The Quality of earnings is as a financial performance analysis device and the araising need of education

ABSTRACT Investors, founders, funders and public officers take earnings numbers, which are stated in financial statements in to account in assessing financial performance of business. In this point, the basic question encountered is reliability of the information contents of these financial statements. Because, the earnings numbers can be manipulated by using certain accounting applications by the business management. Therefore, the analyze of the quality of earnings, which takes into consiteration the effects of accounting applications on the earnings numbers, must be applied into the assessing of the financial performance. The main aim of this study is to explain the concept of the quality of earnings, its analysis techniques and to make a case study in the accommodation operations. Also the training of the personnel, who is going to analyze the quality of earnings, is taken into the scope of the study The case study to determinate the quality of earnings of accommodation operations was applied to four accommodation operations whose stocks are in the process in IMKB (Istanbul Stock Exchange Commission). The data used in the analyzing were availed from their financial statements. The data reprepared by using USA dollar deflator to purify the effects of the inflation. The Q and C Score's model, t test and regression model were used to analyze data. The results of the analysis, it is found out that Q scores, which is indicator of good quality, of accommodation operations are different from zero. It means that accommodations operations inclined to show their earnings more different than their real value. According to this result we accepted that the quality of earnings of the accommodation operations is low.