Abstract: Financial Reporting among Unregulated Industrial Companies in 1920

Jeffrey J. Archambault and Marie E. Archambault


This study uses the 1920 <i>Moody's Analysis of Industrial Investments</i> to assess the extent of financial reporting by industrial companies. The reporting of an income statement and a balance sheet as well as the amount of disclosure on both of these statements is examined. Characteristics of companies that report an income statement or a balance sheet are identified using least-squares regression. Results for reporting an income statement and a balance sheet show a positive association with being incorporated in Delaware or New Jersey, trading securities on an exchange, having subsidiaries and international operations, and issuing equity in the past three years. Reporting an income statement was also positively associated with having rated common stock and issuing debt in the past three years. Income statement reporting was negatively associated with having a large number of officers on the Board of Directors. Balance sheet reporting was less likely for companies with rated debt.