Sunday, February 19, 2012

How To Write Financial Reports For The End Of Year

Most of the people don’t know how to write financial reports, today we will know about annual report. first, you have to grasp the financial analysis, which can find the answer from the books, here not more than that, second, you press the theory of financial analysis for financial analysis, the focus on understanding what your boss's preferred financial analysis. Now we inform you total structure of annual report.
What is an Annual Report?
It is a legally required document that company publishes annually. It reports on the operations and finances of the company during the previous year. It includes the strengths, weaknesses, or failures. It may explain the efforts the company is making to improve its situations and forecast the coming year’s operations
Who Gets the Annual Reports?
It could be published in designated newspapers, It is sent to Government agencies, It is usually sent to stock holders, It is sometimes published on a company’s website.
Sample of Annual Report Download
 Annual Report-01

How is it used?
It is often used by senior executives as a showpiece reflecting their company’s philosophy and character. It has a role to play in projecting a favorable corporate image. It is a public report that can be used by bankers, professional investment analysts, the financial press, labor unions, employees, teacher’s legislators, etc.

Annual Report
The company annual report will change from company to company. Some companies only meet the legal requirements Other companies use it to their advantage to show off their company in glowing terms.

What are the Annual Report Sections?
Ø  Chairman’s statement
Ø  Chief executive’s review
Ø  Board of directors gives profile of the board of directors.
Ø  Financial statements
Ø  Auditor’s report
Ø  Financial highlights
Ø  Chairman’s Statement
Ø  Direct Statement from the chairman or president to the shareholders
Ø  Usually in the form of a letter
Ø  Briefly summarizes the entire annual report
Ø  Gives an in-depth review of the company’s performance
Ø  Dividend is formally announced
Ø  Gives major changes in the board of directors

Chief Executive’s Review
Ø  This section devoted to a wide range of topics concerning the company’s operations.
Ø  Plants,
Ø  New products
Ø  Sales trends,
Ø  Advertising Public relations
Ø  Employee relations
Ø  Taxes
Ø  Lawsuits affecting the company

What are the Annual Report Sections and how to write financial reports?
v  Chief executive’s review Chairman’s statement
v  Board of directors gives profile of the board of directors.
v  Introductions, biographies, recognitions,

Now you understand of question; how to write financial reports
Financial statements
·         profit and loss account, balance sheet, cash flow
·         Auditor’s report
·         Financial highlights

How do you write annual reports?
v  Consider the purpose of the annual reports.
v  Consider the audiences of the annual report
v  Make proper use of visual aids.
v  Make Proper Use of Visual Aids

o   A column chart shows data changes over a period of time or illustrates comparisons among items. Categories are organized horizontally, values vertically, to emphasize variation over time.
o   Stacked column charts show the relationship of individual items to the whole. The 3-D perspective column chart compares data points along two axes.
o   In this 3-D chart, you can compare four quarters of sales performance in Europe with the performance of two other divisions.
A bar chart illustrates comparisons among individual items. Categories are organized vertically, values horizontally, to focus on comparing values and to place less emphasis on time.
Stacked bar charts show the relationship of individual items to the whole.

An area chart emphasizes the magnitude of change over time. By displaying the sum of the plotted values, an area chart also shows the relationship of parts to a whole.
In this example, an area chart emphasizes increased sales in Washington and illustrates the contribution of each state to total sales.

A line chart shows trends in data at equal intervals.

A pie chart shows the proportional size of items that make up a data series to the sum of the items. It always shows only one data series and is useful when you want to emphasize a significant element.

Like a pie chart, a doughnut chart shows the relationship of parts to a whole, but it can contain more than one data series. Each ring of the doughnut chart represents a data series.

Cone, Cylinder, Pyramid
The cone, cylinder, and pyramid data markers can lend a dramatic effect to 3-D column and bar charts.

XY scatter
An xy (scatter) chart either shows the relationships among the numeric values in several data series, or plots two groups of numbers as one series of xy coordinates. This chart is commonly used for scientific data.
When you arrange your data place x values in one row or column, and then enter corresponding y values in the adjacent rows or columns.

A bubble chart is a type of xy (scatter) chart. The size of the data marker indicates the value of a third variable.

A radar chart compares the aggregate values of a number of data series.
In this chart, the data series that covers the most area, Brand A, represents the brand with the highest vitamin content.

A surface chart is useful when you want to find optimum combinations between two sets of data. As in a topographic map, colors and patterns indicate areas that are in the same range of values.

The high-low-close chart is often used to illustrate stock prices. This chart can also be used for scientific data; for example, to indicate temperature changes. You must organize your data in the correct order to create this and other stock charts.
 A stock chart that measures volume has two value axes: one for the columns that measure volume, and the other for the stock prices. You can include volume in a high-low-close or open-high-low-close chart.

How to write financial reports?
 Consider the purpose of the annual reports.
Consider the audiences of the annual report
Make proper use of visual aids.
Handle the language of the annual report with great care.

Handle the Language with care
Ø  Use special care with the two large blocks of text in the annual report
Ø  Chairman’s Statement
Ø  Chief Executive’s Review

Be Careful of Modal Verbs or Adverbs
The report should convey factual information using high frequency of modal verbs may diminish the objectivity of the report.

Modality and modal verbs
Modality: refers to your judgment of the possibilities or obligations involved in what you are saying a proposition may become arguable by being presented as likely or unlikely, desirable or undesirable

·         Likelihood
·         Possibility
·         Certainty and logical certainty
·         Prediction
·         Probability
·         Hypothesis

Likelihood: possibility
Ø  General scale of possibility:
Ø  Specific possibilities:
Ø  Factual possibility (may)
Ø  The railways may be improved
(it is possible that they may be improved, but no plans have been announced)
Ø  Specific possibilities
Ø  theoretical possibility (can)
Ø  The railways can be improved
(it is possible for the railways to be improved, but there is no money at present)
Ø  hypothetical possibility (could, may, or might)
Ø  If someone were to make a mistake, the whole plan might be ruined
Ø  tentative possibility (could or might)
Ø  Could you have left your purse on the bar?
Ø  Compare:
Ø  Viruses can damage information in the network. (=theoretical possibility)
Ø  Are you going to open your e-mail? Take care! A virus may have got into your files. (=factual possibility)
Ø  Likelihood: probability
Ø  Probability
Ø  ought to and should (both weaker than must.
Ø  The system ought to be working by now.
Ø  Modals often express hesitation or tentativeness on the part of the speaker/writer

Other suggestions
1. Use present and present perfect tenses of verbs to create a sense of reality.
2. Choose proper words as subjects
3. Give a concise heading to each part. 
4. Use adequate connective to signal the logical relationship between ideas
5. Avoid over use of technical words
6. Use legal technicalities to the level of common understanding.
Now you know everything about annual report and may you have not confused on how to write financial reports.


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