Annual Report

An annual report is a comprehensive document that publicly traded companies are required to produce each year, providing shareholders and regulators with a detailed account of the company's financial performance and operations. The annual report typically includes: the CEO's letter to shareholders, a business overview and strategy discussion, audited financial statements (income statement, balance sheet, cash flow statement), Management Discussion and Analysis (MD&A), notes to the financial statements, the auditor's report, and information about corporate governance. In the United States, the formal regulatory filing is the 10-K submitted to the SEC, which contains more detailed and standardized financial data than the glossy annual report companies produce for shareholders. The 10-K includes sections on business description, risk factors, selected financial data, MD&A, financial statements, and exhibits. For fundamental analysts, the annual report is an essential primary source — the MD&A section provides management's perspective on results, the notes to financials reveal accounting policies and contingencies, and year-over-year comparisons reveal trends. Many companies also publish a separate, more visual annual report for marketing purposes.