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Financial Accounting For Dummies by Maire Loughran

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Chapter 16

Studying the Report to the Shareholders

In This Chapter

arrow Staying private or going public: Why annual reports differ among companies

arrow Identifying the three purposes of a corporate annual report

arrow Recognizing common sections in an annual report

arrow Analyzing the Form 10-K

Much of this book is devoted to explaining how financial statements (the income statement, balance sheet, and statement of cash flows) are prepared. But what happens to them after they’re done? Do they just get filed away in case anyone asks to see them?

Absolutely not! The financial statements become the heart of a company’s annual report to its shareholders. An annual report is a document that the company can share with its current owners, potential investors, creditors, the media . . . it can be an important public relations tool that shows the outside world how the company is doing. For many companies, the report is also a regulatory requirement.

In this chapter, I explain the ins and outs of a corporate annual report, including the three key purposes it serves. I also discuss the Form 10-K, an annual filing ...

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