A Study on Comparison of Readability Levels of Annual Reports of Banks on the Basis of Profitability

Readability talks about the ease with which a text can be read. The research work is an initiative to test the relationship of readability levels of annual reports of banking sector with their performance figures. If disclosure readability is strategically used by managers to hide adverse information, a relationship between firm performance and readability would be expected. The study covers the annual reports of banking sector in India and compares the readability scores of these reports on the basis of independent variable i.e. profitability. 6 hypotheses are constructed to observe the relationship between the readability of annual reports and profitability levels of banks. The results propose that banks with good or bad financial results do not show their outcome on readability of annual report. Therefore if the disclosures of the Company are more concise and syntactically simple then cannot be taken to indicate that the firm's performance was good.