Accounting Information, Stock Prices and Capital Market Efficiency - From the Automobile Industry of Chinese Listed Companies Empirical Data

Abstract

Stock prices are affected by many factors. Analyzing the correlation of accounting information and stock price is not only beneficial to enterprises and investors making related decisions, but also play an significant role to verify the effectiveness of capital market and to explore its operation rules. In this thesis, based on the relevant theory we selected 2009 annual reports of 40 listed companies in the automotive industry as a research sample and constructed an empirical model and used statistical software Eviews to do an empirical analysis. It shows that stock price is significantly associated with earnings per share and liquidity ratio, and has a weak correlation with asset-liability ratio, growth rate of total assets and net profit growth rate. That is to say the investors think a lot of the enterprise profitability, pay close attention to corporate solvency and enterprise growth ability, but take no count of investment. However, accounting information can reflect 70.6% of stock prices. China's capital market is basically in a semi-strong status.