Larger financial reports gives investors less understanding

The size of a company’s financial reports is a better indicator of market volatility than the reports’ content.

Professor Tim Loughran and Professor Bill McDonald from the University of Notre Dame looked at over 66,000 financial reports filed in the US since 1994 and compared the file size of the reports with statistics measuring market volatility.

The researchers found investors have a better understanding of how well a company is placed when financial reports are smaller.

The research comes as financial reports for UK-listed companies have increased to an average of almost 110 pages in 2013, up from 65 in 2003.

Read more at University of Notre Dame