Take a good look at an annual report sample. It holds key information about a company's financial history and potential profitability, all things you need to consider before making an investment. But keep in mind that some of the information given is mandatory and some information is made public voluntarily by the company.

Annual reports should be reviewed each year to analyze the company's revenues and potential earnings for its shareholders. An annual report can also clue you in to the company's future plans as far as capital investment, new acquisitions, technology and other upgrades, which is information that can impact your earnings.

Consider the following information when working with annual reports:

1. Analyze the section of the company annual report for updated profits and loss for the year.

2. Annual business reports include a letter from the company's CEO. How does the letter compare to the financial data in the rest of the report? Does it correctly reflect the company's status?

3. It's important to understand the company's financial trends. Annual financial reports from the past three to five years can help you connect the dots.

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Get tips on how to read and understand an annual financial report

An annual report can be an important tool for any investor and it is your right as a shareholder to receive that public information. However, if you can't fully understand the data, the report won't do you much good. Most companies are striving to write their annual reports in a more straightforward manner to improve communications with their shareholders.

I recommend: Read more on how to read an annual report and other general items to consider from Annual Reports Library and Money Chimp.

Read online information from detailed business reports websites

Much information can be gleaned from online sources about the companies you are invested in. Not only can the company itself send you reports and other information on a timely basis, but other services can also give you access to financial data online.

I recommend: Check out all the information you can get online via InvestorsHub.com, which includes even historical financial data as well. Also access electronic reports via Investor Relations Information Network.

Request a mailed hard copy annual report

It's a good idea to keep a hard copy of annual reports in an investment file that you can access over time. That information may be harder to access online as time passes. A hard copy may also come in handy when you're comparing annual reports side by side.

I recommend: The Public Register's Annual Report Service and The Wall Street Journal Online both offer free reports that will be processed and shipped the next day, guaranteed.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Utilize other information besides the corporate annual report for investment decisions. Successful investors also make sure to read analyst reports and use investor advisory services.

A well written company annual report should meet the expectations of the intended reader. If it's aimed at Investors it should show business profitability, stability growth and any problems that could directly affect investments. Your annual report is a basic summary detailing your company's operations.

Some companies have chosen to abandon annual reports. But they can still be an important part of your business. Today annual reports need to be approached in an innovative way. Create an annual report that's easy to read. It should provide clear information about the technical and strategic content that is of interest. To accomplish this, it is important to:

1. Chose a qualified staff of employees for the project
2. Meet the financial, strategic and legal requirements of the report.
3. Consider any marketing aspects of the annual report.

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Choose the right team members

You need to select the right team members to produce a quality annual report. Ideally the project team should consist of representative for the investors as well as legal, accounting and marketing representatives. The coordinator should remain in constant contact with the company's key decision makers.

I recommend: Introduce the writers of your annual financial reports to an online course in creating reports like PTI International to brush up on important basics, and to access an annual report sample.

Use the Internet

Customize your annual report and make it available online. You can format it as a PDF, an interactive presentation or use online information detailed business reports websites. Before you do either, make sure you know which would be more appealing to your audience.

I recommend: You can upload your completed company annual report to online information detailed business reports websites like IRIN Annual Report Resource Center.

Create two separate versions of your annual report.

One version will be an annual financial report, the other report will eliminate all of the financial information ,and you are left with a pretty powerful marketing tool for your business.

I recommend: Consult with a successful marketing firm like Cyndy Falgout Marketing and Communications to hep you create a powerful, engaging annual report of company marketing strategies.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider outsourcing for some of your needs including printing design, and even freelance writing. Make sure that the individuals or firm you choose specializes in creating annual reports. You can provide an annual report sample to help them follow the style of your organization's annual report of company operations. They are very complicated documents.

All publicly traded companies are required to produce an annual report each year to update stockholders on the financial status of the organizations. Many registered nonprofits also produce them to update their donors on their progress. These documents, which often take the form of a booklet or brochure, are often the most important that a company puts out. Some people even peruse them before deciding to buy stock or send money.

As such, the management of an organization should take great care in creating the annual report of the company. Extensive research is required to create one properly. Three things it is wise to do are:

1. Review existing annual reports to see what materials are required, especially those mandated by the Securities and Exchange Commission.

2. Learn more about Generally Accepted Accounting Principles and how they apply to annual reports.

3. Get expert marketing advice to present the report well and try to encourage widespread readership.

Action Steps
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Look at already published annual financial reports to review the format and required materials

Even if your company is a small one, it is not wise to just 'wing it' when it comes to creating your annual report. The first step in annual reports education and training is looking at an annual report sample. This will help you learn the proper form your report should take. A comprehensive financial report will contain a lot more information than just the three items mentioned above.

I recommend: If your company is a nonprofit, check out Nonprofit Annual Reports for dozens of reports that you can model yours after. If, instead, you have a public company, visit AnnualReports. Print out some of the reports and share them with other managers. Discuss what you like and dislike about each sample.

Take an accounting class so you're familiar with annual report requirements

One of the things many people find confusing when they go to write their annual reports is all of the financial jargon and numbers that are required. It helps if the person in charge of the company's books has been keeping stock of finances all year, but some additional education may be in order.

I recommend: Find a course in corporate accounting at your local community college. Even if the class doesn't focus specifically on annual reports you can learn the necessary accounting terms. If your company is a nonprofit, consider taking the ecourse on nonprofit annual reports offered through Non Profit Marketing Guide.

Learn how to present your company annual report in the best light

Managers dread putting together annual reports when their companies have had a bad year. However, there are ways to write honest reports while still making them sound upbeat. Even if your year was wonderful, if it is dry few people will read it. In recent years, companies have started garnering more interest and saving some cash by creating online or video annual reports.

I recommend: Read the article on The Sideroad about how to make your annual financial report more engaging for the reader by writing it in more of a narrative format. If you can, attend the ICR Xchange annual conference to learn more about catering online and video reports to investors. If you are unable to do so, view the video annual reports on the ITWeb-Productions' website.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider hiring a marketing agency to help you with your corporate annual report of company progress. Hiring an experienced agency will make the process easier and take some of the burden off of your shoulders.
• •  Have an accountant or lawyer peruse your annual business reports before you distribute hard copy annual report packages. He or she could catch any errors you may have overlooked.

An annual report is a mandatory document the government requires of all public companies. In essence, an annual report is a culmination of business figures for the year past, including financial results, competitive accomplishments and board member information. Annual reports are sent to shareholders, the public and the government.

The requirements of annual reporting are specific. To avoid any penalties associated to failing to comply, it is necessary to become savvy in this area of reporting. By learning annual reports key terms, you can rest assured that you have fulfilled your obligations as a business owner.

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Security and Exchange Commission (SEC)

A federal agency that regulates annual reporting to ensure full disclosure for the protection of company shareholders. The SEC can penalize any company that doesn't comply with its requirements.

I recommend: The Security and Exchange Commission further explains the laws that define its role in regulating the communication requirements for business financials and operations.

Annual reporting requirements

Refers to the data that is expected in any annual report. It is common to offer information above and beyond the requirements as specified by the SEC.

I recommend: Zpub features a tips section that lists all the information that should be included in an annual report.

EDGAR, or the Electronic Data Gathering, Analysis, and Retrieval system

An electronic system was implemented to help companies set up and submit the required financial and operations information. The objective of this tool is to support a fair reporting method that offers all the necessary information to satisfy shareholders, the public and the government.

I recommend: EDGAR Filing Agent features an extensive FAQ section on EDGAR, including ways to incorporate your annual report, and filing deadlines.

Shareholders

People who own shares of a company and are, as such, the collective owners of a company. Shareholders have certain voting and decision making rights within the corporate structure.

I recommend: 'Lectric Law Library offers an extensive discussion on the rights of shareholders, including applicable federal and state laws.

Cash Flow Statement (CFS)

An explanation of how money comes into a company and how it is being spent. The CFS is one of the requirements of an annual report.

I recommend: AccountingCoach offers a detailed explanation on the fundamentals of a cash flow statement, including information about how cash flows are used.

Balance Sheet

Data that reflects fluctuations in a company's financial worth. Outside auditors must be commissioned to review this information.

I recommend: Investopedia explains, in detail, the components of a balance sheets, as well as how they work.