Annual report

Definition

An annual report is a comprehensive document produced by a publicly traded company to provide shareholders and other interested parties with detailed information about its financial performance over the past year. It typically includes financial statements, management's discussion and analysis, and key operating metrics.

5 Must Know Facts For Your Next Test

1. Annual reports are mandated by regulatory authorities like the SEC in the United States.
2. They include essential financial statements such as the income statement, balance sheet, and cash flow statement.
3. Management's discussion and analysis (MD&A) section provides insights into the company’s performance and future outlook.
4. Auditors' reports included in annual reports offer an opinion on whether the financial statements present a true and fair view.
5. Annual reports often contain qualitative information such as corporate governance practices and social responsibility initiatives.

Review Questions

• What key sections are typically found in an annual report?
• Why is the auditor's report important in an annual report?
• How does the MD&A section of an annual report help investors?

Related terms

Financial Statements: Documents that provide an overview of a company's financial condition, including income statement, balance sheet, and cash flow statement.

Corporate Governance: The system of rules, practices, and processes by which a company is directed and controlled.

SEC (Securities and Exchange Commission): A U.S. federal agency responsible for enforcing laws against market manipulation.