The Usefulness of Interim Financial Reports: Evidence from Palestine Exchange رسالة ماجستير

Abstract

This thesis arises to inspect the usefulness of interim financial reports of the listed corporations on the Palestine Exchange (PEX). It examines the impact of interim earnings per share, operating cash flows per share and income components per share on the stock returns. Moreover, it examines the impact of firm’s size and industry type on the relationship between interim accounting variables (earnings per share, operating cash flow per share, and accruals per share) and stock returns. Hence, this study uses interim financial reports of the industrial and service listed corporations from 2018-2022. Descriptive statistics, correlation analysis, simple linear regression and multiple linear regressions are utilized as statistical tests to test the hypotheses. The findings of this study state that there is an insignificant impact of the interim earnings per share, operating cash flow per share and income components per share on the stock returns. There is no influence of (firm size and industry type) on the usefulness of the interim earnings per share, operating cash flow per share and income components per share. Also, there is a positive significant impact of accruals on stock returns. Finally, this study recommends that stakeholders consider the interim financial statements as a tool for their decisions. For this point, it is advised the listed companies enhance the quality of interim reporting. Also, the Palestine Exchange should provide a financial analysis of these interim reports to maximize its role in

pricing stocks.