Performance and readability: A comparison of annual reports

The relationship between performance and the readability of annual reports is tested. Readability is defined as the sum total of all those elements within a given piece of printed material that affect the success a group of readers have with it. Style analysis of 60 annual reports using a computer style analyzer, RightWriter, revealed that the annual reports of profitable corporations were easier to read than those of poor performers. RightWriter analyzed the Letter to the Stockholders sections of the annual reports using a variety of indices that indicated the readability, strength, descriptiveness, and jargon levels of the documents. Good performers used strong writing in their annual reports unlike poor performers, but did not use significantly more jargon or modifiers.