Annual reports can be daunting, and you may be relieved to know that you don’t actually need to scour every page of one. The following parts best serve to give you the big picture:
Auditor’s report: Tells you whether the numbers are accurate and whether you should have any concerns about the future operation of the business
Financial statements: The balance sheet, the income statement, and the statement of cash flows; where you find the actual financial results for the year
Notes to the financial statements: Details about potential problems with the numbers or how the numbers were derived
Management’s discussion and analysis: The higher-ups’ breakdown of the financial results and other factors that impact the company’s operations
The rest is fluff.
