Do Numbers Speak Louder Than Words?

37 Pages Posted: 13 Jan 2017 Last revised: 8 Feb 2018

See all articles by Dexin Zhou

Dexin Zhou

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance

Date Written: February 7, 2018

Abstract

I investigate the information in the ratio of numeric and textual content in corporate disclosures. I hypothesize that this ratio contains value-relevant information, since executives are likely to obscure poor performances using textual disclosures. Consistent with this hypothesis, I find that a low proportion of numeric information is associated with poor returns surrounding the earnings conference call. Additionally, a low percentage of numeric information predicts a negative drift in stock returns after the conference call date and a negative earnings surprise next quarter. Finally, this ratio is negatively related to investors' uncertainty and disagreement measured by absolute forecast error, forecast dispersion, and trading volume.

Suggested Citation

Zhou, Dexin, Do Numbers Speak Louder Than Words? (February 7, 2018). Available at SSRN: https://ssrn.com/abstract=2898595 or http://dx.doi.org/10.2139/ssrn.2898595

Dexin Zhou (Contact Author)

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance ( email )

55 Lexington Avenue
New York, NY 10010
United States

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