How To Communicate An Annual Stock Report
How To Communicate An Annual
Stock Report
© 2015 albert-learning.com
How To Communicate An Annual Stock Report
What Is The Annual Report?
The annual report is a document prepared by a company’s management to the
shareholders explaining what happened in the business for the year. There are no real
rules for what an annual report contains. Some companies don’t even prepare one.
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How To Communicate An Annual Stock Report
Vocabulary
Balance sheet: A statement of the assets, liabilities, and capital of a business or other
orgnization at a particular point in time, detailing the balance of income and expenditure
over the preceding period.
Annual report: An annual report is a comprehensive report on a company's activities
throughout the preceding year.
Footnotes: An additional piece of information printed at the bottom of a page.
Financial statements: Usually financial statements refer to the balance sheet,
income statement, statement of cash flows, statement of retained earnings,
and statement of stockholders' equity.
Subsidiaries: A company controlled by a holding company.
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How To Communicate An Annual Stock Report
Content of an Annual Report
-Financial Highlights
-Letter to the Shareholders
-Narrative Text, Graphics and Photos
-Management's Discussion and Analysis
-Financial Statements
-Notes to Financial Statements
-Auditor's Report
-Summary Financial Data
-Corporate Information
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How To Communicate An Annual Stock Report
The final format of the annual report depends on the needs of a company, its
industry, and any legal disclosure requirements. Regardless, an annual report
contains a selection of the following nine parts:
Letter from the chairman: The letter from the chairman of the board is the traditional
place for a company's top management team to tell you what a great job it did during the
preceding year and to lay out the company's goals and strategies for the future
Sales and marketing: This section contains complete information about a company's
products and services, as well as descriptions of its major divisions and groups and
what they do.
Ten-year summary of financial results: Assuming that a company is at least ten years
old, many annual reports contain a presentation of financial results over that period of
time.
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How To Communicate An Annual Stock Report
Management discussion and analysis: This is the place where a company's
management has the opportunity to present a candid discussion of significant financial
trends within the company over the past couple years.
Letter of CPA opinion: To be considered reliable, a company's financial statements
have to be reviewed and audited for accuracy by a qualified Certified Public Accountant
(CPA). In this letter, a CPA firm states any qualifications that it has with the financial
statements.
Financial statements: Financial statements are the bread and butter of the annual
report. This is where a company presents its financial performance data for all to see. At
minimum, expect to see an income statement, a balance sheet, and
a cash flow statement. Be sure to watch for footnotes to the financial statements and
read them carefully.
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How To Communicate An Annual Stock Report
Subsidiaries, brands, and addresses: Here you find listings of company locations —
domestic and foreign — and contact information, as well as brand names and product
lines.
List of directors and officers: Corporations typically have boards of directors — senior
businesspeople from both inside and outside the organization — to help guide them and
provide a broader view of markets and business environments than that seen by internal
managers.
Stock price history: This section gives a brief history of stock prices and dividends,
showing upward and downward trends over time.
© 2015 albert-learning.com
How To Communicate An Annual Stock Report
Conversation
1) What did you understand in this topic?
2) What is an annual report according to you?
3) Is annual report important? Why?
© 2015 albert-learning.com
How To Communicate An Annual Stock Report
Thank you
© 2015 albert-learning.com