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Financial Statement Analysis: Evidence from Chinese Firms

Author

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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)

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.

Suggested Citation

  • Li Li Eng & Xi Tian & T. Robert Yu, 2018. "Financial Statement Analysis: Evidence from Chinese Firms," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 1-32, December.
    • Handle: RePEc:wsi:rpbfmp:v:21:y:2018:i:04:n:s0219091518500273
    DOI: 10.1142/S0219091518500273
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    References listed on IDEAS

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    2. Т. Sheshukova G. & A. Sanacheva A. & Т. Шешукова Г. & А. Саначева А., 2019. "Основы концепции анализа производственно-хозяйственной деятельности учреждений уголовно-исполнительной системы // Conceptual Framework to Analyze the Production and Economic Activity of the Institutio," Учет. Анализ. Аудит // Accounting. Analysis. Auditing, ФГОБУВО "Финансовый университет при Правительстве Российской Федерации" // Financial University under The Government of Russian Federation, vol. 6(2), pages 52-59.
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    4. Yu Ling Tsai & Hua-Wei Huang, 2020. "Does Convergent-IFRS Adoption in China Increase Audit Fees?," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 23(01), pages 1-21, March.

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