WHAT ARE ANNUAL REPORTS?
A key summary, a “snapshot,”
of a company’s financial worth for small, individual stockholders, security
analysts, researchers and other professionals in the financial community.
ANNUAL REPORTS INCLUDE:
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A balance sheet –
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List
of company assets
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Liabilities,
-
Stockholders
equity
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Profit and loss statement
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Shows
sources of revenue
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Expenses of
doing business
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Resulting
profits (or loss) for the post fiscal year
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In its design, style and
contrast, the document report is a major representation of the company’s
identity.
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Its character,
management and outlook
PURPOSE
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To explain organizations’
business philosophy, long range goals and past year achievements.
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To explain how the organization
plans to continue to achieve their goals.
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To explain how the organization
makes their profit.
HOW TO WRITE AN ANNUAL REPORT
1. Determine objectively
the distinctive character of your company? I.e. if you have a dog
food company,how is it different from other dog
food companies?
2. Determine how those distinctive
traits can be projected credibly.
3. Plan report as n entity. Theme, cover, writing and artwork should
be planned together to make up a
consistant whole
4. Writing should reflect company’s personality. Don’t have text
sound dull or stodgy.
5. Be sure artwork
and copy having the same tone.
6. Be sure graphics and artwork
reflect the character of the company, not the photographs or artist.
7. Follow other rules of good
communication. Capture the interest of readers.
8. Have final report written
by one person, so the whole report has one tone
SEC (SECURITIES AND EXCHANGE
COMMISSION) REQUIREMENTS
The SEC has established some
requirements for the format and content of the annual report.
1. Financial statements
and footnotes should be printed in type at least 10 pts. in size.
2. Differences in accounting
principles from those used in other company documents must be explained
in a footnote.
3. Audited financial statements
for the past two years must be included, as well as a five year summary
of operations and a management analysis of this summary.
4. A brief description
of the business that indicates general scope of operations must be included.
5. Breakdowns of sales
earnings for various product lines and categories of business must be listed
in some form in which they appear in the 10-K report to the SEC.
6. All directors and officers
must be named with their principal business affiliations and the nature
of the organization for which they work.
7. The principle market
for each class of the company’s voting securities must be named, with quarterly
high/low prices for each security for the past two years.
8. Copies of the 10-K report
should be prominently offered to any stockholders.
9. Companies are required
to endure an annual report and proxy reaches each stockholder whose securities
are held by a broker or other firm.
DISTRIBUTION
Annual reports are mailed to
stockholders, employees, associations, and media, government officials
(i.e. Senators) and financial institutions (i.e. banks and trust companies).
THE PRODUCT
Annual reports vary by industry
and size of the corporation.
-
THE
COVER
-
Color
photo
-
Lettering
-
Company
Logo
-
CHIEF EXECUTIVES OFFICER'S
LETTER (2 to 3 pgs)
THEME
-
-
Customer
-
Employees
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Accounting
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“At a glance” section
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Use different paper stock,
finish or matte for financial section.
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Range from 16-48 pages and
cover.
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Should be at least two colors,
four color is often used.
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50 to 60% is devoted to
editorial context and financial statistical tabulations
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The other half consists
of charts, graphics and photographs.
CHECK LIST
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Industry
situation.
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Taxation
and cost of government.
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Legislation
affecting the company.
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Government
regulation.
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Raw materials
and inventories.
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Utilization
of productive capacity.
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Changes
in capitalization – financing and refinancing.
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Trend
in number of stockholders
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Important
events of the year.
-
Discussions
of future prospects.
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International
activities.
Financial Tabulations and
Other Statistics and Reference Materials:
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Comparative consolidated
balance sheet, indicating increase or decline, or percentage change in
each item.
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Profit and Loss Statement.
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Comparative Income Accounts.
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Results and Breakdown by
division or product line.
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In conglomerate companies,
results by segment.
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Tabulation of operating
statistics for ten years or more.
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Tabulations of financial
position and allied statistics.
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Footnotes to Accounts.
-
Independent Auditors’ Report.
-
Study long-term debt, if
any.
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Statistics on number of
stockholders, the distribution of shares geographically by size of holdings,
classes, sexes, etc.
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Employment statistics –
average number per year, total man-hours worked, annual payroll, average
weekly hour’s earnings.
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Management listing: board
of directors, executive committee, finance committee, officers – each identified
with outside connection or title of position with cooperation.
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List of products, subsidiaries,
branch offices, routes, etc.
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Pension costs.
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Explanation of changes in
inventory policy.
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Quarterly data on prices
of stock and inventories.
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Management analysis of the
summary of operations.
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Impact of inflation’s on
company’s assets.
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Number of employees in the
company’s Employee Stock of Ownership Plan.
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