LAP: QS-039LAP: QS-039

ObjectivesObjectives

Explain the purpose of an annual report.Explain the purpose of an annual report.

Describe the components of an annual Describe the components of an annual report.report.

Explain the purpose of anExplain the purpose of anannual report.annual report.

ObjectiveObjective

• SEC requires a yearly SEC requires a yearly financial overview.financial overview.

Companies Tell Their StoryCompanies Tell Their Story

• Most detailed version is Most detailed version is Form 10-K.Form 10-K.

• User-friendly annual report User-friendly annual report often availableoften available

• Within 90 days of fiscal Within 90 days of fiscal year endyear end

• SEC adopting an SEC adopting an accelerated systemaccelerated system

• Investors will get Investors will get information more quickly.information more quickly.

• Large companies will have Large companies will have to file within 60 days.to file within 60 days.

When Is It Filed?When Is It Filed?

• Board of DirectorsBoard of Directors

Elected by shareholdersElected by shareholders

Directors act in shareholders’ Directors act in shareholders’ best interestbest interest

Determine dividend policyDetermine dividend policy

Serve on important Serve on important committees (audit and committees (audit and compensation)compensation)

Two-Level Management StructureTwo-Level Management Structure

Two-Level Management StructureTwo-Level Management Structure

• Board of DirectorsBoard of Directors

Two kinds: inside and outsideTwo kinds: inside and outside

Inside: employees or major Inside: employees or major stockholdersstockholders

Outside: independent, not Outside: independent, not associated with companyassociated with company

50% of board must be 50% of board must be independentindependent

Two-Level Management StructureTwo-Level Management Structure

• Corporate OfficersCorporate Officers

Responsible for:Responsible for:

Day-to-day operationsDay-to-day operations

Making the company Making the company profitableprofitable

Two-Level Management StructureTwo-Level Management Structure

• Chief Executive Officer (CEO)Chief Executive Officer (CEO)

PresidentPresident

• Chief Operations Officer (COO)Chief Operations Officer (COO)

Senior Vice PresidentSenior Vice President

• Chief Financial Officer (CFO) Chief Financial Officer (CFO)

Describe the components of an Describe the components of an annual report.annual report.

ObjectiveObjective

• Letter to ShareholdersLetter to Shareholders

• Annual HighlightsAnnual Highlights

• Financial HighlightsFinancial Highlights

Annual Report ContentsAnnual Report Contents

• Management’s Management’s Discussion and Discussion and Analysis (MD&A)Analysis (MD&A)

• Financial StatementsFinancial Statements

• Notes to the Financial Notes to the Financial StatementsStatements

Annual Report ContentsAnnual Report Contents

• Report of Management on Report of Management on the Financial Statementsthe Financial Statements

• Report of the Independent Report of the Independent AuditorAuditor

• ““Back Cover” Information Back Cover” Information

Annual Report ContentsAnnual Report Contents

• ““A Plain English Handbook”A Plain English Handbook”

• Readability a factor?Readability a factor?

• Admired companiesAdmired companies

Easy to readEasy to read

• Companies with scandalsCompanies with scandals

Difficult to readDifficult to read

• Google founders inspired by Google founders inspired by Warren BuffettWarren Buffett

Say What?Say What?Quick CaseQuick Case

MarkED

Acknowledgments

Original DevelopersChristopher C. Burke and

Janet Coulon, MarkED

Version 1.0

Copyright © 2007MarkED Resource Center

Copyright:

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