
doi: 10.2139/ssrn.2238535
The Securities and Exchange Commission of the United States, in Dec 2012, had announced that a data-driven analytical model will be used to check the earnings quality of companies listed in the USA. The model employed is a mutant of the Modified Jones Model. There are a trove of researches on using Modified Jones Model to gauge the quality of earnings reported by the listed companies (Dechow, Sloan, Sweeney, 1995) (Jones, 1991) (Rusdi, Muhammad, Amirus, 2006) (Zaheer, Amanullah, Muhammad, 2006) (Cheng, Liu, Wayne, 2011).However, model to measure the quality of growth of listed companies is limited. This research purpose is using a data-driven analytical model to check the quality of growth of the listed companies in the Hong Kong stock market.Basically, the research finds that growth quality is affected by sales growth(plus), operating profit margin(minus), short term debt(minus) and current assets(plus) in the ex-ante way, and sales growth(minus), operating profit margin(minus), short term debt(plus) and current assets(minus) in the ex-post way in four separate analyses.
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