Most reports fall somewhere in between.
It is only natural for any company to trumpet success first and give the bad news later. Some even try to bury bad news in footnotes and gobbledygook language. Here is a simple but not exhaustive set of rules to follow in reading annual reports. They may not convert you into a Wall Street analyst, but will help you obtain far more worthwhile information, knowledge, and insight into your investments. An annual report and financials therein represents a snapshot at a given moment.