Annual report

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Annual report is a comprehensive report of company`s activity during the prior year. Its purpose is to provide users with information on the company's activities and financial performance, such as shareholders and potential investors.

Annual reports - the most popular medium

Annual reports are the most popular medium via which companies share their previous performance, understanding of the external environment, goals, plans for the near and immediate future, and performance expectations. Because annual reports are vehicles for communication with numerous stakeholders (investors, employees, customers, etc.), adequate information results in clarity and information asymmetry. It is also essential that corporate communication is open, straightforward, and simple for all stakeholders to comprehend. In the absence of high-quality, timely, and sufficient information regarding corporate performance and strategies, investor risk rises, which may result in increased capital costs.

References

Corporate Finance Institute. (2022, November 1). Annual Report. Srinivasan, P., Srinivasan, R., & Marques, A. C. (2015). https://doi.org/10.2139/ssrn.2611890 Narrative Analysis of Annual Reports - A Study of Communication Efficiency.] SSRN Electronic Journal.