What is an Annual Report?

What is an annual reportAn Annual Report is just what you think it would be, a comprehensive report that details the activities of a certain company over a 12 month period. Most public companies are required by the Securities and Exchange Commission (SEC) to provide these reports once a year.  The Annual Report is carefully created by the senior members of the corporation (CFO, CEO, etc.) to provide detailed information of the health on the organization to shareholders and the general public.

A typical Annual Report will contain all or some of the following:

  • Company Information (location, strategy, history)
  • Description of the Company’s Business From the Previous Year.
  • Balance Sheet
  • Cash Flow Statement
  • Profit and Loss Statement
  • Letter to the Shareholders
  • Forward Looking Statements

In addition to these basic financial statements and reports, some companies use their Annual Report as a Marketing tool.  They will provide details on new products and services, significant acquisitions or recent new hires that the company feels are relevant.  The strategy here is to project stability and long term growth to their shareholder base as well as the general public.

For more detailed info on How to Read an Annual Report