Preparing Financial Reports

Designing and writing an annual report or financial report is one of the best ways for communication professionals. It is a legal document. It is not just a vision, a goal, and the business strategy is the substance of the annual report. It also contains the annual financial statements and should provide clear information on the mandatory section of the financial statements and balance sheet for the previous financial year. And it must be officially introduced.

Alternatively, the annual report is the calling card of a company. In the voluntary section, the company can earn points through touching articles, photos, and success stories. In addition, it should do justice to the stakeholders – from staff to investors, media professionals, and competitors. Also: It is not uncommon for annual reports to be produced under significant time pressures. This means that writers face great challenges when it comes to designing and writing annual reports in an efficient manner. There are multiple finance assignment writing services with professionals that work on corporate annual reports as well. They can help you with providing you with a financial report as per your requirement and direction.

The Meaning and Purpose of an Annual Report

The task of the annual report is to document the activities of a company in a financial year in a comprehensive manner. This is intended to inform stakeholders such as shareholders, employees, and other interested parties about the company’s financial situation and business activities.

The Structure of an Annual Report

While the annual reports of companies hardly differed from one another in the past, they are becoming more and more individual today. The structure of an annual report looks the same for most companies.

The table of contents consists essentially of these three main parts:

Management Report

The management report provides information on topics such as strategy, goals, developments, and risks.

Corporate Governance

The corporate governance part provides information on the board of directors, the shareholders, and the auditors as well as other information about the company.

Financial Report

The financial report presents the financial background and its background. These include the balance sheet, income statement, cash flow statement, appendix, and audit obligation.

There are legally prescribed components of an annual report, but the addition of voluntary content is increasing. Because many target groups want to see more than bare numbers. The annual report is a good opportunity to show the company from a different perspective.

Mandatory Content of an Annual Report

The statutory contents of an annual report are the annual financial statements and the management report. The management report only needs to be prepared if the company is obliged to carry out a regular audit. Certain corporate governance information must also be disclosed to shareholders and investors in the interests of transparency.

Financial Report / Annual Accounts

The financial report – also known as the annual financial statement – is part of an annual report that is characterized by figures. The annual financial statements present the financial results for a financial year, taking account of the accounting regulations. It typically consists of the income statement, balance sheet, and notes. In the case of companies with an audit obligation, the cash flow statement is also added.

Balance Sheet

The balance sheet is suitable for getting a quick overview of a company’s financial position. More specifically, the balance sheet is a comparison of a company’s assets and liabilities.

The assets include fixed assets, current assets, and prepaid expenses.

The liabilities are referred to as liabilities. In turn, they are formed from equity, provisions, liabilities, and also accounting items.

The balance sheet is a snapshot because it only reflects the current situation on the balance sheet date.

Income Statement

The income statement, also known as the profit and loss account, provides information about a company’s profits and losses during the year.

In the income statement, all income is compared with all expenses for a financial year. This can be used to determine whether the company has made a profit or a loss.

Unlike the balance sheet, the income statement takes into account the expenses and income of the entire financial year.

Cash Flow Statement

The cash flow statement provides information about the inflow and outflow of money that is generated by operational, investment, and financial activities. It also includes everyday activities such as inventory purchases and sales. The cash flow statement only needs to be presented by companies with a regular audit obligation.

Consolidated Financial Statements

In the case of companies that consist of several companies, the consolidated financial statements must also be prepared. This is nothing more than the summary of the individual annual financial statements in the form of a consolidated balance sheet or income statement. As if they were the annual accounts of a single company.

Appendix to The Annual Financial Statements

The notes to the annual financial statements contain further information on accounting principles, explanations, or explanations on the balance sheet and income statement. This additional information is required by law and is therefore also a compulsory part of the annual report.

Certificate of The Annual Audit

When preparing annual financial statements, the company is obliged to subject them to an independent audit. The so-called annual audit ensures that the legal requirements and the principles of proper bookkeeping have been complied with. This examination is confirmed in the form of attestation and integrated into the annual report.

Corporate Governance

Corporate governance means principles of corporate management. And this part of the annual report is precisely about these principles.

The goal of corporate governance is transparency towards stakeholders and a balanced relationship between management and control.

In recent years, corporate governance has become more and more important because investors no longer just look at the company’s figures when making investment decisions.

The corporate governance part of the annual report typically provides information on the following topics:

  • Company structure/group structure
  • Auditor
  • Board of Directors
  • Information policy
  • Allowances
  • Capital structure
  • Participation rights
  • Management
  • Change of control and defense measures

Management Report

The management report serves as a supplement to the annual financial statements and provides insights into areas that are not covered by them. In the form of detailed reports, it provides information on the course of the financial year and its milestones and shows the current state of a company’s economic situation.

the following topics must be reported:

  • the number of full-time positions on an annual average;
  • the implementation of a risk assessment;
  • the order and order situation;
  • the research and development activity;
  • extraordinary events;
  • the prospects.

In addition to the content, the structure of an annual report also plays an important role. It ensures that the content is arranged in such a way that the reader is guided through the publication. If you need help with the structure of the report you can reach out to finance assignment writing help services. The experts can share annual reports with you that you can use as inspiration.

The Most Important Components of an Annual Report

It is not easy to say which components of an annual report are the most important. First and foremost, it depends on the needs and interests of a company’s target groups.

Most companies tend to focus on the content required by law. But because the annual report is much more than the announcement of business results, this strategy can certainly be questioned.

Ultimately, additional content such as the sustainability report is becoming increasingly important. The annual report should therefore always be viewed as a whole. Because only he can convince with his overall appearance, he is good as an image-bearer of a company.

Frequently Asked Questions

Are our annual report translations available?

If your annual report comes in a few languages, you should allow enough time for translation. Translators need to be familiar with your vocabulary and your writing style so that you can deliver good text. Changes in the structure are often required in multilingual translations. So you should consider these additional workloads and costs when planning.

What is a letter to shareholders in an annual report?

The letter to shareholders receives a lot of attention and is, therefore, one of the most important components of an annual report. Not only because of its prominent placement on the first pages but because the CEO or the Chairman of the Board of Directors addresses his word directly to the reader.

Does an annual report contain a segment report?

The segment reporting presents individual, selected sub-areas of a company. The detailed examination of different departments allows differentiated statements, for example on possible risks or opportunities.

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