Annual Report Text Information and Credit Rating Based on the Perspective of Readability
The current credit rating system gives much attention to the quantitative situation of the company's finances, whereas the soft information hidden in the company's annual reports is often ignored. This study reviews the annual reports of A-share listed companies in China from 2...
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| Format: | Article |
| Language: | English |
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IEEE
2025-01-01
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| Series: | IEEE Open Journal of the Computer Society |
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| Online Access: | https://ieeexplore.ieee.org/document/10818970/ |
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| _version_ | 1850051206907428864 |
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| author | Yu Gong Muhan Shi Dongli Han |
| author_facet | Yu Gong Muhan Shi Dongli Han |
| author_sort | Yu Gong |
| collection | DOAJ |
| description | The current credit rating system gives much attention to the quantitative situation of the company's finances, whereas the soft information hidden in the company's annual reports is often ignored. This study reviews the annual reports of A-share listed companies in China from 2007 to 2021 and explores the relationship between the readability of the annual reports and the credit ratings given by rating agencies. We find that the readability of annual reports significantly impacts the company's credit rating. Further heterogeneity testing reveals that this impact significantly varies across different types of companies. Therefore, credit rating agencies should pay due attention to the soft information in the annual report when rating a company to ensure accuracy in their ratings. |
| format | Article |
| id | doaj-art-5d60791fa27a4aa291809336ec96eceb |
| institution | DOAJ |
| issn | 2644-1268 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | IEEE |
| record_format | Article |
| series | IEEE Open Journal of the Computer Society |
| spelling | doaj-art-5d60791fa27a4aa291809336ec96eceb2025-08-20T02:53:13ZengIEEEIEEE Open Journal of the Computer Society2644-12682025-01-01640341210.1109/OJCS.2024.352369910818970Annual Report Text Information and Credit Rating Based on the Perspective of ReadabilityYu Gong0https://orcid.org/0009-0005-5442-7944Muhan Shi1Dongli Han2https://orcid.org/0009-0007-7766-9561School of Finance, Central University of Finance and Economics, Beijing, ChinaChengdu Branch, China Minsheng Banking Corp., Ltd., Chengdu, ChinaSchool of Finance, Central University of Finance and Economics, Beijing, ChinaThe current credit rating system gives much attention to the quantitative situation of the company's finances, whereas the soft information hidden in the company's annual reports is often ignored. This study reviews the annual reports of A-share listed companies in China from 2007 to 2021 and explores the relationship between the readability of the annual reports and the credit ratings given by rating agencies. We find that the readability of annual reports significantly impacts the company's credit rating. Further heterogeneity testing reveals that this impact significantly varies across different types of companies. Therefore, credit rating agencies should pay due attention to the soft information in the annual report when rating a company to ensure accuracy in their ratings.https://ieeexplore.ieee.org/document/10818970/Annual reportreadabilitycredit ratingtext similarity |
| spellingShingle | Yu Gong Muhan Shi Dongli Han Annual Report Text Information and Credit Rating Based on the Perspective of Readability IEEE Open Journal of the Computer Society Annual report readability credit rating text similarity |
| title | Annual Report Text Information and Credit Rating Based on the Perspective of Readability |
| title_full | Annual Report Text Information and Credit Rating Based on the Perspective of Readability |
| title_fullStr | Annual Report Text Information and Credit Rating Based on the Perspective of Readability |
| title_full_unstemmed | Annual Report Text Information and Credit Rating Based on the Perspective of Readability |
| title_short | Annual Report Text Information and Credit Rating Based on the Perspective of Readability |
| title_sort | annual report text information and credit rating based on the perspective of readability |
| topic | Annual report readability credit rating text similarity |
| url | https://ieeexplore.ieee.org/document/10818970/ |
| work_keys_str_mv | AT yugong annualreporttextinformationandcreditratingbasedontheperspectiveofreadability AT muhanshi annualreporttextinformationandcreditratingbasedontheperspectiveofreadability AT donglihan annualreporttextinformationandcreditratingbasedontheperspectiveofreadability |