How to Read a Company Report

No matter you are joining a company as an employee or are going to invest in its new business venture, you should check company’s status before making any decision. The best way to get the maximum information is to review its annual report.

Apparently, it looks quite easy to read a company’s report but it is not all about leafing through pages. You will have to put some extra attention to determine exactly how much this company is successful and what its prospects are in the future.

By following some simple tips, you can make this reviewing process a lot easier.


  • 1

    Familiarise yourself with the terminologies:

    You must have a proper background to review and evaluate a company’s report. If you do not have any prior experience, then equip yourself with apt knowledge. You may ask someone to help or browse internet to familiarise yourself with all the terminologies.

  • 2

    Start with CEO’s message:

    Now, when you are fully prepared to review the report, you should start by reading CEO’s message. Though, this note is just a formality as most of the time the communication officers of companies draft these letters. However, you must not ignore this as it is an official statement of the CEO about the financial state of the company. By reading this note, you will be able to check the company’s performance in a specific time period.

  • 3

    Check the objectives and goals:

    The most common mistake people make is to miss the portion containing company’s objectives and future plans. There is no doubt that this portion is mostly filled with just claims and declarations but still you will be able to know about the company’s psyche and approach. By reading this portion, you will also be able to know about the recent developments and future trends.

  • 4

    Read the financial review:

    Your next step will be to go through the financial review. This is the most important portion of a report as it comprises complete information about the profit and loss. Moreover, the footnotes and income statements will be really helpful in evaluating that company’s financial status.

  • 5

    Compare the report:

    You must know that only reading the report is not enough. You must compare it with other company’s reports as this will enable you to check its authenticity. Moreover, you will be able to check the growth rate of that company as compared to its competitors in the market.

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