How To - Read an Annual Report

Most investors should consider the annual report to be the most useful and informative document that shows a comprehensive overview of the company. It is designed to be a critical document that should show the company’s performance, “warts and all”. It is often the most important document used by investors when they are researching a company and its future.

Because it provides details of the financial condition of the company, and offers a clear insight into the future plans of the company, the annual report should be read by every shareholder or investor or other interested parties who may be advising someone to invest in that company.

It is also good to read and see what the CEO has to say in the director’s report, because often it will give you an indication of the philosophy behind the company’s management.

Most investors see the annual report as the most credible source of information available to them about their company and many advisors are clearly of the opinion that mostly everything that they need to learn about a company will come from these documents.

From research conducted, it appears that before investors make financial decisions, ...

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