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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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