Accounting All-in-One For Dummies

Chapter 5

Studying the Report to the Shareholders

In This Chapter

Staying private or going public: Why annual reports differ among companies

Identifying the three purposes of a corporate annual report

Recognizing common sections in an annual report

Analyzing Form 10-K

Most of the chapters in Books IV and V are devoted to explaining how to prepare financial statements (the income statement, balance sheet, and statement of cash flows). But what happens to these statements after they're done? Do they just get filed away in case anyone asks to see them?

Absolutely not! The financial statements become the heart of a company's annual report to its shareholders. An annual report is a document that the company can share with its current owners, potential investors, creditors, the media, and so on; it can be an important public relations tool that shows the outside world how the company is doing. For many companies, the report is also a regulatory requirement.

This chapter explains the ins and outs of a corporate annual report, including the three key purposes it serves. Here you also find ...