The annual report of a business is a detailed account of the year’s performance, achievements, declines and overall performance of an organization. The annual report reflects how well a company is doing and the general trend of its activities over the years. In short, reviewing a company’s annual report is a great way to know how well it’s doing in the market, whether its returns have increased, decreased or stayed the same as before, backed by sales related figures for analysis.
For example, you can find out how much profit the company is making compared to its expenditure by reviewing the balance sheet on the annual report that clearly projects the trend of the company’s assets and returns. Aside from assessing the overall success of the company with concrete facts and figures, the annual report also depicts where the company is headed and this information is particularly useful for investors and stock holders.
Let’s take a closer look at some of the whys of the annual corporate report.
- Apart from the compliance-based figures of the company, the annual report displays an account of the company’s yearly actions and their influence in the company’s profit and operations. Therefore, this report establishes trust and creates a sense of trust and transparency between the company, the employees and the people who support the business such as stakeholders and consumers.
- The annual report is an additional way for the company to reach out to people. Nowadays, people seem to want to know more about everything with the ease of access to information due to the internet. The annual report depicts the who, why and how of the company’s routine operations to people and makes for an additional way to connect with people aside from regular business interactions. It can establish an image for your company for general masses.
- The annual reports can be seen as excellent promotional strategy for your business. The business incorporation’s day to day affairs can be cumulated and transformed into an effective and on-point marketing strategy. You can potentially showcase historic milestones that the company might have achieved or other positives such as testimonials from the employees or customers to increase motivation of your workforce and set a projectile for future growth. Companies can use annual reports to make a name for themselves. Additionally, companies can highlight their marketing content such as their sophistication in operations and the important role that they play in people’s lives. This form of brand awareness opportunity shouldn’t be let gone.
Financial Content of the Annual Report:
This part of the annual report is the crux of it all. In the business world, your company’s financial output is always going to matter and the annual report plays an instrumental role in conveying this information to those it may concern. The report includes:
- Balance sheet: This sheet displays the financial assets, liabilities, along with other financial details
- Profit and Loss: This includes the income, revenue, outgoings, expenses and profits of the business.
- Shares and stock issued: This section shows the private or public quantity of stocks along with their values.
- Financial projections: This serves as the financial forecast for the company, to get estimated revenue for some point in future.