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Who Cares About Tables? MD&A Disclosure and Firm Performance

Thu, May 12, 3:15 to 5:00pm, Hilton Orlando Lake Buena Vista, Lake Buena Vista (Orlando), Florida, TBA

Abstract

To the best of our knowledge, the textual analysis literature in accounting has largely excluded tables from their investigation. In this study, we examine managers’ use of voluntary tables in the MD&A section of annual reports. First, we find that managers’ use of tables are persistent over time and that most of their information is also mentioned in the MD&A text. Second, we find that performance is positively associated with number of tables. This association stands in contrast to the negative relation between performance and the length of the MD&A text that the literature has found. Further analysis shows that managers uniquely increase both the proportion of tabular information mentioned in the MD&A text and the number of tables when performance is good. We also examine whether the increased tabular information is useful to investors, but we find limited evidence that it is informative. We interpret our results to indicate that managers care more about tabular information than investors.

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