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What Is an Annual Report?

Understanding annual reports, special considerations, mutual fund annual reports, the bottom line.

• Corporate Finance
• Financial statements: Balance, income, cash flow, and equity

Annual Report Explained: How to Read and Write Them

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

An annual report is a document that public corporations must provide annually to shareholders that describes their operations and financial conditions. The front part of the report often contains an impressive combination of graphics, photos, and an accompanying narrative, all of which chronicle the company's activities over the past year and may also make forecasts about the future of the company. The back part of the report contains detailed financial and operational information.

Key Takeaways

• An annual report is a corporate document disseminated to shareholders that spells out the company's financial condition and operations over the previous year.
• It was not until legislation was enacted after the stock market crash of 1929 that the annual report became a regular component of corporate financial reporting.
• Registered mutual funds must also distribute a full annual report to their shareholders each year.

Investopedia / Jake Shi

Annual reports became a regulatory requirement for public companies following the stock market crash of 1929 when lawmakers mandated standardized corporate financial reporting. The intent of the required annual report is to provide public disclosure of a company's operating and financial activities over the past year. The report is typically issued to shareholders and other stakeholders who use it to evaluate the firm's financial performance and to make investment decisions.

Typically, an annual report will contain the following sections:

• General corporate information
• Operating and financial highlights
• Letter to the shareholders from the CEO
• Narrative text, graphics, and photos
• Management's discussion and analysis (MD&A)
• Financial statements, including the balance sheet, income statement, and cash flow statement
• Notes to the financial statements
• Auditor's report
• Summary of financial data
• Accounting policies

Current and prospective investors, employees, creditors, analysts, and any other interested party will analyze a company using its annual report.

In the U.S., a more detailed version of the annual report is referred to as Form 10-K  and is submitted to the U.S. Securities and Exchange Commission (SEC). Companies may submit their annual reports electronically through the SEC's EDGAR database . Reporting companies must send annual reports to their shareholders when they hold annual meetings to elect directors. Under the proxy rules, reporting companies are required to post their proxy materials, including their annual reports, on their company websites.

The annual report contains key information on a company's financial position that can be used to measure:

• A company's ability to pay its debts as they come due
• Whether a company made a profit or loss in its previous fiscal year
• A company's growth over a number of years
• How much of earnings are retained by a company to grow its operations
• The proportion of operational expenses to revenue generated

The annual report also determines whether the information conforms to the generally accepted accounting principles (GAAP). This confirmation will be highlighted as an " unqualified opinion " in the auditor's report section.

Fundamental analysts also attempt to understand a company's future direction by analyzing the details provided in its annual report.

In the case of mutual funds, the annual report is a required document that is made available to a fund's shareholders on a fiscal-year basis. It discloses certain aspects of a mutual fund's operations and financial condition. In contrast to corporate annual reports, mutual fund annual reports are best described as "plain vanilla" in terms of their presentation.

A mutual fund annual report, along with a fund's prospectus and statement of additional information, is a source of multi-year fund data and performance, which is made available to fund shareholders as well as to prospective fund investors. Unfortunately, most of the information is quantitative rather than qualitative, which addresses the mandatory accounting disclosures required of mutual funds.

All mutual funds that are registered with the SEC are required to send a full report to all shareholders every year. The report shows how well the fund fared over the fiscal year. Information that can be found in the annual report includes:

• Table, chart, or graph of holdings by category (e.g., type of security, industry sector, geographic region, credit quality, or maturity)
• Audited financial statements, including a complete or summary (top 50) list of holdings
• Condensed financial statements
• Table showing the fund’s returns for one-, five- and 10-year periods
• Management’s discussion of fund performance
• Management information about directors and officers, such as name, age, and tenure
• Remuneration or compensation paid to directors, officers, and others

How Do You Write an Annual Report?

An annual report has a few sections and steps that must convey a certain amount of information, much of which is legally required for public companies. Most public companies hire auditing companies to write their annual reports. An annual report begins with a letter to the shareholders, then a brief description of the business and industry. Following that, the report should include the audited financial statements: balance sheet, income statement, and statement of cash flows. The last part will typically be notes to the financial statements, explaining certain facts and figures.

Is an Annual Report the Same As a 10-K Filing?

In general, an annual report is similar to the 10-K filing in that both report on the company's performance for the year. Both are considered to be the last financial filing of the year and summarize how the company did for that period. Annual reports are much more visually friendly. They are designed well and contain images and graphics. The 10-K filing only reports numbers and other qualitative information without any design elements or additional flair.

What Is a 10-Q Filing?

A 10-Q filing is a form that is filed with the Securities and Exchange Commission (SEC) that reports the quarterly earnings of a company. Most public companies have to file a 10-Q with the SEC to report their financial position for the quarter.

Public companies must produce annual reports to show their current financial conditions and operations. Annual reports can be used to examine a company's financial position and, possibly, understand what direction it will move in the future. These reports function differently for mutual funds; in this case, they are made available each fiscal year and are typically simpler.

U.S. Securities and Exchange Commission. " Speech By SEC Commissioner: Remarks Before the Securities Traders Association ."

U.S. Securities and Exchange Commission. " Annual Report ."

U.S. Securities and Exchange Commission. " How to Read a 10-K/10-Q ."

U.S. Securities and Exchange Commission. " Final Rule: Shareholder Reports and Quarterly Portfolio Disclosure of Registered Management Investment Companies ."

U.S. Securities and Exchange Commission. " Mutual Funds - The Next 75 Years ."

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What is an annual report definitions, requirements and examples.

You want to impress shareholders, attract more investors, highlight your brand, engage your employees, or just file a report with the Securities and Exchange Commission (SEC). You need an annual report - but exactly what is an annual report? 

But today, businesses and organizations create many different types of annual reports. Each type of annual report out there is designed with a very specific end goal in mind. 

If that’s what you want to learn about - you’re in the right place. 

To help you understand the world of annual reports, this post looks at everything you need to know about them - what they are, the different types, what goes into them, who reads them and how to create them. The post is broken down into the following sections. If you’d like to learn about something specific, click on a link to jump ahead. 

• What is an annual report?
• What is included in an annual report?
• Who reads an annual report?
• What is the easiest way to create an annual report?
• How do you summarize an annual report?
• How do you create an attractive annual report?

If you want to check out our annual report templates to get a sense of what they look like and get design ideas, just visit our annual report templates page. 

see all annual report templates

1. What is an annual report?

A traditional annual report is an in-depth, comprehensive overview of a business’s achievements and financial statements from the preceding year. It is produced on a yearly basis, and provided to shareholders, investors, stakeholders and others to inform them of the organization’s overall performance, financial status, and vision for the future.

Today, annual reports are often used as marketing tools for organizations to impress shareholders, investors, or donors; attract new ones; and to showcase their brand to employees, clients and others.  

This example of an annual report design makes use of friendly, illustrated icons and bright colors to liven up very dry content. Not only is it more engaging to read, the organization’s branding jumps right off the page.

get this annual report template

Companies like Mailchimp regularly publish creative annual year-in-review reports , always outdoing their previous designs.

These types of annual reports are well-designed, fun, and engaging. They share information in a way that’s exciting and easy to understand, and serve as great branding assets. These types of annual reports can also be referred to as ‘year-in-review’ reports, highlighting major milestones for that year. This isn’t just something businesses do, either. Nonprofit organizations consistently promote their cause and the impact of their organizations. Annual reports, year-in-review reports, or impact reports that highlight the past year’s achievements are all staple nonprofit marketing  tactics to gain donors and supporters. 

Just take a look at this pages out of  Novozymes  annual report. 

This is an annual report you can actually enjoy reading . The visuals are fun, engaging, informative and reflect the uniqueness of the Novozyme brand. The simple and attractive design is super helpful, since it helps us understand pretty complex information. 

2. What is included in an annual report?  

A typical annual report for a public company must have the following sections: 

• A letter from the CEO
• Corporate financial data
• Operations and impact
• Market segment information
• Plans for new products
• Subsidiary activities
• Research and development activities 

These are the barebones expectations for an annual report. Of course, depending on the size of your organization or type of organization, your annual report can range anywhere from 20 pages to 200. 

Keep in mind, actual human beings read your annual report. It doesn’t just get filed away in a dusty government basement, never to be seen again. Making it easy to read and review is essential in helping people understand your annual report’s findings and how your business is performing. 

So on top of those individual sections, it helps to include things like: 

• A cover page
• A table of contents
• Mission and vision statement
• Charts, graphs and tables
• CSR initiatives
• An afterword
• A glossary 

These are two examples of reader-friendly annual report designs.   

Year end annual report template

This year end annual report template uses a color palette that pops, quality stock photos, and organized tables to  visualize financial data and performance metrics. It includes a brief introduction and a table of contents. 

Get this year end report template

Simple nonprofit annual report template

This nonprofit annual report reduces the use of text, and relies more on visuals, icons and charts to communicate data and figures. 

Get this nonprofit annual report template

Ultimately, you decide how much information to include in your annual report, on top of what’s required. The best way to decide what to include, and how you present your annual report, is to consider the audience you’re creating an annual report for. 

3. Who reads an annual report?

An annual report’s primary audience is your shareholders. These people have a legal right to know how your company is performing, how it is changing, what it has planned for the future and other facets of its operations. 

But shareholders aren’t the only people with an interest in your company’s performance, its products, its projects, and plans for the future. More often, businesses use annual reports to present the organization’s brand as a whole. Your business’s vision for the future, its values and ideals, its social initiatives, its ambitions are all things that shareholders, as well as investors, employees, customers, donors (if you’re a nonprofit) business journalists and many others will take an interest in. 

Annual reports for your staff

Annual reports are great ways for employees to learn more about your business and the brand. They can go through an annual report to see what other projects and initiatives the company has invested in. This is helpful for large businesses with hundreds or thousands of employees.

According to the most recent HR trends , employees care more than ever about employer branding and values. Take a look at the information highlighted in the sharply designed  Roche Annual Report .

Among other things, this annual report highlights the value placed on the hard work of employees, teams and entire departments that have helped a business succeed. 

In many instances, employees are shareholders within the company and they’re just as interested in how the company is performing. It’s another way to reinforce the value of their work, by showing how their team or department has helped the company to grow. 

In the case of nonprofit organizations, annual reports help staff understand the impact of their hard work in the community. 

Annual reports for your customers

Findings from Accenture Strategy’s global survey found that customers care deeply about the values and behaviors of major brands . Millennials and Gen-Zers in particular care most about brands driven by a purpose other than profit. According to the survey, nearly 40% of respondents stated they would stop purchasing from brands that appear socially irresponsible or ethically questionable. 

You can see in this  L’Oreal Annual Report , there are sections dedicated to their ethics and values. 

Annual reports allow for a brand to present itself in the best light possible. Businesses can demonstrate the values that set them apart from competitors. They can talk about the types of suppliers and manufacturers they work with, how materials are sourced, the quality of their products, the well-being of their employees, their impact on the environment and more. 

Nonprofit annual reports for donors

Nonprofit annual reports are testaments to all the money received and hard work that nonprofit organizations have done throughout the year. I’d argue they’re absolutely essential to a nonprofit. 

Nonprofit annual reports demonstrate how the support from donors has helped to change people’s lives. After all, donors aren’t purchasing products the way customers do, what they’re “purchasing” is a social good that they want others to receive. 

Annual reports highlight exactly how people’s lives are being transformed for the better. Check out the 2018 annual report from Girls Who Code . 

Not only do they share the tremendous impact of the organization which donors want to know about - they do it in a visually creative, engaging way.

A nonprofit annual report highlights your organization’s successes, it provides some feel-good fulfillment to your staff who can look back at the fruits of their hard work, and donors know their money is being put to great use. 

A nonprofit annual report also helps you make an appeal for more donations, bigger donations, grow your paid staff, and win over more volunteers for the coming year.

4. How do you summarize an annual report?

There are two simple ways to summarize an annual report. You can create an annual report infographic, or an annual report presentation. Both are great ways to share dense data and information in a way that’s manageable for your audience. 

Annual report infographics 

Let’s start with the annual report infographic. The advantage here is that you let the data tell the story. Rather than provide pages of analysis, visualize your data through charts, graphs, and icons. Take a look at this simple shareholder report infographic: 

GET THIS ANNUAL REPORT INFOGRAPHIC TEMPLATE

The infographic focuses on a single data point. There may be layers of information that explain how that figure was determined, but this summary is practical and direct. For a more detailed report, create a long-form infographic report, by adding multiple sections that highlight individual data points. 

You can use a layout like this annual report infographic: 

get this infographic nonprofit report template

The use of text is minimal. The numbers and data tell the readers everything about the impact of the organization and how it has performed. This is an effective way to share relevant and valuable performance insights with shareholders, investors, or donors. 

see all infographic templates

Annual report presentations

An alternate approach to summarizing an annual report is to create annual report presentation slides . You can share the slide deck on its own, or help it guide your presentation on key findings in your company’s complete annual report. 

This simple annual report presentation deck dives right into the content. It’s a great example of how to break up data and make information easily digestible. 

GET THIS ANNUAL REPORT PRESENTATION

Note how the large headings tell the audience exactly what each slide is focused on. Key findings are also highlighted on each slide, to complement the data the charts/graphs show. 

If you expect a lengthier presentation slide, include an agenda or overview of your annual report presentation. This lets people know what you’ll be covering and how far along in your presentation you are. 

The key to presenting is letting your audience know where they are in your presentation. Are you only halfway through or three quarters of the way done? Even with a summary, preparing your audience helps to keep them engaged, rather than distracted. 

Our templates library has an attractive range of annual report presentation templates. Interested in designing your own? Check out our annual report presentation templates page.

SEE ALL BUSINESS PRESENTATION TEMPLATES

5. What is the easiest way to create an annual report?

As you’ve seen from the actual annual report examples I shared, and our annual report templates, annual reports are packed with a ton of content - text, visuals, charts, financial figures and more. 

Hiring a design agency to design your annual report is one option. The cost for a professionally-designed annual report ranges anywhere from $5,000 to $12,000, and then depending on the types of visuals you need, even more. 

Keep in mind, you’ll still need to pull all the content and data together yourself. 

To save your organization time and money, without compromising on design, a professional annual report template is the way to go . You can visit Venngage’s annual report templates page today, browse hundreds of unique designs for a number of industries, and use preset layouts and design styles to format your content. 

Customizing the templates is straightforward and doesn’t require any design experience. The Venngage editor is a drag-and-drop tool that’s simple to use. With it you can do a number of things like: 

• Apply your branding through Venngage’s My Brand Kit , which includes your organization logo, brand colors and brand fonts
• Use chart and graph widgets to visualize financial data, trends, statistics and more
• Add beautiful icons that really elevate your annual report design
• Apply high-quality stock photos directly from Pixabay and Unsplash (or upload your own professional images). 

6. How do you create an attractive annual report?

Why does the design of an annual report matter? Those who are interested in the information will take the time to read it, won’t they? 

Sure, but they might not understand everything you’ve tried to communicate. Keep in mind, you’re sharing tons of data and ideas. If it’s boring and dry, investors might just take a nap instead. 

I also mentioned that annual reports are a way to present your brand, and that employees and customers alike would be potential readers. How you present your organization influences their opinion of you, your values, what you’re all about and all the data you’ve packed in. 

Captivating, engaging design provides your many different readers with an enjoyable experience, and helps them walk away with your annual report’s key takeaways. So below, I'll share a handful of annual report design best practices for you to keep in mind. 

• Create a high-impact annual report cover page with large images

The cover of your annual report should grab, and hold, the attention of your readers. This can be hard to achieve without the help of a professional designer.

The workaround?

Use large, high quality images as the focal point of your cover page for a bold, eye-catching effect.

In this annual report example, bright blocks of color are combined with a full-page image to create a simple, yet striking design.

GET THIS TEMPLATE

Cover images should not be used purely for decoration. They should tell your customers, stakeholders, and employees something about the culture or values of your organization.

Use cover photos to set the tone for the report and to convey the company spirit that you’d like to project to your readers.

Does your company focus on positive customer experiences?

On company culture?

On high quality, professional products?

Take a look at how each of the companies below uses cover images to project their own, unique narrative focus. Nestle is focused on customer experiences, GE is focused on their employees, and Thermo Fischer Scientific is all about the product:

Source high quality images for a professional touch.

Using low quality or pixelated images can make the report look amateur and reflect poorly on your company or organization.

If you’re going to go with a full-page cover image, it’s worth investing in a professional photographer to take photos of real employees or customers, like L’Oreal has done for their annual report:

Otherwise, try to source high-resolution images from respected sites like Unsplash or Pixabay . You can access Unsplash and Pixabay's complete stock photo library in Venngage's editor as well. 

• Choose the right charts for your annual report metrics

Annual reports are all about the numbers, meaning that a key ingredient of creating an effective annual report is choosing the right chart for each metric .

There are a few types metrics found in most annual reports, including:

• Financial highlights (revenue, earnings per share, growth, profit margin)
• Month by month financial trends
• Sales breakdown by market and by product
• Year over year financial performance

The type of data you are visualizing should determine what type of chart you use. Let’s review the best visualization types for each type of metric.

Use “big number” charts to summarize financial highlights.

The financial highlights section of an annual report should summarize the most important facts and figures of the year simply and concisely.

The easiest way to show this assortment of different metrics in a small space is to simply write out those numbers in big, bold text. We call this type of visualization a “big number” chart.

In a big number chart, the size of each number should vary based on its importance, as shown in Concho Resources’ 2017 annual report :

As you can see in the example below, big number charts communicate key metrics quickly, clearly, and with impact.

CREATE THIS REPORT TEMPLATE

Use line charts to display monthly trends.

Line charts are the standard display for tracking changes over time, which is essential in an annual report. Investors and shareholders will want to see month by month trends for all sorts of financial metrics, including sales, profits, margins, and share earnings.

Line charts are perfect for comparing and contrasting sales trends across competitors, as seen in this annual report example:

As seen in Adidas’ 2016 annual report, line charts are particularly useful for tracking the growth of share prices over time (compared to market indices):

Use stacked bar or donut charts to show market composition.

Another core component of the finances section of an annual report is market segmentation, which shows the breakdown of annual sales into different categories.

You might break down your sales by geographic region, by product category, by customer profile...whatever helps your business identify opportunities for growth and improvement.

Traditionally, sales breakdowns are visualized with pie or donut charts, a standard method for showing part-to-whole relationships.

Pie charts, while intuitive to read, are notoriously poor data visualization tools. Most people struggle to distinguish between the size of similar pie segments at a glance.

A better choice would be a stacked bar chart, seen in the market segmentation report below.

Use grouped bar charts to compare year-over-year financial performance.

Year over year financial performance is of interest to many potential readers.

Investors, employees, and customers will all want to see how an organization’s current performance compares to that of previous years. It’s arguably the most important metric to be included in an annual report.

The most efficient method for visualizing year-over-year performance is with grouped bar charts, like these ones in GE’s 2017 annual report. The side-by-side bars emphasize the changes from one year to the next.

As seen above, it’s a good idea to use a highlight color to draw extra attention to the year of interest (2017, in this case).

• Use bold color accents to highlight key facts, quotes, and figures

Color should never be used simply for decoration in an annual report.

Although aesthetics should be a consideration, color should primarily be used to enhance communication--to clarify the information on the page.

As I just mentioned for the bar charts above, color can be used to highlight key information. It can be used to draw the reader’s attention to particularly important facts, figures, or data points in information-dense displays of text and data.

Check out how the yellow color is used to create visual contrast in this annual report example:

The contrast between the green background and the yellow highlight color draws attention to the most valuable bits of information: the data! The contrast creates points of visual focus, helping us make sense of the information on the page.

When creating your annual report, try to pick one highlight color and apply it to every key data point that you want your readers to pay attention to. The brighter, the better!

To learn more about using contrasting color schemes, check out this guide on how to use colors in infographics .

• Create a clear type hierarchy to make your annual report skimmable

Annual reports are typically quite information-heavy, with a great deal of technical information on each page.

To prevent your readers from getting lost (or worse: bored), it’s important to create a clear hierarchy of information on each page. This hierarchy will help your reader navigate through the report, allowing them to easily skim through to the most pertinent information.

You can create hierarchy by altering the size, weight, and placement of various elements. Headings should be larger than subheadings, key figures should be bolder than general body text, chart captions should be small and light, etc.

Check out how text hierarchy enhances the readability of the corporate performance annual report below. The titles and key numbers are styled in bold, black, large text, making them stand out from the rest of the page, while less pertinent text, like labels and captions, are smaller and more subtle:

When creating this visual hierarchy, it’s important to be mindful of the principles of typography. You don’t want the typography to distract from the content of the annual report.

Here are a few principles to keep in mind:

• Use a maximum of three different fonts to ensure the text is interesting but not chaotic.
• Use a stylized font for the header text and a minimal font for the body text.
• Use different font weights and styles to create contrast and draw the eye.

Want to learn more about typography for annual reports and infographics? Check out this guide on how to choose fonts .

• Create your annual report on a grid for a balanced page layout

I strongly suggest using a grid to format your annual report design.

Building off of an underlying grid framework will ensure consistency from page to page, while allowing you to experiment with different compositions (to keep your report interesting).

Using a grid can also help you create negative space, which is critical to great design. It gives the viewer time to process what they are seeing before moving on to the next section. Negative space is the core design component of most crisp, modern designs, like the one below:

• Focus on what’s important with a condensed one-pager annual report

Short, one page annual reports (also known as one-pagers) are gaining popularity as an alternative to extensive multi-page annual reports. These reports cover only the most important metrics, making it possible to grasp an organization’s performance at a glance.

One of the keys to a successful one page annual report is a simple color scheme. Pair neutral greys with a single bright highlight color for a sleek, cohesive look.

I hope this guide has answered the question, “what is an annual report”. To wrap up, here are all of the design best practices you should keep in mind when creating your next annual report.

Now you know everything there is to know about annual reports! If you still have burning question, comment and let us know. We'll share our expertise.

You can also check out more resources on report design examples, templates and tips below.

More report design guides:

55+ customizable annual report templates, examples & tips.

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How to Quickly & Effectively Read an Annual Report

• 04 Jun 2020

Intelligent investing requires analyzing a vast amount of information about a company to determine its financial health. Armed with this information, an investor can better understand how much risk might be involved with backing a company based on how well it’s performed historically, in recent quarters, and toward its financial targets.

Exactly where this information comes from depends on the specific company that’s being invested in, but typically requires several financial statements, including a balance sheet, cash flow statement, and income statement.

In addition to these documents, most investors look forward to reviewing a company’s annual report—a collection of financial information and analysis that can prove invaluable in evaluating the health of a company.

If you’re not an investor, but an employee working within a corporation, the annual report can impart valuable information pertinent to your career. Understanding how your company is performing and the impact your actions have had on its business objectives can help you advocate for a promotion or other form of career advancement .

If you’re unfamiliar with what goes into an annual report, there’s some good news: You don’t need to be a financial expert to get value out of the document or understand the messaging in it.

Here’s an overview of the different information you’ll find in an annual report and how you can put it to use.

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What Is an Annual Report?

An annual report is a publication that a public corporation is required by law to publish annually. It describes the company’s operations and financial conditions so that current and potential shareholders can make informed decisions about investing in it.

The annual report is often split into two sections, or halves.

The first section typically includes a narrative of the company’s performance over the previous year, as well as forward-looking statements: Letters to shareholders from the chief executive officer, chief financial officer, and other key figures, as well as graphics, photos, and charts.

The second section strips the narrative out of the picture and presents a variety of financial documents and statements.

Unlike other pieces of financial data—and because they include editorial and storytelling—annual reports are typically professionally designed and used as marketing collateral. Annual reports are sent to shareholders every year before an annual shareholder meeting and election of the board of directors, and often accessible to the public via the company’s website.

Annual Report vs. 10-K Report

Annual reports aren’t the only documents public companies are required to publish yearly. The US Securities and Exchange Commission (SEC) requires public firms also to produce a 10-K report , which informs investors of a business’s financial status before they buy or sell shares.

While there’s similar data in both an annual and 10-K report, the two documents are separate.

10-K reports are organized per SEC guidelines and include full descriptions of a company’s fiscal activity, corporate agreements, risks, opportunities, current operations, executive compensation, and market activity. You can also find detailed discussions of operations for the year, as well as a full analysis of the industry and marketplace.

Because of this, 10-K reports are longer and denser than annual reports, and have strict filing requirements—they must be filed with the SEC between 60 to 90 days after the end of a company’s fiscal year.

If you need to review a 10-K report, you can find it on the SEC website .

What Information Is Contained In An Annual Report?

An annual report typically consists of:

• Letters to shareholders: These documents provide a broad overview of the company’s activities and performance over the course of the year, as well as a reflection on its general business environment. An annual report usually includes a shareholder letter from the CEO or president, and may also contain letters from other key figures, such as the CFO.
• Management’s discussion and analysis (MD&A): This is a detailed analysis of the company’s performance, as conducted by its executives.
• Audited financial statements: These are financial documents that detail the company’s financial performance. Commonly included statements include balance sheets, cash flow statements, income statements, and equity statements.
• A summary of financial data: This refers to any notes or discussions that are pertinent to the financial statements listed above.
• Auditor’s report: This report describes whether the company has complied with generally accepted accounting principles (GAAP) in preparing its financial statements.
• Accounting policies: This is an overview of the policies the company’s leadership team relied upon in preparing the annual report and financial statements.

What to Look for in an Annual Report

While all the information found in an annual report can be useful to potential investors, the financial statements are particularly valuable, as they provide data that isn’t obscured by any sort of narrative or opinion. Three of the most important financial statements you should evaluate are the balance sheet, cash flow statement, and income statement.

The balance sheet shows a company’s assets, liabilities, and owners’ equity accounts as of a specific date, illustrating its financial position and health.

The income statement shows a company’s revenue and expense accounts for a set period, allowing you to gauge its financial performance. Using trial balances from any two points in time, a business can create an income statement that tells the financial story of the activities for that period.

Cash flow statements provide a detailed picture of what happened to a business’s cash during an accounting period. A cash flow statement shows the different areas in which a company used or received cash, and reconciles the beginning and ending cash balances. Cash flows are important for valuing a business and managing liquidity, and essential to understanding where actual cash is being generated and used. The statement of cash flows gives more detail about the sources of cash inflows and the uses of cash outflows.

These three documents can help you understand the financial health and status of a company, and they’re all included in the annual report. When you read the annual report—including the editorial information—you can gain a better understanding of the business as a whole.

An annual report can help you learn more details about what type of company you work for and how it operates, including:

• Whether it’s able to pay debts as they come due
• Its profits and/or losses year over year
• If and how it’s grown over time
• What it requires to maintain or expand its business
• Operational expenses compared to generated revenues

All of these insights can help you excel in your role, be privy to conversations surrounding the future of the company, and develop into an effective leader .

Critical Information for Investors and Employees Alike

Being able to analyze annual reports can help you gain a clearer picture of where a company sits within its industry and the broader economy, illuminating opportunities and threats.

The best part about learning to read and understand financial information is that you don’t need to be a certified accountant to do so. Start by analyzing financial documents over a set period. Then, when the annual and 10-K reports are published, you can review and understand what leadership is saying about the operational and financial health of your company.

If you’re an investor, knowing how to read an annual report can give you more information from which to base your decision on whether to invest in a company. If you’re an employee within an organization, learning how to read and apply the information contained in an annual report is an essential financial accounting skill that can help you understand your company’s goals and capabilities and, ultimately, further your career.

Do you want to take your career to the next level? Explore Financial Accounting and our other online finance and accounting courses , which can teach you the key financial topics you need to understand business performance and potential. Download our free course flowchart to determine which best aligns with your goals.

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Start » strategy, what is an annual report , and how do you file it.

The U.S. Securities and Exchange Commission and many states require businesses to file annual reports. Use this guide to meet your reporting obligations.

Certain business entities must file annual reports (statements of information) with state governments, typically through the State Department. Public companies must give shareholders a yearly report detailing their operational and financial condition.

Additionally, public and certain private organizations may need to file a separate document with the U.S. Securities and Exchange Commission (SEC). So, which reports do you need to file or share with stakeholders? Explore the types of annual reports and learn how (and when) to file them.

What is an annual report for a small business?

A state-required annual report is a short document that explains who owns the company, what products or services it sells, and how to contact the people in charge. Many small businesses file an annual report with their formation state (where they initially registered their company) and any foreign states where they are registered to do business.

Wolters Kluwer said the following statutory business entities might need to file an information report:

• Business corporations .
• Nonprofit corporations.
• Limited liability companies (LLCs).
• Limited partnerships (LPs).
• Limited liability partnerships (LLPs).

The SEC requires publicly traded companies to share yearly reports with shareholders. Unlike state-mandated forms, this annual report is an in-depth accounting of a corporation’s finances and operations. Lastly, federal security laws mandate public corporations to file Form 10-K yearly.

[ Read more: S Corp vs. LLC: What’s the Difference? ]

State-mandated annual report filing

Most states require an annual report, also called a periodic report, statement of information, or annual registration. However, there are exceptions. For example, Arizona doesn’t require an LLC annual report, and if you formed your company in Indiana , you only need to send the report every two years.

Since rules and due dates differ, always check with your state’s business department. States usually send a reporting form to the business address on file. You can return it via postal mail along with any annual registration fees. Many also allow you to file your yearly report online.

Unlike state reporting requirements, a company’s annual report for shareholders is lengthy and tells a story about its financial health.

SCORE noted that state-mandated annual reports are “relatively short documents” and include:

• Your company’s name and address.
• Purpose of the business.
• Names and addresses of a corporation’s directors and officers.
• Registered agent’s name and address.
• Names and addresses of LLC members or managers.

Annual reports for shareholders

According to Investopedia , “Annual reports became a regulatory requirement for public companies following the stock market crash of 1929 when lawmakers mandated standardized corporate financial reporting.” These documents give a comprehensive view of your organization, allowing shareholders, stakeholders, and investors to understand your corporation’s financial position.

Unlike state reporting requirements, a company’s annual report for shareholders is lengthy and tells a story about its financial health. Harvard Business School Online said, “Usually, an annual report is split into two halves.” The first section shares “the company’s narrative,” and the second part “presents data” minus the “narrative components.”

Investor.gov stated that businesses must provide shareholders with annual reports when holding yearly meetings to elect the board of directors . Additionally, proxy rules require companies to “post their proxy materials, including their annual reports, on their company websites.”

An annual report template has the following sections:

• Summary of general business information.
• Annual performance highlights.
• CEO’s letter to the shareholders.
• Management’s discussion and analysis (MD&A).
• Financial statements .
• Supporting notes, photos, and graphics.
• Auditor’s report.
• Financial information summary.
• Review of accounting policies.

[ Read more: Which Type of Accounting Service Do You Need? ]

SEC rules for filing annual statements

Organizations required to report to the SEC — including all public and some private companies — must disclose financials yearly to the SEC. Section 12 of the Exchange Act defines a private reporting company as one that has more than $10 million in total assets and a class of equity securities with either 2,000 or more persons or 500 or more individuals who are not accredited investors, or one that “lists the securities on a U.S. Exchange.”

According to Form 10-K instructions

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What Is an Annual Report? What’s Included & When to File

Running a business can sometimes be exhilarating work, but it can also come with its fair share of tedium—thanks to the long list of tasks associated with compliance. Filing an annual report in your state of incorporation—and any additional states where you’re registered to do business—is one of those tasks. And like many business compliance tasks, the specific requirements to file vary from state to state.

What is an annual report?

An annual report is a brief overview of key facts about your company filed to the Secretary of State in any state where you are registered to do business. Typically, annual reports include business contact information and a record of the company’s activities (such as a merger or a dissolution) during a given reporting period.

States use annual reports to keep information about your company up-to-date and make sure that they are able to deliver routine government correspondence or contact you in the event of a legal action. In some cases, the Secretary of State also uses annual report information to assess your franchise tax obligations in a particular state.

An annual report can also be known as an annual statement, a statement of information , a periodic report , a biennial statement, or a decennial statement. Filing processes, fees, and frequency all vary by state—biennial statements are due every two years, as an example, and decennial statements are due every ten.

Annual report vs. annual shareholder report

Although both are sometimes referred to as annual reports, the annual information reports required of most business entities are distinct from the comprehensive annual shareholder reporting required of public companies. Annual shareholder reports are federally mandated disclosures designed to help stakeholders and potential investors evaluate a company’s performance and financial conditions and make informed investment decisions. They include quantitative and qualitative performance analysis, financial statements (including cash flow statements, income statements, and balance sheets), an auditor’s report, an overview of accounting policies, and details about the company’s operations.

Who’s required to file an annual report? Who isn’t?

Most states require limited liability companies (LLCs) , corporations, limited partnerships, and limited liability partnerships (LLPs) to file annual reports. In most cases, these business entities are required to submit an annual report in every state in which they are registered to do business.

Sole proprietorships and partnerships typically aren’t required to file annual reports, although jurisdictions may require annual renewals for certain types of business licenses.

What’s covered in an annual report?

Although specifics vary by state and business entity, annual reports typically include the following information about the company:

• Business name
• Primary office address
• A brief statement of business purpose
• Your EIN and any other state-issued registration numbers
• Registered agent information (if applicable)
• Addresses of offices in the state (if applicable)
• Fictitious name (if applicable)
• Number of authorized shares (for corporations that issue shares)
• The names and addresses of directors and officers (for a corporation), members and managers (for an LLC), and partners (for a partnership)

Some states will also request financial information, such as liabilities and assets located in the state.

Most states charge an annual reporting fee, which can range from $9 to over $1000 depending on the state, business entity type, and specifics about the company’s operations. Corporation or LLC fees, as an example, may be assessed based on the number of authorized shares or the number of LLC members.

When do you need to file an annual report?

Although there’s a lot of overlap in annual report content across states, due dates vary widely.

States require different filing frequencies and use different methods to establish filing deadlines. Depending on the state, you may be required to file annually, biannually, or once a decade. Your due dates might fall in a state-determined month (e.g. every January) or be based on when you originally registered to do business in the state.

These differences can make it tedious to track deadlines—especially if you have reporting obligations in multiple states. If you formed your business in New York in 2020 and registered to do business in ten other states after hiring remote employees , you might end up with six annual reports due in January, one each in June and July, one due every other December, and one due every tenth December.

Mosey ’s compliance platform can help you stay on top of these deadlines. With Mosey, you can automate filing annual reports in supported states, track requirements and recurring deadlines, receive alerts for key tasks, and manage state mail all in one place.

Penalties for not filing an annual report or filing late

Most states impose fees for filing a late annual report—and if you don’t file at all, consequences can be severe.

Failing to file an annual report in your state of incorporation can result in loss of good standing, affecting your ability to open business bank accounts or obtain financing. In some cases, it can even cause your business to be dissolved entirely.

If you don’t file a report in a state in which you are registered as a foreign entity, that state can revoke your ability to do business in the state.

Mosey features active monitoring and notifications to help you stay on top of annual report filing for your company. Import your incorporation date or foreign qualification date for each state and Mosey will calculate your annual report filing requirements and deadlines automatically. They will be added to your account for easy management and Mosey will alert you when they become upcoming tasks to complete. Mosey keeps it all organized by showing you the requirements, when they are due, and who is doing what. Mosey will even automate filing the annual report for you—just click a button and we’re on it.

Read more from Mosey:

• Certificate of Good Standing: The Business Owner’s Guide to How and Why
• What Is Tax Nexus? Nexus Types & Determining Tax Nexus
• What Is Foreign Qualification? Considerations & How to Qualify
• What Is Workers Compensation & How Does It Work?
• Exiting a PEO: Reasons, Considerations, and Checklist
• Hiring Remote Employees: Everything You Need to Know
• LLC Annual Report: What It Is, What’s Included & How to File
• These 5 States Require Short-Term Disability Insurance (2023)
• What Is an LLC (Limited Liability Company)?

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• Annual Reports

Annual Reports Explained: What They Are And How To Read And Write

An annual report is a document created by companies for stakeholders that outlines important information about an organization's financial and operational health. For publicly traded companies in most countries, providing stakeholders with an annual report is a legal requirement. In the United States, there is a more detailed version of the annual report called Form 10-K , which is submitted to the U.S. Securities and Exchange Commission (SEC).

What Is An Annual Report?

An annual report typically contains in-depth information about the organization’s financial and operational status. The report is usually accompanied by visuals, such as charts and graphs, that highlight accomplishments from the previous year as well as forecasts about future performance. The annual report is also an opportunity to tell all stakeholders the story behind the numbers.

Understanding Annual Reports

The main objective of annual reports is to provide transparency to stakeholders so they can make more informed decisions about their investment in the company. In the United States, annual reports became mandatory for public companies after the Wall Street Crash of 1929. A typical annual report will contain:

General Corporate Information

Companies usually provide a snapshot of their business in the annual report, with information such as:

• Number of employees
• Number of offices
• Founding date

Performance Highlights

The annual report is a great opportunity for a company to showcase performance highlights from the previous year, such as revenue growth, new product launches and improvements in operational efficiency.

Financial Statements

The three financial statements—balance sheet, income statement and cash flow statement—are almost always included in the annual report.

Letter to the Shareholders From the CEO

It is common for a company’s CEO to write a letter to their shareholders that outlines achievements and performance from the previous year.

Management Discussion & Analysis (MD&A)

In addition to the CEO, it is also common for annual reports to include a section written by the other C-level executives discussing performance, achievements and potentially plans for the future.

Outlook for Future Years

The annual report usually contains a section about future outlook for the company. This section may include plans for the future, detailed information about strategy, thoughts on position within the company’s respective market and more.

What Key Information Does an Annual Report Contain?

The annual report includes key financial information about a company such as:

• Profits and loss statements
• Information about a company's ability to pay outstanding debts
• The company’s growth over the years
• Retained earnings
• Revenue compared to expenses

Who Uses Annual Reports

Annual reports are most commonly used by:

• Shareholders
• Potential investors

How Do You Write an Annual Report? (Step-by-Step Guide)

Here are the steps for writing an annual report: 1. Write a shareholder letter. 2. Add basic information about your company, such as your industry, market share and revenue. 3. Include income and expense reports that have been audited. 4. Use business intelligence tools to tell the story of your company’s financial health. 5. Provide details about your cash flow. 6. Ensure your financial statements are easy to understand for a non-finance audience by including explanatory notes.

5 Common Pitfalls To Avoid When Writing Your Annual Report

Try to avoid these five common mistakes when writing your annual report: 1. No personality. Don’t just focus on the numbers—this is your chance to tell your company’s story and showcase your culture. 2. Too much information. Instead of overwhelming your readers with content, try to add some focus and precision to your annual report. 3. Leaving readers confused about your company. Don’t assume your stakeholders know the basics about your company. Make sure you clearly communicate what your company does, how it makes money, what its vision is and what their future goals are. 4. Not enough value for stakeholders. Your annual report will be read by investors, potential investors, employees, board members, partners, suppliers and more. Ensure your report has valuable information for all of those audiences. 5. Too difficult to skim. Nobody is going to read a wall of text. Your report needs to be formatted well and contain visuals so stakeholders can easily skim it to get the information they need.

Vena Can Help You Build Annual Reports

If you’re looking for help in building annual reports, here are a few resources to check out:

• Free Excel templates for balance sheets, income statements, board reports and more
• Easy-to-use solution for creating your financial statements and reports

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What is an Annual Report?

Home › Finance › Corporate Finance › What is an Annual Report?

Definition: An annual report is a financial summary of a company’s activities during the year along with management’s analysis of the company’s current financial position and future plans. Annual reports are prepared at the end of the  fiscal year  for external users to gain financial information about the inner workings of the company and what management plans to do in the future.

A typical annual report includes several different sections that help investors and creditors understand the company more than they would by simply looking at a set of  general-purpose financial statements . A standard report includes the following sections:

• Letter to Shareholders
• Financial History and Highlights
• Management Discussion and Analysis
• Management’s Report on Financial Statements and on Internal Controls
• Report of Independent Accountants sometimes called the Auditor’s Report including a section on  internal controls
• Balance Sheet
• Income Statement
• Statement of Stockholders’ Equity
• Cash Flows Statement
• Notes to Financial Statements
• List of Directors and Officers

As you can see, the full report gives external users a much more holistic view of a company’s financial position, market standings, and ability to improve than a simple set of  comparative financial statements .

Although the report is directed at  external users , it’s often used as an advertising and marketing tool to show the public that the company is doing well. Management can showcase new products and innovations as well as discuss new markets that they expect to enter in future periods.

This report is typically issued with graphics, photos, illustrations, graphs, and diagrams. It’s for more attractive than a simple set of financial statements. In a sense, this is the report where management can brag about its accomplishments and entice new investors to join the company. Even though there are marketing-type elements in the report, the actual purpose of it is to convey financial information to the outside users.

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Annual report – definition and meaning

An annual report is a document that public companies issue to provide shareholders with important corporate information. Potential investors, analysts, and financial journalists also read annual reports. In fact, when a major company like Apple Inc. issues its report, a wide range of people examine it.

The majority of jurisdictions instruct companies to prepare and disclose annual reports. Many firms file their annual reports at the company’s registry.

The main aim of the annual report is to provide a summary of how well (or badly) a company has performed over the past 12 months. Additionally, the document provides a glimpse of things to come.

Creating a compelling annual report today is a real art. In fact, some people call it a science. There are even agencies that specialize in preparing annual reports.

Annual report – public companies

In most cases, ** public companies usually have to report at more frequent intervals. However, this also depends on the guidelines of the stock exchange where investors buy and sell the company’s shares.

** You can buy and sell public company shares on a stock exchange , but not the shares of a private company.

An annual report usually begins with an opening letter from the Chief Executive Officer, followed by financial data, results of continuing operations, and information about its market. The report authors also write about products that are in the pipeline, as well as the company’s subsidiary activities.

Additionally, many companies, especially the larger ones, include details on their research and development.

Typically, the cover and first few pages of the report contain graphics, photos, and accompanying narrative. The annual report’s first few pages detail what the company has achieved over the past year.

Comprehensive financial and operational information appears in the latter half of the report.

Every year, companies send their annual reports to shareholders. They send the reports when the companies hold their AGMs to elect directors and discuss strategy. AGM stands for A nnual G eneral M eeting.

According to the dictionary Merriam-Webster , an annual report is:

“A usually lengthy report issued yearly by an organization giving an account of its internal workings and especially its finances.”

The Wall Street Crash

The Wall Street Crash , which occurred in 1929, was the greatest stock market collapse in US history. After the crash, the US Government passed legislation forcing public companies to publish an annual report.

In the US, companies submit a more comprehensive report, a Form 10-K , to the SEC. SEC stands for the S ecurities and E xchange C ommission.

American companies must file the Form 10-K no more than ninety days after the fiscal year. Additionally, public companies must file a Form 10-Q every quarter.

US companies can submit their annual reports electronically via the SEC’s EDGAR database. This database is also a useful tool, especially when you are researching public companies.

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What is an annual report?

Annual reports inform all interested parties about the financial success (or failure) of a public entity, private corporation, non-profit organization, or other business formation.

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What is the purpose of an annual report?

What is included in an annual report, who files the annual report, when should annual reports be filed, do small businesses or llcs need to file an annual report, what is the annual report requirement for large corporations.

An annual report is a document that contains comprehensive financial information about public companies, small and large corporations, non-profit organizations, partnerships, and other businesses. It includes their financial performance and activities over the prior fiscal year.

Some types of businesses must prepare and file an annual report by law with the Secretary of State where the company operates. Other companies prepare annual reports to keep shareholders, employees, and the community informed regarding the company's financial health.

In general, most states require corporations and other businesses with shareholders to file annual reports. If they fail to do so, they may lose their corporate designation and the tax advantages that go with that designation.

Annual reports can also be known as "business annual reports," "statements of information," or "yearly statements."

Beyond the legal requirements, they also:

• Help to attract new investors
• Retain the confidence of current stakeholders
• Provide business analysts and creditors with insight into the company's financial status

Depending on the size of the corporation (500 or more shareholders) and amount of annual profit (at least $10 million or more in assets), and whether it is publicly traded, in addition to filing an annual report, a separate filing with the  U.S. Securities and Exchange Commission  may also be required.

The requirements for filing an annual report vary in each state. In the states that require annual reports to be filed, the Secretary of State (or similar governmental entity) will normally prescribe the filing requirements.

In many instances, for ease of operation, the Secretary of State will forward—via electronic mail or United States mail—the annual report forms to the companies (or to their registered agent) that are expected to file them. The forms are relatively easy to complete and contain the requisite information to be included.

Alternatively, the forms can be located online, downloaded, completed, and filed electronically.

The annual report forms generally require the following information to be included:

• Information regarding the name of the company, business type, and registered agent
• Information concerning corporate officers and directors and the corporation's physical location
• A report from the CEO to update current and potential investors on the company's economic status, key events, activities and achievements, yearly highlights, details regarding new products or services, and future needs, wants, and goals, as well as the desired direction of the company
• The company's financial breakdown (including balance sheet summaries, a cash flow statement, capital investment data, an auditor's report, anticipated revenues, and expenses, changes in equity report, income statement, and other profit and loss details)
• A restatement of the company's core values, mission statement, and future objectives

There are normally annual report fees involved when you file the annual report, including, but not limited to, franchise taxes.

A business entity's size will typically determine whether an in-house staff member will prepare an annual report or if an outside firm will be retained.

Larger organizations often have employees within the company who are designated to complete this essential undertaking.

To the extent your state requires an annual report to be filed, it's always best to timely file required annual reports and financial statements with the Secretary of State, and pay any requisite fees.

A review of a  state-by-state list of the annual report filing deadlines  reveals that the filing date, the type of filing required, and the fees involved vary greatly depending upon the state in which your business was formed or is currently operating.

Be aware that the failure to promptly file the annual report and remit any fees due and owing could result in severe penalties or the complete dissolution of the business.

The annual reporting requirements for a small business or limited liability company (LLC) tend to be less rigorous   than they are for larger corporations. Nevertheless, the majority of states require  small businesses and LLCs  to file some form of report to comply with state regulations and to maintain their  good standing .

Although less comprehensive in size and scope, annual reports for  small businesses and LLCs  serve to generally inform the employees or members about how the company is performing and to share the management's vision for the future.

Depending upon the state in which the LLC is formed and operated, the yearly report may be called an "annual report," a "statement of information," an "annual statement," or something very similar.

Annual reports prepared by larger corporations normally have the most onerous filing requirements. The reports usually begin with a letter from the CEO or the president regaling the history of the company, recapping the previous year's activities, revealing the company's profit and loss outlook, discussing the short- and long-term objectives of the company, and touting the prognosis for future growth and prosperity.

The report may also include a mission statement, the names of the executive officers or board members, and a listing of the services and/or products the company offers .

Although designed to disclose the important aspects of a company's current financial position, an annual report often includes some "style point" elements as well, such as visually appealing graphics, photos and brand storytelling to enhance the company's corporate identity.

If you need assistance completing and filing an annual report, you can seek help from attorneys in your state.

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What is an annual report?

Annual report (definition).

An annual report is a detailed report that shows a company’s operations and financial performance in the preceding 12 months. This information is of interest to shareholders and potential investors.

Publicly traded companies have to produce annual reports as part of their responsibilities to stock market regulators and their shareholders. Companies that aren’t publicly traded may still have to produce annual reports for government regulators and tax offices.

What goes in an annual report?

An annual report for a publicly traded company typically contains highlights of the company’s activities and performance during the previous year, future goals and objectives, a letter to shareholders from the CEO or company president, an auditor’s report, and detailed financial statements. Financial information is often visually presented in graphs and tables. The annual report for a small business will be much more simple.

The financial statements – balance sheet, income statement, and cash flow statement – provide information about the company’s:

• current financial state
• profit or loss in its previous fiscal year
• cash availability to pay its debts as they come due
• earnings retained to grow its operations
• operating ratio (OR) ratio of operational expenses to revenue generated

See related terms

Financial statements

Financial reporting

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annual report

Definition of annual report

Examples of annual report in a sentence.

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'annual report.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

1724, in the meaning defined above

Dictionary Entries Near annual report

annual rent

annual ring

Cite this Entry

“Annual report.” Merriam-Webster.com Dictionary , Merriam-Webster, https://www.merriam-webster.com/dictionary/annual%20report. Accessed 13 May. 2024.

Legal Definition

Legal definition of annual report.

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Annual Report

• Introduction to an Annual Report

An annual report is a document a public corporation is expected to send to shareholders annually to explain its activities and financial conditions. Often the front part of the report includes an impressive mix of illustrations, images, and an accompanying narration, all of which chronicle the activities of the organisation over the last year. The back part of the report includes extensive details on finances and activities.

• What Does an Annual Report Contain?

The aim of the required annual report is to make the business operations of a corporation publicly available over the past year. The report is usually given to shareholders and other interested parties who use it to determine the financial performance of the company.

Usually, the following sections will be included in an annual report:

• General corporate details
• Financial and operating highlights
• Letter to shareholders from the CEO
• Management's discussion and analysis (MD&A)
• The narrative document, charts, and images
• Financial statements, including the balance sheet, cash flow statement, and an income statement
• References to the financial statements
• Auditor's report
• Accounting policies
• Summary of financial data
• How Can an Annual Report Be Used?

The annual report provides details on the financial condition of a company which can be used to measure:

• The capacity of a business to pay its obligations as they occur.
• If a business made a profit or loss in the previous fiscal year.
• A company's growth over a period of years.
• How much earnings a company maintains to increase its profits.
• The proportion of functional expenses to revenue generated.

The annual report also specifies whether the information is consistent with the widely accepted standards of accounting (GAAP). This statement is outlined in the 'Report' section of an auditor as an "unqualified view". Fundamental investors seek to understand the potential course of an organisation by examining the information set out in their annual report.

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Money blog: Gen Z would rather deliver parcels than work in restaurants, Michel Roux Jr claims

A reader seeks help as her employer of 24 years is bringing in a new clock-in system to pay her by the minute. Read this, Michel Roux Jr's full comment and all the latest personal finance and consumer news in the Money blog - and share your own problem or dispute below.

Monday 13 May 2024 12:37, UK

• Gen Z would rather deliver parcels than work in restaurants, Michel Roux Jr claims
• Free childcare applications open for new age band
• Money Problem: My workplace is bringing in new clock-in system to pay us by the minute - is this allowed?

Essential reads

• How to make sure your car passes its MOT
• 'Loud budgeting': The money-saving trend that has nothing to do with giving up your daily coffee
• How to avoid a holiday data roaming charge (while still using the internet)
• Best of the Money blog - an archive

Ask a question or make a comment

A total of 583 skyscrapers are "queuing up in the pipeline" to be built across central London, a development thinktank has said. 

That is more than double the 270 built in the past decade. 

In the eastern borough of Tower Hamlets alone, 71 tall buildings were completed in that time that time, the report by New London Architecture found. 

A further 24 were in the City of London and 27 in Canary Wharf and Isle of Dogs. 

The report said the rapid change has been fuelled by a "burgeoning demand" for office and residential space, overseas investment and a supporting planning environment. 

"Tall buildings have changed the face of London substantially over the last 20 years and will continue to do so - the pipeline that NLA has tracked means there is at least 10 years' supply that has already been defined," Peter Murray, the organisation's co-founder, said. 

"London's population continues to grow, passing the 10 million mark at the end of this decade.

"We'll still need tall buildings; and NLA will continue to keep a close watch on what's going on." 

Restaurants might only be able to open three or four days a week due to staffing problems, Michel Roux Jr has warned. 

Speaking to The Telegraph as he gears up to open his new restaurant Chez Rouz, the Michelin starred chef admitted the industry needs to change to accommodate flexible working hours. 

"Just because I worked 80 hours a week or more doesn't mean the next generation should," he said. 

"Quite the contrary. That is something that we have to address in our industry."

But, he warned that the move will come at a cost... 

"It will mean ultimately that going out is going to be more expensive, and that maybe your favourite restaurant is no longer open seven days a week - it's only open three or four days a week," he said. 

The industry is known for its long, unsociable working hours, and Roux Jr explained that the real issue hit after the pandemic, with people no longer wanting to work weekends. 

"People don't want to work unsociable hours and would rather work delivering parcels as and when they want to. It's as simple as that," he added. 

Earlier this year, Roux Jr said goodbye to his famous restaurant Le Gavroche in London. 

It had been opened by his father Albert Roux and uncle Michel Roux in 1967. 

Now, he said it's "brave" to open a new restaurant, with the market "very, very tough". 

"I really feel for anyone that is brave enough to open up a restaurant now. It's incredibly difficult," he added. 

Chez Rouz at The Langham in Marylebone, central London, is due to open on 22 May. 

By James Sillars , business news reporter

A pause for breath on the FTSE 100 after a 3% gain over the course of past week that took the index to a fresh record closing high.

The rally of recent weeks - significant for London's standing and pension pots alike - has been broad based and reflects several factors.

A major driver has been sterling's weakness versus the US dollar.

The US currency has been strong as the Federal Reserve, its central bank, has hinted it will be some time yet before it begins to cut interest rates.

Language out of the Bank of England last week sparked a flurry of bets that UK rates could be cut as early as next month.

A weaker pound boosts dollar-earning constituents on the FTSE 100 because they get more for their money when dollars are converted to pounds.

Also at play is the view that UK stocks represent good value, as they are cheaper compared to many of their international peers.

A few moments ago, the FTSE 100 was trading 6 points lower at 8,423.

A major talking point is the possibility of the Chinese fast fashion firm Shein listing in London.

According to Reuters, the company has shifted its focus to the UK after receiving a lukewarm reception in the United States.

The news agency, citing two sources, reported that Shein was stepping up its preparations for an initial public offering in London that would be expected to be one of the biggest carried out globally this year.

By Emily Mee , Money team

No one likes the date in their calendar when their MOT rolls around. 

But to make things a little less stressful, consumer expert Scott Dixon - known as The Complaints Resolver - has given us some tips on what to look out for to help your vehicle pass with flying colours. 

Some of the most common failures are faulty steering, brakes, suspension, worn or damaged tyres, cracked windscreens and faulty lights. 

Mr Dixon recommends you get your car serviced a couple of weeks before your MOT, in case there are any complex or costly issues. 

This will give you time to get them fixed and get your car through first time without any advisories. 

Aside from taking your car for a service, there are also some easy checks you can run yourself... 

Listen for unusual clunks while you're driving - this could be a sign of a damaged suspension. 

You could also check by pushing the car down on each corner. It should return to normal without bouncing a few times. 

Another option is to look with a torch under the wheel arch, as this should reveal any obvious defects. 

Blown bulbs are a common MOT failure, but they're cheap to fix. 

Walk around your car and check all the bulbs are working - this includes the headlights, sidelights, brake lights, indicators and the number plate bulb.

Mr Dixon says it's "not an easy job" to change the lightbulbs yourself on most modern cars, as the MOT will also check the positioning of the light. Therefore he recommends getting this done professionally. 

Squealing or grinding noises may be a sign your brake pads need replacing. 

You should also check whether your car stops in a straight line, or whether it pulls in different directions. 

Don't forget about the handbrake, too. Test it out on a slope and see if it securely holds the car. If it doesn't, you should get it adjusted. 

It's easy to check if your wipers work okay, but you should also make sure to inspect the blades for tears and rips. 

They should be able to clean the windows with no smears. 

Mr Dixon says you don't need to pay Halfords to change your wiper blade as you can "do it yourself in seconds". All you need to do is look for a YouTube tutorial. 

He also recommends buying the Bosch wiper blades, as he says these are good quality and will also be a sign you've looked after your car well when you come to sell it. 

One thing to look out for is tread depth. You can do this by looking for the "wear bar" that sits between the tread. 

If it's close to 1.6mm and is low, you should get the tyre replaced so it's not flagged as an advisory. 

Also check for perished tyre walls, which can happen when a vehicle is standing for any length of time. 

Uneven tyre wear is another potential issue, and if there are signs of this you should get the tyre replaced and tracking and suspension checked. 

These must be in good condition and working order, with no tears or knots. 

Registration plates

Your number plates should be clean and visible with a working light bulb at the rear. You may need to give them a wipe and replace the bulb if necessary. 

This should be in good condition, without damage such as loose bumpers or sharp edges. 

Mr Dixon advises against using automatic car washes during your car's lifetime, saying they "wreck your car". 

"It's not just your paintwork but they can also damage the wiper blades and the bodywork," he says. 

Check for warning lights

You'll need to take your vehicle to a trusted garage or mechanic for this. 

Exhaust emissions

Some diesel vehicles can fail their MOTs based on emissions. To avoid this, you can buy a fuel treatment pack and take your car for a good run to clear the fuel lines and tank.

Driving for at least 30 to 50 minutes at a sustained speed on a motorway or A-road should help to clear the filter. 

You should make sure the driver's view of the road isn't obstructed, so check for stone chips at eye level and remove any obstructions such as air fresheners and mobile phone cradles. 

What else should you think about? 

Make sure your car is clean beforehand, as a tester can refuse to do your MOT if the vehicle is filthy and full of rubbish. 

Giving your car a clean can also give you a chance to inspect it, Mr Dixon says. 

Another thing to do is to check last year's MOT for any advisories that might crop up this time. 

These potential issues will still be there - so it's best not to ignore them. 

You can check your vehicle's MOT history using  https://car-check.co.uk . 

Every Monday we get an expert to answer your money problems or consumer disputes. Find out how to submit yours at the bottom of this post. Today's question is...

I have worked at a bank for 24 years - the facilities are outsourced. This new company is bringing in a system where the staff have to click in and out and are then paid by the minute? Is this allowed? Amber

Ian Jones, director and principal solicitor at Spencer Shaw Solicitors, has picked this one up...

Your rights depend on your contract and what it says about payment. Does it specify an annual salary, or payment by time? Does it allow for changes to how payment is calculated?

If the contract does not allow for this type of payment, your employer may be trying to vary the contract of employment unlawfully.

If you're directly employed by the bank, and your pay arrangements are changing because of a new monitoring system, this would be an internal contract variation. If you work in the facilities department and the new contractor is taking over as your employer, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) 2006 may apply. 

In this case, your current terms, conditions and previous service will transfer to the new employer.

TUPE may make the issue sound more complicated but, in practice, either way the changes will be valid only if the employee agrees to them.

If you have not agreed to the change, then this could be a breach of contract. This could give rise to a successful claim in the civil courts or the employment tribunal. 

If the breach is serious (for example, you're paid less than agreed in the original contract) and you resign in response, this could amount to constructive dismissal for which a claim can be made in the employment tribunal. 

It would be sensible to get the contract reviewed by a solicitor for advice. But act swiftly - if you continue working for the employer, you are effectively waiving the breach and accepting the change to your contract.

To make it possible to pay by the minute, employees may be monitored while at work. When collecting and processing data and using it to make a decision, the employer must comply with data protection laws. If not, the employee could be entitled to compensation, depending on the breach, or the employer could be at risk of a sanction by the regulator the Information Commissioner's Office.

This feature is not intended as financial advice - the aim is to give an overview of the things you should think about.  Submit your dilemma or consumer dispute via:

• The form above - make sure you leave a phone number or email address
• Email [email protected] with the subject line "Money blog"
• WhatsApp us  here .

Please make sure you leave your contact details as we cannot follow up consumer disputes without them.

We're back for another week of consumer news, personal finance tips and all the latest on the economy.

This is how the week in the Money blog is shaping up...

Today : Every week we ask industry experts to answer your Money Problems . Today, a reader's employer is bringing in a new clock-in system to pay workers by the minute - but is this allowed?

Tuesday : This week's  Basically...  explains everything you need to know about the PIP. 

Wednesday : We speak to one of London's top chefs for his Cheap Eats at home and in the capital.

Thursday : Savings Champion  founder Anna Bowes will be back with her weekly insight into the savings market.

Friday : We'll have everything you need to know about the mortgage market this week with the guys from Moneyfacts.

Running every weekday, Money features a morning markets round-up from the  Sky News business team  and regular updates and analysis from our business, City and economic correspondents, editors and presenters -  Ed Conway ,  Mark Kleinman ,  Ian King ,  Paul Kelso  and  Adele Robinson .

You'll also be able to stream  Business Live with Ian King on weekdays at 11.30am and 4.30pm.

Bookmark  news.sky.com/money  and check back from 8am, and through the day, each weekday.

The Money team is Emily Mee, Bhvishya Patel, Jess Sharp, Katie Williams, Brad Young and Ollie Cooper, with sub-editing by Isobel Souster. The blog is edited by Jimmy Rice.

By Jess Sharp , Money team 

Money saving trends are constantly popping up on social media - but one in particular has been gaining huge amounts of attention.

Created accidentally by a comedian, loud budgeting is breaking down the taboo of speaking about money.

The idea is based on being firmer/more vocal about your financial boundaries in social situations and setting out what you are happy to spend your money on, instead of "Keeping up with the Joneses". 

On TikTok alone, videos published under the hashtag #loudbudgeting have garnered more than 30 million views - and that figure is continuing to climb. 

We spoke to Lukas Battle - the 26-year-old who unintentionally created the trend as part of a comedy sketch. 

Based in New York, he came up with the term in a skit about the "quiet luxury" hype, which had spread online in 2023 inspired by shows like Succession. 

The term was used for humble bragging about your wealth with expensive items that were subtle in their design - for example, Gwyneth Paltrow's  £3,900 moss green wool coat from The Row, which she wore during her ski resort trial...

"I was never a big fan of the quiet luxury trend, so I just kind of switched the words and wrote 'loud budgeting is in'. I'm tired of spending money and I don't want to pretend to be rich," Lukas said. 

"That's how it started and then the TikTok comments were just obsessed with that original idea." 

This was the first time he mentioned it...

Lukas explained that it wasn't about "being poor" but about not being afraid of sharing your financial limits and "what's profitable for you personally". 

"It's not 'skip a coffee a day and you'll become a millionaire'."

While talking money has been seen as rude or taboo, he said it's something his generation is more comfortable doing. 

"I've seen more debate around the topic and I think people are really intrigued and attracted by the idea," he said. 

"It's just focusing your spending and time on things you enjoy and cutting out the things you might feel pressured to spend your money on."  

He has incorporated loud budgeting into his own life, telling his friends "it's free to go outside" and opting for cheaper dinner alternatives.

"Having the terminology and knowing it's a trend helps people understand it and there's no awkward conversation around it," he said. 

The trend has been a big hit with so-called American "finfluencers", or "financial influencers", but people in the UK have started practising it as well. 

Mia Westrap has taken up loud budgeting by embarking on a no-buy year and sharing her finances with her 11.3k TikTok followers. 

Earning roughly £2,100 a month, she spends around £1,200 on essentials, like rent, petrol and car insurance, but limits what else she can purchase. 

Clothes, fizzy drinks, beauty treatments, makeup, dinners out and train tickets are just some things on her "red list". 

The 26-year-old PHD student first came across the idea back in 2017, but decided to take up the challenge this year after realising she was living "pay check to pay check". 

She said her "biggest fear" in the beginning was that her friends wouldn't understand what she was doing, but she found loud budgeting helped. 

"I'm still trying my best to just go along with what everyone wants to do but I just won't spend money while we do it and my friends don't mind that, we don't make a big deal out of it," she said. 

So far, she has been able to save £1,700, and she said talking openly about her money has been "really helpful". 

"There's no way I could have got this far if I wasn't baring my soul to the internet about the money I have spent. It has been a really motivating factor."

Financial expert John Webb said loud budgeting has the ability to help many "feel empowered" and create a "more realistic" relationship with money.

"This is helping to normalise having open and honest conversations about finances," the consumer affair manager at Experien said. 

"It can also reduce the anxiety some might have by keeping their financial worries to themselves." 

However, he warned it's important to be cautious and to take the reality of life into consideration. 

"It could cause troubles within friendship groups if they're not on the same page as you or have different financial goals," he said.

"This challenge isn't meant to stop you from having fun, but it is designed to help people become more conscious and intentional when it comes to money, and reduce the stigma around talking about it." 

Rightmove's keyword tool shows Victorian-era houses are the most commonly searched period properties, with people drawn to their ornate designs and features.

Georgian and Edwardian-style are second and third respectively, followed by Tudor properties. Regency ranked in fifth place.

Rightmove property expert Tim Bannister said: "Home hunters continue to be captivated by the character and charm of properties that we see in period dramas.

"Victorian homes remain particularly popular, characterised by their historic charm, solid construction, and spacious interiors. You'll often find Victorian houses in some of the most desirable locations which include convenient access to schools and transport links."

Throughout the week Money blog readers have shared their thoughts on the stories we've been covering, with the most correspondence coming in on...

• A hotly contested debate on the best brand of tea
• Downsizing homes
• The cost of Michelin-starred food

Job interview mistakes

On Wednesday we reported on a new £12m ad from PG Tips in response to it falling behind rivals such as Twinings, Yorkshire Tea and Tetley....

We had lots of comments like this...

How on earth was the PG Tips advert so expensive? I prefer Tetley tea, PG Tips is never strong enough flavour for me. Shellyleppard

The reason for the sales drop with PG Tips could be because they increased the price and reduced the quantity of bags from 240 to 180 - it's obvious. Royston

And then this question which we've tried to answer below...

Why have PG Tips changed from Pyramid shape tea bags, to a square? Sam

Last year PG Tips said it was changing to a square bag that left more room for leaves to infuse, as the bags wouldn't fold over themselves.

We reported on data showing how downsizing could save you money for retirement - more than £400,000, in some regions, by swapping four beds for two.

Some of our readers shared their experiences...

We are downsizing and moving South so it's costing us £100k extra for a smaller place, all money from retirement fund. AlanNorth

Interesting read about downsizing for retirement. We recently did this to have the means to retire early at 52. However, we bought a house in the south of France for the price of a flat in our town in West Sussex. Now living the dream! OliSarah

How much should we pay for food?

Executive chef at London's two-Michelin-starred Ikoyi, Jeremy Chan, raised eyebrows when he suggested to the Money blog that Britons don't pay enough for restaurant food.

Ikoyi, the 35th best restaurant in the world, charges £320 for its tasting menu. 

"I don't think people pay enough money for food, I think we charge too little, [but] we want to always be accessible to as many people as possible, we're always trying our best to do that," he said, in a piece about his restaurant's tie up with Uber Eats... 

We had this in... 

Are they serious? That is two weeks' worth of food shopping for me, if the rich can afford this "tasting menu" then they need to be taxed even more by the government, it's just crazy! Steve T

If the rate of pay is proportionate to the vastly overpriced costs of the double Michelin star menu, I would gladly peel quail eggs for four-hour stints over continuing to be abused as a UK supply teacher. AndrewWard

Does this two-star Michelin star chef live in the real world? Who gives a toss if he stands and peels his quails eggs for four hours, and he can get the best turbot from the fishmonger fresh on a daily basis? It doesn't justify the outrageous price he is charging for his tasting menu. Topaztraveller

Chefs do make me laugh, a steak is just a steak, they don't make the meat! They just cook it like the rest of us, but we eat out because we can't be bothered cooking! StevieGrah

Finally, many of you reacted to this feature on common mistakes in job interviews...

Those 10 biggest mistakes people make in interviews is the dumbest thing I've ever read. They expect all that and they'll be offering a £25k a year job. Why wouldn't I want to know about benefits and basic sick pay? And also a limp handshake? How's that relevant to how you work? Jre90

Others brought their own tips...

Whenever I go for an interview I stick to three points: 1. Be yourself 2. Own the interview 3. Wear the clothes that match the job you are applying Kevin James Blakey

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