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Company Performance Annual Report

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Why is it important to know how your

company performes?

Companies need to know how they areperforming in order to analyse problems, findsolutions and make plans for the future.

Management accounts provide data aboutoperational efficiency

Financial accounts show how net lending orborrowing is achieved by financial transactions.

It also records transactions in external assetsand liabilites. Financial account consists of directinvestment, portfolio investment and reserveassets.

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Financial accounts also give informationabout revenuethe company receives.

Revenue is the entire amount of incomebefore any deductions are made. It is theamount of money ( both cash and noncash) that a company actually receivesfrom its activities, mostly from sales ofproducts or services to customers.

With this information a company can thencalculate how much money it has made

(profits) or how much it has lost (losses)during a specific period.

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The companies whose shares are sold on

the stock exchange are called:

Listed companies

These companies have to presenttheir accounts to the public in an annual

report. The annual report is the formalfinancial statement issued yearly by acorporation. It shows asstes, liabilities,revenues, expenses and earnings how thecompany stood at the close of thebusiness year.

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The annual report also:

Discusses the companys financial affairs and

performes a useful function in a free market

system because it transmits information from the

company to its shareholders and investingpublic.

Although the report is addressed to

shareholders, other people who have a stake in

the business (employees, suppliers, customersand lenders) will also find it informative.

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A typical annual report consists of:

Auditors report Report of management

Financial statements and notes

Management discussion

Selected financial data

Board of directors and management

Stockholder information

Corporate Message

Letter to stockholders

Financial highlights

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A typical annual report consists of:

Auditors report: This summary written byindependent public accountants shows whether

the financial statements are complete, reliable,

and prepared according to generally accepted

accounting principles (GAAP).

Report of management: This letter, usually

from the board chairperson, takes responsabilityfor the validity of the financial information in the

annual report.

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Management discussion: This information

summarizes a companysfinancial condition andperformance over five years or longer, including

gross profit and net earnings (net income).

Selected financial data: This series of short,

detailed reports discusses and analyses the

companys performance. It covers results of

operations, and the adequacy of resources tofund operations.

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A typical annual report consists of:

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A typical annual report consists of:

Board of directors and management: This list

gives the names and position titles of the

companys board of directors and top

management team.

Stockholder information: This information

covers the basics-the companys headquarters,

the exchanges on which the company trades its

stock, the next annual stockholders meeting,and other general stockholder service

information.

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A typical annual report consists of:

Corporate message: This may be from the

chairperson of the board of directors, the chief

executive officer, or both. It can provide an

analysis and a review of the years events,including any problems, issues, and the

successes the company had. It usually reflects

the busienss philosophy and management styles

of companys executives, and it often lays outthe companysdirection for the next year.

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A typical annual report consists of:

Letter to stockholders: Some consider this an

advertisement for the company. 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 the

stockholders, using photographs, illustrations,

and text. It may cover the companys lines of

business, markets, mission, managementphilosophy, corporate culture and strategic

direction.

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A typical annual report consists of:

Financial highlights: Problably the most

often-read section of any annual report,

these give a quick summary of a

companys performance. The figuresappear in a short table, usually

accompanied by supporting graphs.

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