center for Financial Research and Analysis: Four criteria to uncover methods used to manipulate earnings. Report includes financial summary, accounting policy analysis, discussion of areas of concernEmpirical Research Partners: Three components: net working-capital growth rate, net concurrent assets, deferred taxes; incremental earnings and free cash flow production relative to each new dollar of revenue or book value; and nine financial indicators, put together for a single gauge of fundamentals. Items viewed favorably:positive return on assets and operating cash flow; increases in return on assets, current ratio, gross margin, asset turnover; operating cash flow that exceeds net income.Items viewed unfavorably: increases in long-term debt-to-assets; presence of equity offerings. Each indicator given a 1 if favorable, an O if not; scores aggregated on an O to 9 scales.Ford Equity Research: Earnings variability is minimum standard error of earnings for past eight years, fitted to an exponential curve. Growth persistence considers earnings growth consistency over 10 years; projected earnings growth rate is applied to normal earnings to derive long-term value. Operating earnings calculated by excluding unusual items, such as restructuring charges and asset write-downs; earnings trend analysis done on this adjusted figure. Repurchases of an entity's own shares are analyzed to determine if results are favorable.Lev-Thiagarajan: Each fundamental is assigned a value of 1 for positive signal, O for negative signal. Each of 12 factors is equally weighted to develop aggregate fundamental score. Negative signals include: decrease in gross margins disproportionate to sales; disproportionate (versus industry) decreases in capital expenditures and R&D; increases in S&A expenses disproportionate to sales; and unusual decreases in effective tax rate. Inventory and accounts receivable signals measure percent change in each (individually) minus percent change in sales; inventory increases exceeding cost of sales increases and disproportionate increases in receivables to sales are considered negative. Unusual changes in percent change of provision for doubtful receivables, relative to percent change in gross receivables, are also viewed negatively. Percent change in sales minus percent change in order backlog is considered an indication of future performance.Merrill Lynch (David Hawkins) (see earnings quality: the establishment of a real 360 View, 2002). Higher total capital ratio (pre-tax operating return on total capital) returns a higher quality of earnings equivalent. Liquidity ratio above 1.0 (net income figure how close it is to achieve positive cash) that the higher quality of earnings. Re-investment in productive assets ratio above 1.0 (committed to maintaining the fixed asset investment) that a higher quality of earnings. The ratio ofeffective tax rate for all companies meet or exceed the average level (dependence on low-tax report) that the higher quality of earnings. Model also believes that long-term credit rating and Standard & Poor's S & P earnings and dividend growth and stability of rank-based, over the past 10 years.Raymond James & Partners (Michael Krensavage) (also see the earnings quality monitoring, 2003.) 1 (worst) to 10 (best) rating as a benchmark of 10 exclusive distributions; weighted average rating in the combined to determine the earnings quality scores. Low earnings quality indicators: increase in receivables; earnings growth due to reduced tax rates, interest capitalization, high frequency / time scale of the project. In a recent major acquisition made during the punishment. Practice of conservative pension fund management and improve the R & D budget faster than revenue in return. Cash flow growth and the related net income and gross margin of profit a positive impact on quality improvement.Standard & Poor's core earnings (see also the technical core earnings Bulletin, October 2002). Attempts to give a more accurate performance of the existing business of the real. Core benefits include: Employee stock option expenses; restructuring charges from ongoing operations; offset the depreciation of business assets or deferred pension costs; purchased research and development costs; merger / acquisition costs; and unrealized gains and losses on hedging. Excluded items: Goodwill impairment charges, pension income; litigation or insurance settlements, from the sale of assets (loss) and the provisions of the previous year's expenses and the reversal.UBS (David Bianca) (also see S & P 500 accounting information quality control, 2003.) Comparison of GAAP operating income; the difference between the net one time standard. Employee stock option expenses charged to operating profit. Assuming the market value of return on pension assets to adjust interest rates or the discount rate times. Health care costs adjusted for inflation, if the report is 300 basis points more than the S & P 500 companies are expected weighted average. Joint Oil Data Initiative is AUTHOR_AFFILIATION Bell ovary, CPA, is a Marquette University, Milwaukee, Wisconsin, Don E. Incoming, CPA, graduate students, professors, and Donald E &Beverly Flynn is Chairman of the holder at Marquette University. Michael D • Akers, CPA, CMA, CFE, CIA, CBM, is a Professor and Head of the Department.Of the 51 criteria/measurements used in the eight models, only eight (acquisitions; cash flow from operations/net income; employee stock options; operating earnings; pension fund expenses; R&D spending; share buyback/issuance; and tax-rate percentage) are common to two models, and only two (gross margin and one-time items) overlap in three models.The first step, then, is to develop a standard definition of earnings quality. One of the objectives of Fast’s Conceptual Framework is to assist investors in making investment decisions, which includes predicting future earnings. The Conceptual Framework refers not only to the reliability (or truthfulness) of financial statements, but also to the relevance and predictive ability of information presented in financial statements. The authors' definition of quality of earnings draws from Pratt's and Penman's definitions. The authors define earnings quality as the ability of reported earnings to reflect the company's true earnings and to help predict future earnings. They consider earnings stability, persistence, and lack of variability to be key. As Beaver indicates: “current earnings are useful for predicting future earnings … [and] future earnings are an indicator of future dividend-paying ability” (in M. Bauman, “A Review of Fundamental Analysis Research in Accounting,” Journal of Accounting Literature 15, 1996).Earnings Quality Assessment (EQA)The authors propose an Earnings Quality Assessment (EQA) that provides an independent measure of the quality of a company's reported earnings. The EQA consists of a model that uses 20 criteria that impact earnings quality (see Exhibit 2 ), applied as a “rolling evaluation” of all p eriods presented in the financial statements. The EQA is more comprehensive than the eight models presented, considering revenue and expense items, as well as one-time items, accounting changes, acquisitions, and discontinued operations. The model also assesses the stability, or lack thereof, of a company, which leads to a more complete understanding of its future earnings potential.The criteria were drawn from the eight models discussed, including the 10 criteria overlapping two or more models. The EQA evaluator assigns a point value ranging from 1 to 5 for each of the 20 criteria, with a possible total of 100 points. Ascore of 1 indicates a negative effect on earnings quality, and a score of 5 indicates a very positive effect on earnings quality. EQA scores, then, can range from 20 to 100. Similar to the grading methods for bond ratings, grades are assigned based on the following scale: 85–100 points = A, 69–84 points = AB, 53–68 points = B, 35–51 points = BC and 20–34 points = C. While the EQA evaluator needs to use professional judgment in assigning scores to each of the criteria, the guidelines in Exhibit 2 are recommended.The Application of EQATo illustrate the process of applying the EQA, the authors chose two large pharmaceutical companies, Merck and with. Each of the authors independently applied the EQA to Merck's and Width’s 2003 financial statements, and then met to discuss their results. Based upon each individual assessment and the subsequent discussion, they reached an agreed-upon score, presented in Exhibit 3 .This process is similar to what an engagement team would go through. Each member would complete the EQA independently, and then the group would meet as a whole to discuss the assessment and reach a conclusion. This process allows for varying levels of experience, and takes into account each team member's perspective based on exposure to various areas of the company. The audit team's discussion is also helpful when one member finds an item that another might not have, which may explain variances in the scores assigned by each individual.For the illustration, the EQA was based solely on data provided in the financial statements. The authors found a high level of agreement on the quality of earnings measures, and there was little variation in the scores for both companies. One would expect even less variation when a group more intimately exposed to an organization, such as the audit engagement team, completes the EQA. The consistency provided by use of the EQA model would enhance the comfort level of users of the financial statements and the EQA.Need for Further DevelopmentThere is significant need for the development of a uniform definition and a consistent model to measure earnings quality. This article provides such a definition, positing that the quality of earnings includes the ability of reported earnings to reflect the company's true earnings, as well as the usefulness of reported earnings to predict future earnings. The authors propose an Earnings Quality Assessment (EQA) model that is consistent with this definition. The EQA recognizes many of the fragilities ofGAAP, and takes into account factors that are expected to affect future earnings but that are not explicitly disclosed in the financial statements.The authors propose that auditors conduct the EQA and issue a public report. Auditors' EQA reports will provide higher-quality information to financial statement users and meet the SEC's demand for greater assurance about the reliability of earnings figures.Source: MichaelD.Akers, 2005. “Analysis of earnings quality evaluation index system” the CPA journal. November.pp.199.译文：盈余质量分析的评价指标体系盈余质量是债权人评价一个实体的财务状况的重要方面，但投资者和其他财务报表使用者往往忽略它。
利润质量外文参考文献
利润质量外文参考文献以下是关于利润质量的外文参考文献，中文翻译已标注在括号里：1. Dechow, P. M., & Dichev, I. D. (2002). The quality of accruals and earnings: The role of accrual estimation errors. Accounting review, 77(s-1), 35-59. （Dechow和Dichev，2002年，论文名称：应计调整和净收益的质量：应计调整估计误差的作用。
）2. Kasznik R. (1999). On the association betweenvoluntary disclosure and earnings management. Journal of accounting research, 37(1), 57-81. （Kasznik，1999年，论文名称：自愿披露和盈余管理之间的关联。
）3. Piotroski, J. D., & Wong, T. J. (2005). The evolution of profitability and earnings in recent decades. Journal of accounting research, 43(3), 335-377. （Piotroski和Wong，2005年，论文名称：近几十年来盈利能力和净收益的演变。
）4. Sloan, R. G. (1996). Do stock prices fully reflect information in accruals and cash flows about future earnings?. The accounting review, 71(3), 289-315. （Sloan，1996年，论文名称：股价是否充分反映应计应收和现金流量有关未来收益的信息？）5. Xie, H., Davidson III, W. N., & DaDalt, P. J. (2003). Earnings management and corporate governance: the role of the board and the audit committee. Journal of corporate finance,9(3), 295-316. （Xie、Davidson和DaDalt，2003年，论文名称：盈余管理和企业治理：董事会和审计委员会的作用。
企业利润质量分析中英文对照外文翻译文献
企业利润质量分析中英文对照外文翻译文献摘要本文翻译了一篇关于企业利润质量分析的外文文献，旨在探讨企业利润质量分析在中英两国间的差异和相似之处。
文献中提供了关于企业利润质量分析的定义、方法和实证结果等内容，为读者理解和应用该领域的理论与实践提供了重要参考。
引言企业利润质量分析是一个重要的财务领域研究方向，它关注企业盈利能力的稳定性、可靠性和可持续性。
随着全球经济一体化的深入发展，中英两国的企业利润质量分析研究也日益活跃。
本文选取了多篇与企业利润质量分析相关的英文文献，并对其内容进行了翻译，旨在为读者了解中英两国在该领域的研究进展提供便利。
企业利润质量分析的定义据文献分析，企业利润质量分析是一种通过财务报表、财务指标等量化数据进行的评估企业盈利活动的方法。
它的目的是揭示企业利润数据的真实性、可靠性以及相关风险因素，为投资者、管理者和监管机构提供决策依据。
企业利润质量可由多个维度进行分析，如利润的稳定性、准确性、增长率和来源等。
中英两国在利润质量分析的定义上存在一些差异，在具体指标选取和计算方法上也有一定差异。
企业利润质量分析的方法文献中介绍了多种方法用于企业利润质量分析，包括财务比率分析、财务模型建立和统计分析等。
这些方法通过分析企业的财务数据、经营环境和行业特征等因素，评估企业盈利数据的质量。
中英两国的企业利润质量分析方法较为相似，都包括多种定量分析工具和技术。
然而，在具体的分析模型和指标选取上可能存在差异，这受到了两国财务会计规范和监管要求的影响。
企业利润质量分析的实证结果文献中总结了一些对企业利润质量分析的实证结果。
这些结果揭示了企业利润质量与企业绩效、风险管理以及信息透明度之间的关系。
中英两国的实证结果在某些方面存在一定的差异，这可能是由于两国的经济、财务和法律环境不同所致。
然而，文献也指出了一些共同的趋势，为中英两国企业利润质量分析研究提供了重要参考。
结论通过对企业利润质量分析相关文献的翻译，我们可以了解到中英两国在该领域的研究进展和差异。
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企业盈利质量分析中英文对照外文翻译文献企业盈利质量分析中英文对照外文翻译文献企业盈利质量分析中英文对照外文翻译文献(文档含英文原文和中文翻译)原文：Measuring the quality of earnings1. IntroductionGenerally accepted accounting principles (GAAP) offer some flexibility in preparing the financial statements and give the financial managers some freedom to select among accounting policies and alternatives. Earning management uses the flexibility in financial reporting to alter the financial results of the firm (Ortega and Grant, 2003).In other words, earnings management is manipulating the earning to achieve a企业盈利质量分析中英文对照外文翻译文献predetermined target set by the management. It is a purposeful intervention in the external reporting process with the intent of obtaining some private gain (Schipper, 1989).Levit (1998) defines earning management as a gray area where the accounting is being perverted; where managers are cutting corners; and, where earnings reports reflect the desires of management rather than the underlying financial performance of the company.The popular press lists several instances of companies engaging in earnings management. Sensormatic Electronics, which stamped shipping dates and times on sold merchandise, stoppedits clocks on the last day of a quarter until customer shipments reached its sales goal. Certain business units of Cendant Corporation inflated revenues nearly $500 million just prior to a merger; subsequently, Cendant restated revenues and agreed with the SEC to change revenue recognition practices. AOL restated earnings for $385 million in improperly deferred marketing expenses. In 1994, the Wall Street Journal detailed the many ways in which General Electric smoothed earnings, including the careful timing of capital gains and the use of restructuring charges and reserves, in response to the article, General Electric reportedly received calls from other corporations questioning why such common practices were “front-page” news.Earning management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers (Healy and Whalen, 1999).Magrath and Weld (2002) indicate that abusive earnings management and fraudulent practices begins by engaging in earnings management schemes design ed primarily to “smooth” earnings to meet internally or externally imposed earnings forecasts and analysts’expectations.Even if earnings management does not explicitly violate accounting rules, it is an ethically questionable practice. An organization that manages its earnings sends a企业盈利质量分析中英文对照外文翻译文献message to its employees that bending the truth is an acceptable practice. Executives who partake of this practice risk creating an ethical climate in which other questionable activities may occur. A manager who asks the sales staff to help sales one day forfeits the moral authority to criticize questionable sales tactics another day.Earnings management can also become a very slippery slope, which relatively minor accounting gimmicks becoming more and more aggressive until they create material misstatements in the financial statements (Clikeman, 2003)The Securities and Exchange Commission (SEC) issued three staff accounting bulletins (SAB) to provide guidance on some accounting issues in order to prevent the inappropriate earnings management activities by public companies: SAB No. 99 “Materiality”, SAB No. 100“Restructuring and Impairment Charges” and SAB No. 101 “Revenue Recognition”.Earnings management behavior may affect the quality of accounting earnings, which is defined by Schipper and Vincent (2003) as the extent to which the reported earnings faithfully represent Hichsian economic income, which is the amount that can be consumed (i.e. paid out as dividends) during a period, while leaving the firm equally well off at the beginning and the end of the period. Assessment of earning quality requires sometimes the separations of earnings into cash from operation and accruals, the more the earnings is closed to cash from operation, the higher earnings quality. As Penman (2001) states that the purpose of accounting quality analysis is to distinguish between the “hard” numbers resulting from cash flows and the “soft” numbers resulting from accrual accounting.The quality of earnings can be assessed by focusing on the earning persistence; high quality earnings are more persistent and useful in the process of decision making.Beneish and Vargus (2002) investigate whether insider trading is informative about earnings quality using earning persistence as a measure for the quality of earnings, they find that income-increasing accruals are significantly more persistent for firms with abnormal insider buying and significantly less persistent for firms with abnormal insider selling, relative to firms which there is no abnormal insider trading.Balsam et al. (2003) uses the level of discretionary accruals as a direct measure企业盈利质量分析中英文对照外文翻译文献for earning quality. The discretionary accruals model is based on a regression relationship between the change in total accruals as dependent variable and change in sales and change in the level of property, plant and equipment, change in cash flow from operations and change in firm size (total assets) as independent variables. If the regression coefficients in this model are significant that means that there is earning management in that firm and the earnings quality is low.This research presents an empirical study on using three different approaches of measuring the quality of earnings on different industry. The notion is; if there is a complete consistency among the three measures, a general assessment for the quality of earnings (high or low) can be reachedand, if not, the quality of earnings is questionable and needs different other approaches for measurement and more investigations and analysis.The rest of the paper is divided into following sections: Earnings management incentives, Earnings management techniques, Model development, Sample and statistical results, and Conclusion.2. Earnings management incentives 2.1 Meeting analysts’expectationsIn general, analysts’expectations and company predictions tend to address two high-profile components of financial performance: revenue and earnings from operations.The pressure to meet revenue expectations is particularly intense and may be the primary catalyst in leading managers to engage in earning management practices that result in questionable or fraudulent revenue recognition practices. Magrath and Weld (2002) indicate that improper revenue recognition practices were the cause of one-third of all voluntary or forced restatements of income filed with the SEC from 1977 to 2000.Ironically, it is often the companies themselves that create this pressure to meet the market’s earnings expectations. It is common practice for companies to provide earnings estimates to analysts and investors. Management is often faced with the task of ensuring their targeted estimates are met.企业盈利质量分析中英文对照外文翻译文献Several companies, including Coca-Cola Co., Intel Corp., and Gillette Co., have taken a contrary stance and no longer provide quarterly and annual earnings estimates to analysts. In doing so, these companies claim they have shifted their focus from meeting short-term earnings estimates to achieving their long-term strategies (Mckay and Brown, 2002).2.2 To avoid debt-covenant violations and minimize political costsSome firms have the incentive to avoid violating earnings-based debt covenants. If violated, the lender may be able to raise the interest rate on the debt or demand immediate repayment. Consequently, some firms may use earnings-management techniques to increase earnings to avoid such covenant violations. On the other hand, some other firms have the incentive to lower earnings in order to minimize political costs associated with being seen as too profitable. Forexample, if gasoline prices have been increasing significantly and oil companies are achieving record profit level, then there may be incentive for the government to intervene and enact an excess-profit tax or attempt to introduce price controls.2.3 To smooth earnings toward a long-term sustainable trendFor many years it has been believed that a firm should attempt to reduce the volatility in its earnings stream in order to maximize share price. Because a highly violate earning pattern indicates risk, therefore the stock will lose value compared to others with more stable earnings patterns. Consequently, firms have incentives to manage earnings to help achieve a smooth and growing earnings stream (Ortega and Grant, 2003).2.4 Meeting the bonus plan requirementsHealy (1985) provides the evidence that earnings are managed in the direction that is consistent with maximizing executives’earnings-based bonus. When earnings will be below the minimum level required to earn a bonus, then earning are managed upward so that the minimum is achieved and a bonus is earned. Conversely, when earning will be above the maximum level at which no additional bonus is paid, then earnings are managed downward. The extra earnings that will not generate extra bonus this current period are saved to be used to earn a bonus in a future period.。