An annual report is a document that public corporations must provide annually to shareholders that describes their operations and financial conditions. The front part of the report often contains an impressive combination of graphics, photos, and an accompanying narrative, all of which chronicle the company's activities over the past year and may also make forecasts about the future of the company. The back part of the report contains detailed financial and operational information
An annual report will contain the following sections:
- General corporate information
- Operating and financial highlights
- Letter to the shareholders from the CEO
- Auditor's report
- Summary of financial data
- Accounting policies
Explanation:
Annual reports became a regulatory requirement for public companies following the stock market crash of 1929, when lawmakers mandated standardized corporate financial reporting. The intent of the required annual report is to provide public disclosure of a company's operating and financial activities over the past year. The report is typically issued to shareholders and other stakeholders who use it to evaluate the firm's financial performance and to make investment decisions.In a nutshell:
- An annual report is a corporate document disseminated to shareholders that spells out the company's financial condition and operations over the previous year.
- An annual report is a document that public corporations must provide annually to shareholders that describes their operations and financial conditions.
- Registered mutual funds must also distribute a full annual report to its shareholders each year.
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