Are the stock prices influenced by the publication of the annual financial statements? Evidence from the Dow Jones Industrial Average

The impact of financial statements on the stock prices of listed companies after its publication has been reported and analyzed in several studies. On the basis of financial reporting, the evaluation of a company’s financial performance requires taking into account a plurality of indicators, which are related to profitability, liquidity and managerial performance. In this paper, we investigate whether the publication of the annual financial statements can influence the stock prices of listed companies. Empirical time series data of companies listed on the Dow Jones Industrial Average (DJIA) are used adopting a regression approach. From a different perspective of other papers the regression model proposed considers stock returns measured from the publication of the form 10-k to the disclosure of the quarterly financial statements in May. The obtained results confirm that stock prices are affected by the publication of the financial statements. Finally, the performed analysis also provides some useful guidelines to managers and investors.