Financial statement analysis has been used to assess a company's likelihood of financial distress — the probability that it will not be able to repay its debts. Financial statement analysis was used by credit suppliers to assess the credit worthiness of its borrowers. Today, financial...

This paper examines whether property-casualty insurance companies manage earnings to influence investor expectations at the time of equity issuances. Our tests focus on the discretionary component of a material accounting accrual recognized by property-casualty insurance companies, i.e., the...