Annual Report
A comprehensive yearly publication summarizing a public company's financial performance and strategy for shareholders.
What is Annual Report?
An annual report is a comprehensive document that public companies publish each year to communicate financial results, business activities, and strategic direction to shareholders and other stakeholders. It typically includes audited financial statements (income statement, balance sheet, and cash flow statement), the MD&A section, notes to the financials, the auditor's opinion, and a letter from the CEO. While the Form 10-K filed with the SEC is the legal version, many companies also produce a polished shareholder-facing annual report with graphics and narratives. Investors use annual reports to evaluate a company's financial health, competitive position, and management quality before making investment decisions.
Example
Berkshire Hathaway's annual report is one of the most widely read in investing, primarily for Warren Buffett's shareholder letter, which discusses the company's performance, investment philosophy, and views on the economy — often serving as a master class in business analysis for investors worldwide.