- Describe and discuss the elements of the Annual Report. Which elements are the most valuable and why? Justify your answer.
- According to the book, what other information or pieces in the annual report is important and why?
for number 2 (BOOK): Other Important Information in the Annual Report :
Financial and statistical information for five or ten years is often included. This provides a valuable overview of the company’s performance and the consistency of that performance. It is economies during the same period. This may provide some indication of how economic events have affected the company and how it has dealt with this environment. The Johnson & Johnson annual report provides a wonderful example of this.
A list of the members of the management team and the board of directors is provided. Which executives are invited to join the board may provide an indication of the company’s succession plans. Outside directors who are or were CEOs of other companies may become candidates for the top job at this company if the management team does poorly and an outside perspective is required.
We learn which board members belong to the various board committees. This will enable us to be sure that there is at least one CPA on the audit committee and that there are no full-time employees on the compensation committee.
Somewhere in the back of the annual report there appears a section with what appears to be routine information. It includes:
-The place and time of the annual meeting
-How to get a 10-K report
-How to contact various departments in the company with questions
-Whether the company has dividend reinvestment and direct stock purchase programs
-How to get additional information