Suchergebnisse

The basic financial purpose of the firm is maximization of its value. A inventory management should also contribute to realization of this basic aim. Many current assets management models which we can find in the literature relating to financial management were constructed with the assumption of book profit maximization as basic aim. These models could lacking what relates to another aim, i.e., maximization of enterprise value. This article presents the value based inventory management model modification.

This study explores the relationship between Earnings Management and Impression Management in the context of some European listed companies. The analysis focuses on the readability of annual reports, measured by the file size. Earnings management is assessed using the modified Jones model. The sample consists of 2,953 listed companies from 17 industries of 24 European countries between 2012 and 2018 resulting in 13,020 firm-year observations. It has been found that one standard deviation increase in financial reports file size increases discretionary accruals in around 4%. These results are robust across different sample specifications in terms of firms' size, industry and country. The findings show that increased intensity in the use of discretionary accruals is obfuscated by the disclosure of less readable annual reports, implying that Earnings Management and Impression Management are used complementarily. The conclusions have impact both for investment management and for policy, preventing inefficient allocation of capital budgeting and providing additional information that improves regulation on financial reporting transparency.
AcknowledgmentThe authors are grateful to financial support from FCT – Fundação para a Ciência e Tecnologia (Portugal), national funding through research grant (UID/SOC/04521/2020).