ScholarWorks@숙명여자대학교

초록

Nowadays, China has becoming the emerging market in the world. Chinese capital market has released several restrictions for foreigners by stages in the process of open-door policy in economy, attracting investors’ attention. Therefore, the research on the usefulness of accounting information, such as net income and cash from operations, in the stock market of China is needed. This paper has taken the empirical test of the relationship between the stock returns and the net income or cash from operations. According to the accounting principles, net income is the aggregate of cash flows and accruals, whereupon both the net income and cash from operations can has the significant usefulness when predicting the future cash flow reflected in the stock price changes. As a results, net income as well as cash from operations are highly utilized in Hong Kong stock market and Shenzhen stock market while the net income is the only useful information in Shanghai stock market. Considering the magnitude of the absolute value of aggregate accruals, the usefulness of cash from operations come in sight. In the group of small absolute value of aggregate accruals, cash from operations has the larger association with stock returns.

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