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Why Annual Reports Are Important to UsersAn annual report can give us a lot of important information about a company. When we're a regular stockholder, the company sends us its annual report. If we're not already a stockholder, we may contact the company's shareholder service department for a hard copy.
We can often view a company's annual report at its Web site. Any major search engine can help us find it. Downloading or printing the annual report should be easy.
We need to carefully analyze an annual report to find out the following:
· We want to know how well the company is doing. Are earnings higher, lower, or the same as the year before? How are sales doing? These numbers should be presented clearly in the financial section of the annual report.
· We want to find out whether the company is making more money than it is spending. How does the balance sheet look? Are assets higher or lower than the year before? Is debt growing, shrinking, or about the same as the year before?
· We want to get an idea of management's strategic plan for the coming year. How will management build on the company's success? This plan is usually covered in the beginning of the annual report frequently in the letter from the chairman of the board.
Our task boils down to figuring out where the company has been, where it is now, and where it's going. As an investor, we don't need to read the annual report like a novel from cover to cover. Instead, approach it like a newspaper and jump around to the relevant sections to get the answers we need to decide whether we should buy or hold on to the stock.
The process of preparing an annual report provides us with an essential and comprehensive document to present to investors and lenders who express an interest in our business, or potential stakeholders who we approach for funding. We could always assemble this information in the middle of the year if and when we need it, but it is far more convenient to have it on hand already, and our information is more accurate and useful if we prepare it in a timely fashion.
What else can I help you with?
The users of annual report?
shareholders creditors employees customers financial analysts
Why does accounting exist?
Accounting exists to report financial numbers of a business to external users like creditors, shareholders, and suppliers.
What do you think is the major purpose of financial statements?
the objective is to evaluate and report a company's fianancial performance fairly and correctly and provide useful imformation for internal and external users for decision making.
What group or groups of people are not considered to be the external users of accounting information?
Internal Users of accounting information would not usually be external users. Management, staff, the board, would all be classed as internal users of financial information.
Examples of external users of accounting information?
external aiditor,shareholder,goverment etc
Whos is users of annual report?
Explain the users of annual report
The users of annual report?
shareholders creditors employees customers financial analysts
Do the independent external auditors audit the entire annual report?
Auditors should express independent opinion on every information presented by the company to the the users (may be public, suppliers, SARS, shareholders ect)
Why does accounting exist?
Accounting exists to report financial numbers of a business to external users like creditors, shareholders, and suppliers.
What is the importance of the balance sheet?
its snapshot of business.. and a kind of information for external or internal users, for to let them decide for to invest in company or vice vrsa
Who are the Internal and External Users of Information?
Internal users of information are those business units within the organization. While, external users of information are those business linkages (outside) of the organization.
What do you think is the major purpose of financial statements?
the objective is to evaluate and report a company's fianancial performance fairly and correctly and provide useful imformation for internal and external users for decision making.
What group or groups of people are not considered to be the external users of accounting information?
Internal Users of accounting information would not usually be external users. Management, staff, the board, would all be classed as internal users of financial information.
Are shareholders internal or external users of accounting information?
Internal users would be managers so that they can make decisions about how to manage and also see how effectively they have managed. External users would be potential investors, the Government, lenders, the public, unions...
Examples of external users of accounting information?
external aiditor,shareholder,goverment etc
Difference between external users and internal users of accounting information?
External Users of accounting information are NOT directly involved in running the organization. Internal Users of accounting information are those individuals directly involved in managing and operating the organization.
What is the importance of the auditor's report to its users?
The auditor's report is an authoritative indication of whether or not the company being audited has followed the generally accepted accounting principles. It also gives an indication regarding whether the management is using proper financial reporting procedures.
