This study investigates whether the aggregate fundamental score (AFS) derived from financial statement analysis has predictive power to stock price crash risk. Prior studies documented that the higher AFS is associated with the higher increase in future earnings. Given that stock price crash essentially comes of a large scale stock disposition due to investor’s prediction on future earnings decreases subsequent to bad news release or actual earnings shock, this study examines that financial statement information on future earnings can previously signal stock price crash. Using AFS measured based on Penman and Zhang (2006), the results show that the level of AFS is negatively related to the future stock price crash risk. Further, the negative relation between those two is pronounced for firms with management earnings forecasts. By showing that AFS based on financial statement analysis incorporates ex-ante information on stock price crash risk, this study academically contributes to literature on the usefulness of accounting information in capital market. Also practically, this study suggests investors could benefit from utilizing financial statement analysis to lessen their economic loss from the impact of stock price crash. 

Keywords: Financial statement analysis, fundamental variable, stock price crash risk, management forecast
JEL code: M41​