When analyzing an annual report you should look at the entire document. You should read the financial statements for the overall picture of the company's financial health. Then you should use the front section or narrative of the book to study the company's strategies, products and competitive position. Together, the financials and the narrative will provide shareholders and other interested people with a better understanding of the company's likelihood of success. Remember, annual reports are printed only once each year, usually about three months after the fiscal year ends.
Companies can change significantly after an annual report is printed.
Annual reports are easy to get. If you are a shareholder in a company, you will receive a copy of your company's annual report automatically either directly from the company or from your broker. If you are not a shareholder in the company, you can simply call or write the company's investor relations department and request a copy. You can get the company's address and phone number from several resources, including a phone book, a library, the Internet or the company's previous annual report. You can also ask a broker or financial advisor for a copy of any company's annual report you are thinking about investing in.