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What is annual report

The annual report is the necessary document which is the explanation of the financial statement of the company. It is the clarification of every financial condition and their activities. The front part of the audit report presents the images, illustration, and the activities over the last year and the back part of the audit report presents the finance and activities.
Mainly the annual report aimed to be prepared to provide the corporate business operation to the public as the annual report have details of all the financial activities of previous year. That’s why shareholders or others, requires this report to analyze the financial position, and all other performance.

These following are the list of stuff which an annual report requires.

  • General corporate details.
  • Letter to shareholder.
  • Financial and operating highlights.
  • Management’s discussion and analysis.
  • Narrative document, image and charts.
  • Financial statement, balance sheet, cash flow statement, and income statement.
  • References to the financial statement.
  • Auditor’s report.
  • Summary of financial data
  • Accounting policy

How can we use the annual report for any purpose?

The purpose of the annual report Is to show the financial condition to the shareholders, debtors, government and etc. so that they can measure the following things about that particular company.

  • Annual report uses to show the profitability or loss
  • Annual report uses to show the growth of the company.
  • Annual report uses to show their ability to maintain earning to increase their profit.
  • Annual report uses to show their expenses and the revenue generate over the years.
  • Annual report uses to show the capacity the company to pay the obligation.

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