Investigating the Relative Value Relevance of Interim and Annual Accounting Numbers: Empirical Evidence from the Palestine Exchange رسالة ماجستير

Abstract

This thesis aims to evaluate the relative value relevance of the annual financial statements compared to the interim financial statements of the companies listed on the Palestine Exchange from 2014 to 2023. The study population consists of 20 companies (industrial and service) listed on the Palestine Exchange. The study sample was represented by 13 companies that meet the required terms and conditions. What's more, panel data was analyzed where the method of fixed effects for annual data and random effects for interim data was adopted based on the Hausman Test. Thus, the study achieved a set of significant findings. These finding are explained as follows: annual earnings per share (EPS) affect stock returns, whereas interim earnings per share have no impact. Moreover, annual and interim cash flows per share (OCFPS) do not have impact on stock returns. In contrast, accruals per share (ACCPS) shows a weak impact on stock returns for annual statements. The findings also didn't show any significant impact on stock returns for interim statements. Consequently, the study recommends to pay more attention to both annual and interim financial statements when making investment decisions, enhancing the quality of interim financial statements of companies listed on the Palestine Exchange, and providing more detailed financial analysis on both annual and interim statements to help investors evaluate stocks more accurately. Researchers are also invited to test other financial indicators that can contribute to interpreting returns