Prediction Ability Of Interim Financial Reports: A Research On A Share Market

Interim financial report is an important aspect of stock market's information disclosure system. The disclosure of interim financial report solves the problem of lower information usefulness for making decision due to longer period and later information of annual financial report. In China, the disclosure rule on interim financial report developed from simple to miscellaneous, from blur position to clear position, and in this process basing on insurance of information reliable, increase the relevance of it to provide useful information for decision-makers.This paper studied on Chinese listed companies' disclosed interim financial reports, researched on whether this information can reach the demand on relevancy, especially whether they contain predictive information. This paper based listed companies on Shenzhen stock exchange, used seven kinds of interim financial report's prediction models and three kinds of annual financial report's prediction models to predict the actual annual earnings and then basing on the result researched the factors that influence interim financial report's prediction information.The results show that: comparing with annual financial report, interim financial reports have better prediction information; for operating income, ordinary listed companies have better prediction than ST and PT companies, however, for mid-term EPS, ordinary listed companies do not have obviously better prediction than ST and PT companies; the scale of company influence the prediction of mid-term financial information.