Comparative Analysis on the Evaluation Method of Enterprise Profit Quality

Abstract

As an important index to measure the operating result of enterprises, profit is the focus of accounting information users. In recent years, with the emergence of financial fraud cases in the whole world, the authenticity and reliability of accounting profits have been questioned. The users of accounting information shift their focus from the quantity to the quality of accounting profits. How to evaluate the quality of profits comprehensively and reasonably has become the focus of enterprise financial analysis. At present, the academic world has not established a unified evaluation system and method. My study summarizes and evaluates four most commonly used methods for evaluating enterprise profit quality. The study finds that all kinds of methods have their own characteristics. Each method has advantages as well as disadvantages. It is believed that the quality of profit is affected by many factors, and a variety of methods can be used for comprehensive evaluation to ensure the accuracy of the evaluation result.