Financial Statement Analysis: Evidence from Chinese Firms

Li Li Eng (), Xi Tian and T. Robert Yu ()
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Li Li Eng: Department of Business & Information Technology, Missouri University of Science and Technology, Rolla, MO 65409, USA
Xi Tian: College of Economics and Management, Nanjing Agricultural University, 210095 Nanjing, Jiangsu, P. R. China
T. Robert Yu: Department of Accounting, University of Wisconsin Whitewater, Whitewater, WI, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2018, vol. 21, issue 04, 1-32

Abstract: This paper conducts a fundamental analysis of Chinese firms based on accounting numbers in their financial statements. The sample consists of 2,164 Chinese firms listed on Shanghai and Shenzhen Stock Exchanges during the period 2001 to 2013. We use nine fundamental signals and specify a benchmark model and an augmented model. We regress future excess returns on the signals and find that they are associated with excess returns; five of the signals are negatively associated with excess returns, while the other four are positively associated with excess returns. Further analysis suggests that our finding is mainly driven by state-owned firms.

Keywords: China; financial statement analysis; future returns; state-owned enterprise; balance sheet; income statement (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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DOI: 10.1142/S0219091518500273

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