The Predictive Power of Interim Financial Reports for The Future Performance: An Empirical Evidence from Palestine

Purpose – This study investigates the predictive and reliability power of interim financial reports ‎‎(IFRs), whether quarterly or semi-annual, in forecasting future performance. It focuses on the ‎relevance of interim financial ratios and their effect on stock returns, given that users often ‎emphasize annual reports and general assembly meetings typically prioritize annual results over ‎interim disclosures.‎ Design/methodology/approach – A descriptive-analytical approach was employed, utilizing a ‎sample of 20 Palestinian industrial and service firms listed on the Palestine Exchange (PEX). A ‎multiple regression model was used to examine the relationship between stock return (R) and ‎four key independent variables: earnings per share (EPS), sales per share (SPS), firm size (FS), ‎and operating cash flow per share (OCFPS).‎ Findings – The results indicate that: (1) there is no statistically significant relationship at the 5% ‎level between stock return and either EPS or SPS; (2) a statistically significant relationship exists ‎at the 10% level between stock return and OCFPS; and (3) firm size shows a statistically ‎significant relationship with stock return at the 5% level.‎ Practical implications – The findings highlight the relevance of IFRs to regulators, ‎policymakers, and corporate managers, underscoring their role in enabling timely decision-making.‎ Originality/value – To the best of the author's knowledge, this is the first empirical investigation ‎of the influence of interim financial reports on stock returns within the Palestinian market. It fills ‎a research gap and underscores the need to re-evaluate the role of IFRs in investment and ‎corporate decision-making‎.