Firm Performance and Readability of the Annual Report

Risa Wahyuni EDT, Rahmat Febrianto, Annisaa Rahman

Abstract


This research aims to examine and prove empirically the association of the firm performance and the readability of annual reports, especially in the directors' report section. The population in this study are companies listed on the Indonesia Stock Exchange from 2013 to 2017. Through the process of selecting samples using certain criteria, this yields a sample of 1222 firm-years. The results of the study show that the director’s reports with higher firm performance from sales or return on sales (ROS) are more readable. Conversely, firms with director’s reports that are harder to read have lower ROS.

Keywords


firm performance, return on asset (ROA), return on equity (ROE), return on sales (ROS), Fog index and readability of the annual report

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DOI: http://dx.doi.org/10.52155/ijpsat.v12.1.649

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