The Essential CFO: A Corporate Finance Playbook

Chapter Twenty

Communicating Financial Results

FOR ALMOST ALL PUBLIC COMPANIES, the announcement of their quarterly and annual results is punctuated by a web-based conference call that permits the management team to highlight the key items from the financial statements, update investors concerning their accomplishments and challenges, comment on their future plans and business outlook, and entertain questions from analysts and investors.

Private companies likewise have developed routines for communicating their results, but it is harder to generalize with respect to the specific steps that are followed. Nonetheless, it is undoubtedly true that like their public company counterparts, private company CFOs typically view the quarterly and annual results as important junctures that require some effort to put the results in context and to provide the color that helps investors to understand them as clearly as possible.

EARNINGS CALL

In anticipation of announcing their results, CFOs will usually lead a process that begins a few weeks earlier and culminates with the conference call and follow-ups with analysts. The process generally follows a similar routine in most companies, although CFOs will adapt the routine for their particular facts and circumstances.

Identify Message Points

The process typically begins with the identification of the issues that will be on investor minds and the key points to address in communicating the financial results. Based on the forecasted results, CFOs ...