An Overview of the Nine Possible Sections in Annual Reports
How you read an annual report depends upon your purpose. As an investor, your purpose may be to assess profitability, survivability, growth, stability, dividends, potential problems, risks or other factors which may affect your investment in that company. The annual report provides a convenient way to monitor the progress of a company. If you own shares in the company you should receive a copy of their annual report in the mail from your broker; if you don't, you can request one or view it online at

Annual reports are a corporate "work of art" and should not be read like a normal book.
There is no need to read the report cover to cover. The first pages are a colorful, non-technical overview of the company's objectives and how well it's meeting them. This should be taken with a grain of salt, because it's marketing literature from the company, designed to put their best foot forward. The pages in the back are for number-crunching and heavy-duty research. Reading annual reports together year to year creates a kind of timeline for the company. You can learn a lot by reading about how the company changed their business model or carried out their desired plans from one year to the next.

There are nine sections in most annual reports. Not all reports will have all the sections or the same type and amount of information. Here are the sections, what you'll find in each, and questions you should ask yourself:
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Copyrighted 2015. Content published with author's permission.

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