Potential investors usually ask a company for a copy of their report before making a decision to buy stock. Although most shareholders do not read the financial review section, many do read the financial highlights. Graphs and charts are an effective way to illustrate growth in the highlights, giving readers a quick understanding without requiring an analysis of the data. The shareholders letter, because it is too often written in passive and verbose language, gets skimmed over by most readers. To insure that the most important messages don't get lost, it's a good idea to use subheads to highlight key information.
Shareholders consider photographs to be the most effective vehicle for telling the company's story.
They admit that once they have looked at the highlights and skimmed the letter, they look at the pictures in the report. Effective use of captions can go a long way toward telling the company's story, by demonstrating the role the subject plays in the grand scheme of the company. The use of descriptive headings and sub-heads in the narrative section of the report will help to communicate key points to those readers who only scan through the report. By incorporating these features in your next annual report, you will enhance your report's readability and maximize its effectiveness as a communications vehicle with both analysts and individual shareholder.