Companies are required by law to keep shareholders
up to date on how the business is doing. Some of that information
is provided in the firm's
annual report, which summarizes the company's operations
for individual investors. A summary of current performance is
also provided in the company's quarterly reports.
The contents
Often quite elaborately designed and illustrated,
the annual report usually begins with a letter from the company's
chairman touching on the year's highlights and offering some
broad prediction for the coming year. The report is available,
along with other details about the company, from brokers, directly
from companies, or increasingly on corporate Web sites. A typical
report includes:
A section outlining the
company's philosophy of doing business
Detailed reports on each
segment of the company's operations
Financial information,
including the profit-and-loss statement for the year
The balance sheet, which
shows the company's assets and liabilities at the end
of the year compared to previous years
While the annual report can tell
you a lot about a company's business and culture,
keep in mind that it's designed to represent
the company in the best possible light.
