LAP: QS-039

Objectives Explain the purpose of an annual report. Describe the components of an annual report.

Explain the purpose of an annual report. Objective

SEC requires a yearly financial overview.SEC requires a yearly financial overview. Companies Tell Their Story Most detailed version is Form 10-K.Most detailed version is Form 10-K. User-friendly annual report often availableUser-friendly annual report often available

Within 90 days of fiscal year endWithin 90 days of fiscal year end SEC adopting an accelerated systemSEC adopting an accelerated system Investors will get information more quickly.Investors will get information more quickly. Large companies will have to file within 60 days.Large companies will have to file within 60 days. When Is It Filed?

Board of DirectorsBoard of Directors  Elected by shareholders  Directors act in shareholders’ best interest  Determine dividend policy  Serve on important committees (audit and compensation) Two-Level Management Structure

Board of DirectorsBoard of Directors  Two kinds: inside and outside  Inside: employees or major stockholders  Outside: independent, not associated with company  50% of board must be independent

Two-Level Management Structure Corporate OfficersCorporate Officers  Responsible for: Day-to-day operations Day-to-day operations Making the company profitable Making the company profitable

Two-Level Management Structure Chief Executive Officer (CEO)Chief Executive Officer (CEO)  President Chief Operations Officer (COO)Chief Operations Officer (COO)  Senior Vice President Chief Financial Officer (CFO)Chief Financial Officer (CFO)

Describe the components of an annual report. Objective

Letter to ShareholdersLetter to Shareholders Annual HighlightsAnnual Highlights Financial HighlightsFinancial Highlights Annual Report Contents

Management’s Discussion and Analysis (MD&A)Management’s Discussion and Analysis (MD&A) Financial StatementsFinancial Statements Notes to the Financial StatementsNotes to the Financial Statements Annual Report Contents

Report of Management on the Financial StatementsReport of Management on the Financial Statements Report of the Independent AuditorReport of the Independent Auditor “Back Cover” Information“Back Cover” Information Annual Report Contents

“A Plain English Handbook”“A Plain English Handbook” Readability a factor?Readability a factor? Admired companiesAdmired companies  Easy to read Companies with scandalsCompanies with scandals  Difficult to read Google founders inspired by Warren BuffettGoogle founders inspired by Warren Buffett Say What? Quick Case

MarkED Acknowledgments Original Developers Christopher C. Burke and Janet Coulon, MarkED Version 1.0 Copyright © 2007 MarkED Resource Center

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