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Annual Report Checklist

Annual reports are an integral part of not only the annual shareholder meeting, but also your company's reputation. The annual report helps shareholders make important financial decisions and helps them make informed decisions as to how to vote on corporate matters. Specifically, shareholders view the annual report of a company in terms of measurements, such as earnings per share, intangible and tangible assets and dividend yield.

Shareholders, and the public, will want to review the company's financial statements. They'll be looking for trends in profitability and growth. Is this company growing and moving forward, or is it downsizing? Typically annual reports are issued by publicly traded companies. Privately-held companies don't issues statements for the public to scrutinize, unless absolutely necessary.

Reading an Annual Report

Reading an annual report can be somewhat confusing, but most annual reports typically contain the same basic structure. Expect to find: 

  • Letter from the chairperson of the board;
  • Important information on sales and marketing;
  • Summary of the company's financial results;
  • Financial statements (including balance sheets, income statements, cash flow statements and statements of shareholder equity);
  • Letters from a CPA;
  • List of directors and officers;
  • Stock price history; and
  • Analysis from management.

The annual report must accurately describe the financial condition of the company and its future direction. FindLaw has put together a questionnaire that will help you determine whether your annual report satisfies the interests of analysts and shareholders.

 
 

Yes/No

 

My annual report provides analysis and a sense of my company's direction for the next year, not just a recap of the past year.


 

 
 

My annual report makes financial data immediately available and encapsulates it through charts and graphs.


 

 
 

My annual report's narrative is future-oriented, and describes management philosophy and growth plans.


 

 
 

My annual report is written in a way that appears to tell my company's story to the average shareholder.


 

 
 

My annual report uses descriptive headings and sub-headings to communicate to readers who only skim the report, and to draw them into reading more thoroughly.


 

 
 

My annual report contains a brief but thorough synopsis of my company's markets and lines of business.


 

 
 

My annual report's operations review tells the story quickly and concisely, and describes how divisions fare in their respective markets.


 

 
 

My annual report is attractively packaged, with an engaging cover, pictures, captions, and other elements that catch an average shareholder's attention.

My annual report is written with its role as a marketing tool in mind, and would be useful to a shareholder recommending my company's stock to a friend or relative.


 

 

The more "Yes" answers you gave, the more your annual report satisfies the reported interests of both analysts and shareholders.  The more "No" answers you gave, the more you may wish to explore reformatting your annual report to fulfill its potential value to your company.

Seeking Legal Advice

When dealing with corporate shareholders, you'll want to ensure your annual report is accurate and in compliance with the law. Speak to an knowledgeable business and commercial law attorney today if you have any questions. 

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