Introduction
This guide will walk you through the basics of how to read an annual report. Knowing how to read the information provided in annual reports may help you become a more informed investor. Even if you have no prior experience in finance or accounting, understanding a few simple concepts and guidelines goes a long way.

This guide is available to help you in two ways. You can read the entire guide here, or read excerpts while exploring the site. Whenever you see an icon in the “Related Links” section of the left column, you can click it to link directly to the guide entry on that section.

Why Companies Publish Annual Reports
An annual report includes information about a company’s performance during the previous year, as well as management’s view of the company’s strategy for the future. It is one of the most important communications that publicly held corporations provide to the investing public.

Companies create and distribute their annual reports in order to:

1. Present an overview of the company, management’s discussion of the company’s recent performance and the company’s plans for the future.

2. Report the company’s financial performance for the most recently completed year and compare it with performance in prior years.

3. Fulfill part of their obligations for public financial reporting mandated by the Securities and Exchange Commission (SEC), the primary securities regulatory body of the United States government.

Why Investors & Analysts Read Annual Reports
Investors and investment analysts read annual reports in order to help determine whether a company might be an attractive investment. Annual reports can contain useful information regarding a company’s corporate mission, business model, quality of leadership, financial performance and strategic direction.

Nonetheless, an annual report is only one of many possible sources of information for making informed investment decisions. Investors and investment analysts should also consider information that puts the annual report within a larger context. Other sources include investment analyst reports, the Securities and Exchange Commission’s EDGAR database of company filings, company press releases, industry association reports, the business press and others.