Tuesday 11 April 2017

Reading the content of the Annual Report

The content of the Annual Report and Accounts is governed by the law and accounting standards, though directors do still have some discretion.

Listed companies are required to use international accounting standards.

If you are looking at the Report and Accounts of a listed company you will see the following:
  • Independent Auditor's Report
  • Balance Sheet (it might be called Statement of Financial Position)
  • Statement of Comprehensive Income or it might be called Income Statement (this corresponds with the Profit and Loss Account)
  • Statement of Changes in Equity
  • Statement of Cash Flows
  • Notes to the financial statements
  • Chairman's Statement
  • Directors' Report
  • Business Review
  • Directors' Remuneration Report
There is so much detail that there is really no substitute for diving in and having a look at the Report and Accounts of your chosen company.

Try not to get bogged down.  Best of luck.



Additional Notes:

Can you locate the following in the Report and Accounts of the company you are interested?
  • the pre-tax profit (Profit and Loss Account)
  • details of the fixed assets (Balance Sheet and supporting notes)
  • the amount of any exports (the notes)
  • is it an unqualified audit report? (the Audit Report)
  • details of any political or charitable donation (the Directors' Report)
  • was there a cash outflow in the period? (the Cash Flow Statement)
  • details of the share capital (Balance Sheet and supporting notes)
  • the amount of the capital employed (the Balance Sheet).

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