• Is the company making money?
• How financially healthy is the company?
• Do the people running the company seem to know what
they are doing?
• How does the company view it’s employees and the
community in which it resides?
• Who are the directors?
Secrets of the Annual Report
Tips for Reading an Annual Report
Some things to consider about the report in general...
• Is the report well written, clear, concise and succinct?
• Are photos modeled or live? How well do they relate to the text of the report?
• How much discussion is there of competition? How clear are product plans?
• Could the report be made more interesting, understandable or eyeappealing?
• How does it compare with others in same industry?
Be careful, not all Annual Reports are what they appear
http://www.zpub.com/sf/arl/arl-read.html
SEC-required elements include:
• Report of management
• Auditor's report
• Management discussion
• Financial statements and notes
• Selected financial data
Optional elements include:
• Financial highlights
• Letter to stockholders
• Corporate message
• Report of management
• Board of directors and management
• Stockholder information
Financial highlights.
Probably the most often-read section of any annual report,
these highlights give a quick summary of a company's
performance. The numbers appear in a short table, usually
accompanied by supporting graphs.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Tips:
Sales and Marketing
Should cover what the company sells, how, where and when.
Is it clear where the company makes most of its money
presently? Is it understandable? Is the scope of lines,
divisions and operations clear?
http://www.zpub.com/sf/arl/arl-read.html
Letter to stockholders.
This letter may be from the chairperson of the board of
directors, the chief executive officer, or both. It can provide
an analysis and a play-by-play review of the year's events,
including any problems, issues, and successes the company
had. It usually reflects the business philosophy and
management style of the company's executives, and often it
lays out the company's direction for the next year.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Corporate message.
Some analysts, business executives, and stockholders
consider this message an advertisement for the company;
others find it useful. However, it almost always reflects how
a company sees itself, or how it would like others to see it.
Here, the company can explain itself to stockholders, using
photographs, illustrations, and text. This message may cover
the company's lines of business, markets, mission,
management philosophy, corporate culture, and strategic
direction.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Board of directors and management.
This list gives the names and position titles of the company's
board of directors and top management team. Sometimes
companies include photographs.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Stockholder information.
This information covers the basics the company's corporate
office headquarters, the exchanges on which the company
trades its stock, the location and time of the next annual
stockholder's meeting, and other general stockholder service
information. Stockholder information is usually in the back
of the annual report.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Auditors' report.
This summary of the findings of an independent firm of certified public
accountants shows whether the financial statements are complete,
reasonable, and prepared consistent with generally accepted accounting
principles (GAAP) at a set time.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Report of management.
This letter, usually from the board chairperson and the chief financial
officer, takes responsibility for the validity of the financial information in
the annual report, and states that the report complies with SEC and
other legal requirements. The discussion attests to the presence of
internal accounting control systems that cover effectiveness of
operations, reliability of financial reporting, and compliance with federal
laws.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Tips:
Chairman of the Board Letter
Should cover changing conditions, goals to achieve or achieved or missed,
actions taken or not to be taken. Is it well written? Reading between the lines
- what is being apologized for?
http://www.zpub.com/sf/arl/arl-read.html
Management discussion.
This series of short, detailed reports discusses and analyzes the
company's performance. It covers results of operations, and the
adequacy of liquid and capital resources to fund operations.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Financial statements and notes.
These statements provide the raw numbers for the company's financial
performance and recent financial history. The SEC requires three
statements — statement of earnings, statement of financial position, and
statement of cash flows — all covered in this Guide. (The statement of
stockholders' equity is not addressed here.) These statements include a
comprehensive set of related notes that provide explanations, additional
detail, and supplementary financial information.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Selected financial data.
This information summarizes a company's financial condition and
performance over five years or longer. Data for making comparisons
over time may include revenue (sales), gross profit, net earnings (net
income), earnings per share, dividends per share, financial ratios such as
return on equity, number of shares outstanding, and the market price
per share.
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml
Interpreting the numbers
Analysts usually begin evaluating a company by studying its
financial statements. These sources present recent financial history in a
concise format, making it easy to see short-term changes in key numbers.
Financial statements are also fairly standard within an industry, making it
easy to compare the performance of a company to that of its competitors.
Analysts interpret the numbers on each financial statement using a variety
of ratios and other comparative measures. Analysis covers:
Statement of earnings
Statement of financial position
Statement of cash flows
Analysis: statement of earnings
Analysts use the statement of earnings to examine a
company's profitability. For example, analysts look at trends
in revenue , operating income , and gross profit rates (or
margins). Other measures include calculation of return on
assets and return on equity . To view IBM's performance over
recent years, see the Historical Charts.
Analysis: statement of financial position
Analysts use the statement of financial position to examine a company's
liquidity and to gain insight into the state of the company's debt and
inventory . One measure analysts use is the current ratio, a comparison of
current assets with current liabilities . Analysts also look at the relationship
of this statement with the statement of earnings. For example, they may
explore the relationships of accounts receivable with sales, and of inventory
with the costs of sales. Collection of accounts receivable is a task financial
analysts also watch closely. If customers take long to pay for goods and
services, accounts receivable may become large, forcing the company to
borrow money (and pay interest) to finance these receivables. The longer it
takes to collect accounts receivable the less valuable they are.
Analysis: statement of cash flows
Analysts use the statement of cash flows to determine how
effectively a company generates and manages cash . Analysts
look most closely at the cash from operating activities in
evaluating a company's potential for long-term success because
this figure shows how efficiently the company can produce and
sell its primary product or service.
Analysts also evaluate cash flows in relation to earnings figures (from the
statement of earnings). For example, in some cases, a company can report
positive earnings on the statement of earnings and still report a negative net
cash flow on the statement of cash flows. This situation may occur when a
company is unable to meet the current demand for its products and
consequently invests its profits, or even borrows additional money, to expand
its manufacturing capability (for example, by purchasing equipment or new
facilities). When such a situation occurs, analysts look for the implications.
They try to determine if the prospective demand for the company's product
is great enough to justify the expenditures and new debt .
Calculate a Company’s Health
With an annual report and a calculator you can make sense of a company’s vital signs.
You’ll find all of the information in the annual report’s profit and loss statement and
balance sheet. Just pick out the numbers, use the formula and calculate.
1. Stock Turnover Days: The faster a company can turn over its stock, the faster it earns.
Compare this year’s stock turnover with last years and learn if the rate of sales is
increasing:
STOCK TURNOVER DAYS=(INVENTORY/COST OF SALES)X 365
2. Debt Turnover Days: If collections are lagging, the company could be heading for trouble.
Compare this years debt turnover with last years and learn if customers are paying.
DEBT TURNOVER DAYS =ACCOUNTS RECEIVABLE / SALES
http://www.reportgallery.com/
Business Summary
Coca-Cola Bottling Co. is engaged in the production, marketing, and
distribution of carbonated and non-carbonated beverages, primarily
products of The Coca-Cola Company. The Company produces and
markets carbonated soft drink products of The Coca-Cola Company,
including Coca-Cola classic, caffeine free Coca-Cola classic, diet
Coke, caffeine free diet Coke, Cherry Coke, diet Cherry Coke, TAB,
Sprite, diet Sprite, Surge, Citra, Mello Yello, diet Mello Yello, Mr. PiBB,
Barq's Root Beer, diet Barq's Root Beer, Fresca, Minute Maid orange,
diet Minute Maid orange sodas, and Dasani bottled water. The
Company also distributes and markets POWERaDE, Cool from Nestea,
Fruitopia and Minute Maid Juices To Go in certain markets. The
Company also produces and markets Dr. Pepper in most of its regions,
as well as various other products, including Seagrams' products and
Sundrop.More from Market Guide: Expanded Business Description
Financial Summary
Coca-Cola Bottling produces and markets carbonated and noncarbonated
soft drink products of the Coca-Cola Company. For the 13 weeks ended
4/1/01, revenues increased 1% to $230.1 million. Net loss fell 9% to $1.8
million. Revenues reflect an increase in net selling prices and increased sales
volume for Dasani bottled water. Loss also benefited from lower
depreciation costs due to a reduced level of capital spending and lower
interest expense due to lower rates.
More from Market Guide: Significant Developments
Dear Fellow Share Owners,
The Coca-Cola Company emerged from the year 2000 reinvigorated
and refocused, with solid business results and a strategy that will
guide us into our next growth phase.
Optimism, pride and fun have been restored in the system. New
leadership is in place. New goals have been established. And
throughout the world, your management team is working hard to make
2001 a great year for The Coca-Cola Company.
Our organization has been redesigned from the ground up, returning
to the leaner, decentralized management structure that built Coca-Cola
into the world's greatest brand and made us the world's premier
relationship company. Local leaders are back where they belong — in
charge of local business. Our cost structure is under control. Getting it
that way demanded difficult decisions — including workforce
reductions — but we now are a healthier, stronger organization.
“Our promise is simple, solid and
timeless: The Coca-Cola Company
exists to benefit and refresh everyone
who is touched by our business.”
Select topics:
What are key issues in nutrition and industry?
What are the key industries?
What is the competition?
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How do you expect the stock has performed?