Studying the Report to the Shareholders
In This Chapter
Staying private or going public: Why annual reports differ among companies
Identifying the three purposes of a corporate annual report
Recognizing common sections in an annual report
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 ...