Voluntary Disclosure of Financial Ratios in India

The study examines the magnitude of voluntary financial ratio disclosure in India and the association of the magnitude of voluntary disclosure of financial ratio with the performance of the company, size and industry classification. The companies selected for the study were CNX100 National Stock Exchange (NSE) companies. Multiple regression and correlation were used to understand the relationship between disclosure index and selected independent variables. The study found the magnitude of voluntary disclosure of financial ratios to be low. The regression and correlation results revealed that the magnitude of financial ratio disclosure was significantly influenced by the size of the company. The study concluded that companies in India must disclose financial ratios, as it would help stakeholders understand and interpret the financial statements better. For better investment decisions, the securities market regulator of India, SEBI needs to take a view on making reporting of selected ratios mandatory. For comparability purposes, SEBI may also standardize the method of calculating financial ratios.