How to write the actual status of the annual report of a snack bar

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How to write a company's annual report

Three elements and seven functions are used to spread the company's image to stakeholders.

Anyone who has read a company's annual report knows how difficult it can be to write. The law stipulates that annual reports must comply with the law on the one hand and disclose facts in a highly technical manner on the other. To strike a balance between "compliance" and "disclosure," there must be clear disclosure of what is happening in the company, and the disclosure must be useful information. This is where the challenge lies in annual report writing.

Three functions of annual reports

Annual reports usually have the following three main functions:

Improve corporate relations. For a company, the annual report is a great opportunity to sing the praises of its achievements and its market. Many pages—usually in the first half of the report—are devoted to discussions of markets and marketing programs. Arguably, these are often far more interesting than financial statements and footnotes, and often include a plethora of colorful charts and dazzling photos.

Meet government management requirements. Many countries require companies to publish audited financial statements. These statements are filed with the stock exchange and are visible to the public. Almost all public company websites link to an "Investors" section where the complete annual report is posted.

Provide investor information. In addition to the financial statements issued by companies required by the state, investors also want to understand the company's situation at all levels. They are interested in the market the company faces and make their own judgments about its effectiveness in a competitive environment. Annual reports also include information on quarterly revenue and earnings, high and low stock prices, earnings per share, and dividends. Most annual reports list operating results for three to five years, and some even provide information for ten years.

Three elements of an annual report

The annual report must simultaneously meet the above three purposes. Therefore, the annual report must reflect the following elements:

The company's financial strengths and Operational results. Begin by highlighting information on a few most basic issues. Has the company raised sufficient capital? How much of the financing is equity investment and how much is debt? Are revenues and profits growing, flat, or shrinking? Is the company making a profit? These questions need to be answered one by one to reflect actual conditions and trends.

Degree of price volatility. Many investors and analysts agree that price volatility is a reasonable test of market risk. As a technical indicator, price volatility is a valuable test, especially when applied in conjunction with fundamental testing.

However, there is also value in expressing a company's fundamental volatility. This can provide a reference for revenue and profit trends. Are the numbers consistent, moving in the same direction each year, or are they changing dramatically? Product diversity. It is necessary to reflect the diversity of a company's product offerings, as this is often highly relevant to the company's competitive position and long-term potential.

Seven Parts of an Annual Report

The components of an annual report provide companies with channels to communicate with government regulators, analysts, and investors. This includes:

Letter from the Chairman. Most companies emphasize letters from the chairman or CEO. This "Letter to Shareholders" is a direct message from the company's top executives discussing key changes, events and operations over the past year. The purpose of the letter is to express a positive attitude towards all situations.

Lucent’s 2004 “Letter to Shareholders” begins as follows: “Fiscal year 2004 was a critical year for our company. For the first time since 2000, we reported a profit and achieved We have grown annual revenue and generated positive cash flow from operations, and we have developed a clear vision for next-generation communications and built the capabilities needed to make us a preferred partner to our customers. Achieved by growth opportunities, rigorous execution, and controlling costs and expenses.

”

Kodak’s 2004 annual report has some very optimistic introductory paragraphs in its “Management Letter” section: “In the first year of implementing our digital transformation strategy, Kodak took off quickly—and we also This momentum has been maintained. "From strong digital revenue growth to effective management of decline in legacy businesses to the completion of our digital acquisition program, these results demonstrate that we are building a more diverse, leaner and stronger Kodak for the future.< /p>

“In short, our strategy is on the right track. ”

Marketing and Marketing Plans. Another section of the annual report is filled with photos of happy employees, clean production floors, and neatly stacked products in warehouses. Companies often put their best slogans and The slogan is placed in this section. General Motors' "Hands on the wheel, eyes on the road" is a perfect example. This slogan is placed on top of a dynamic photo of a new car. The 2004 annual report also has several slogans, such as "driven to excite" and so on.

Motorola's advertising promotions in the form of slogans such as "Why Motorola? Why now? What's next?" It is often used in the introduction, cover and market sections of annual reports.

The market description section is particularly helpful in letting people understand the diversity of the company's business. For example, many people do not know that it owns the famous Philli Morris tobacco. The brand's Altria Group also owns Kraft Food Company, and I don't know that Kodak Group owns Creo, a system provider for the commercial printing industry.

The marketing and marketing section of the annual report must include the following key points. Contents:

? Specific information about the company's products and market scope

? Geographical impact and geographic segmentation of the market

? The company's level of diversification, especially Comparison with the company's competitors

The company's position in the industry

Discussion and analysis by the company's management This section is an explanation of the financial statements. , can help readers understand management's views on development trends and understand the importance of specific numbers. Altria's 2004 annual report has 19 pages of "Management's Discussion and Analysis of Financial Conditions and Operating Results", which is divided into several pages. Small sections, including "Company Description", "Executive Summary", "Critical Accounting Policies and Estimates", "Consolidated Results of Operations", "Financial Review" and "Factors that May Affect Future Results"

Some of these sections are similar to those discussed in the Notes section (see below), but the difference is that this section is an opportunity for management to provide explanations, whereas the Notes tend to provide passive accounting explanations and disclosures. Most companies are similar in the details of this section. IBM's "Management Discussion" section is 25 pages long and includes the following sub-headings: "Roadmap," "Management Discussion Points," "Business Description," and "One-Year Review." ", "Previous Year Review", "Prospects", "Employees and Global Workforce" and "Global Financial Condition".

Audit opinion. The financial statements are issued by the company's external auditor, which A submission is provided in the annual report of most large companies. Altria's 2004 audit opinion was provided by PricewaterhouseCoopers. Its basic opinion was: "In our opinion, the attached consolidated balance sheet and related consolidated statement of earnings, statement of stockholders' equity and statement of cash flows present, in all material terms, It fairly reflects the financial position of Altria Group Corporation and its subsidiaries as of December 31, 2003 and 2004, as well as the operating results and cash flows for each of the three years preceding December 31, 2004. "

IBM's "Independently Registered Public Accounting Firm Report" section has the same wording. In both cases, the companies' external auditors assured analysts and investors that the financial statements "fairly reflected" the actual conditions of the company's operations and valuations.

Summary of financial data. Every company chooses to publish some data. Choosing data itself is just a matter of preference. Generally speaking, there are no fixed standards for what data should be selected or how accurate the data should be. For example, IBM provides basic information on revenue, profitability and valuation. In the retail industry, many companies summarize the number of newly opened or closed stores each year. Wal-Mart's summary will cover the past ten years and break down the numbers by store type and domestic or foreign address.

Comments. Annotations can reveal important information. They take the numbers in financial statements and explain what they mean, how values ??are assessed, and what conditions may affect future profits and valuations.

The notes section of an annual report is usually longer than any other section. The complexity of the notes section is due to the complexity of accounting itself, the breadth of the topics that must be covered, and the nature of the business of many large companies, which tend to have different types of business operations.

Shareholder information and price history. At the end of the annual report, some shareholder information should be written, mainly contact information. Altria's shareholder information is the final section of the 2004 annual report and includes corporate and branch addresses, telephone numbers, website addresses, direct share purchase information, stock transaction information, and the date and location of the upcoming annual shareholder meeting.

The original text is excerpted with permission from the book Annual Reports: What the Numbers and the Fine Print Can Reveal About the True Health of a Company by Michael C. Thomsett. Copyright registered by the author in 2007. The book is published by AMACOM, a subsidiary of the American Association of International Management. Translated by Jiang Xiaoshan. The English version of this book can be obtained from McGraw-Hill Education (Asia) in Singapore.

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