ultimate remodeling 8 foot ceiling kitchen remodel elmhurst semi finished basement quality painting and remodeling heritage remodeling hoffman estates .. Chicago Drug testing

How to Read an Annual Report

Every publicly traded company is required by the SEC(Securities and Exchange Commission) to provide annual reports to it's shareholders, and the general public as well. These annual reports contain very important financial information, as well of summaries of the companies progress made by the CEO, board members, etc. I use annual reports to decide whether or not im going to buy stock in that company.

How to obtain an annual report - There are basically two ways to get an annual report from a company. The first way is to call the Investor Relations department of a company and asked to have an annual report be sent to you. They send the annual reports free of charge to you, and it would usually arrive in 4 to 5 business days. These annual reports look like magazines, and are very professionally prepared. Usually if you go to the website of the company you're researching, they will have a "Investor Relations" link, and then you can fill out an online form with your name and address to recieve an annual report.

The second way to get annual reports from a company is to go to The SEC's Website at http://www.sec.gov. If you click on "Search for Company Fillings" located under "Filling and Forms", you'll be taken to a webpage called "Search the EDGAR Database". On that webpage, click on "Companies & Other Filers". Then enter the name of the company you need an annual report form, and then click "Find Companies". Look for a report labeled "10-K". That will be their the companies annual reports. Now the reports on the SEC's website are in no way glamourus! They are just in basic text format, and can be very boring to read. But, they provide the same important information from the company.

Inside of the annual report, you will find many things that are useful in helping you decide whether or not to invest in that company. Here's what you'll find in just about every annual report:

Corporate Profile - This is just a small summary of the basic operations of the company, what the company does, etc.

Letter from the President - This is a letter written by the president or CEO of the company, and most of the time the letters talk about the financial successes of the year. This letter may also mention major contracts or partnerships the company has formed, and give a general analyzation of the companies revenues and sales. Be careful when reading the letter from the President, because the business could be running to the ground, but while reading the letter you may get the immpression that all is well!

Independent Auditors' Report - Before a company can distribute their annual report to the public, the financial information inside of the annual report must be checked for accuary so shareholders are not misled. That's the job of the independent auditor. They auditing firm will search for evidence that supports the financial information in the Income Statement, Balance Sheet, etc., and then will write a letter if all is well.

Income Statement - The income statement in the annual report shows the net income or net loss for that particular year. It also shows net sales, cost of goods sold, and the expenses of a company. Income statements from different years can be compared to see if the company is improving financially. I like to compare income statements from the past 5 years, to see if the net sales and net income of a company is increasing.

Balance Sheet - The balance sheet shows the business' assets, and liabilities. The assets are listed in order of liquidity. The quicker an asset can be converted to cash, the more liquid it is. That is why Cash is at the top of the list of assets, because it is the most liquid asset. Under assets you may see items such as Accounts Recieveable (the amount of money that's owed to the company), Property and Equipment, and Other Invesments. In the list of Liabilities, you'll see items such as Accounts Payable (The amount the company owes to other businesses), Income Taxes Payable, and Long-term Debt.

Cash Flow Statement - The cash flow statement shows how the money the business makes, is moving in the business. The cash flow statement also shows if the business was able to increase their cash on hand during the year or not.

Risks - Usually in the back of the annual report, you'll find the risk that are associated with the business. Reading all the types of things that can affect the business is depressing, especially if you own stock in that company. But, to get a good idea of what can affect a business, reading the risks section of the annual report is the best way to go.

Michael Press is an investor and teenage entrepreneur. He currently owns and operates PassiveIncomeInfo.com, a free website with articles about how to build wealth. He also writes for and distributes the Creating Wealth E-zine.

In The News:

Rebalance And Diversify

The stock market has not been very kind to your... Read More

The Bottom?

Every day I hear someone on CNBC proclaim that "this... Read More

Its Snowing

The Winter Games for the Olympics are coming up soon... Read More

Stock Market Education; Day Trading for Beginnners; How to Pick Stocks

The trading method you employ to approach the stock market... Read More

What To Buy?

Now that you have some money burning a hole in... Read More

Trading Tips No 5: Stock Trading Curve Drawdown and Commitment

All stock trading and investing methods must deal with the... Read More

Peer Groups

Whenever I see mutual fund comparisons in the trade publications... Read More

The 1% Solution

You probably know the story of Sherlock Holmes and the... Read More

Mutual Fund Ball and Chain

The broker told me not to sell because the mutual... Read More

How To Buy And Hold

One of the most believed bits of conventional wisdom from... Read More

Chart Reading

As an investor you will want to check out any... Read More

Index Fund Trading Using Technical Analysis and Swing Trading Strategies

Index Fund Trading can be one of the most profitable...or... Read More

Acapulco - The Stock Market Dives

There is a famous cliff on the ocean in Acapulco... Read More

The Stock Market Investor?s Worst Enemy

Every stock market investor faces one primal enemy. An enemy... Read More

The 401(K): How The Insider Has Stolen Your Retirement!

Mutual funds were moderately successful in creating a presence in... Read More

Stock Market Diversification

In one of my previous articles (Investing in the stock... Read More

Forecasting the Stock Market

Every day I see in the financial section of newspapers... Read More

Successful Trading ? Establish Your Risk Level

Before you embark upon a journey of trading stocks or... Read More

How Eating Bitumen Made Me a Better Trader

Trading is a fascinating activity.There are so many layers to... Read More

Choosing A Fund

For years I have been saying you must have a... Read More

Who Knows?

The Shadow knows. Remember him? It seems a shadow has... Read More

Oil Stocks CHK WLL - What Is Their Worth?

(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More

Different Types of Mutual Funds

This is a guide to the different types of mutual... Read More

Dont Ask Your Broker

Unfortunately, most of you who are reading my column are... Read More

True Investment Road Maps

If you don't know where you are going any road... Read More

neptun lighting street light system Pete's produce ..
neptun lighting street light system Pete's produce ..