Publicly traded companies must publish annual financial reports to comply with U.S. Securities and Exchange Commission rules. You can find many different types of information on an annual report to help you guide your investing.
Comparing year-to-year data, going back several years, can help you spot trends you can use to make future decisions. One piece of information that will be key to your investing decisions regarding particular companies is their annual sales. You can easily find this figure on a company’s financial statement that’s included in an annual report.
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Finding Annual Sales
Find the income statement that’s included in the annual report you’re reviewing. It might be listed on the contents page of the report. You’ll find annual sales listed as one of the income statement items. Finding the annual sales is as simple as looking for the phrase “annual sales” or “yearly sales.”
Many income statements will show the previous year’s sales next to this year’s sales so an investor or other interested person can make a comparison about the company’s performance. If you notice that sales were down this year or way up, you can refer to the guidance section or supplementary notes in an annual report that explain why this happened.
For example, a business might note that sales were down one year due to a temporary economic event, such as COVID-19-related supply chain issues. If sales rebound the next year, the company might explain that the large increase in sales was due to problems with the economy being solved.
The business might provide information about projected income for the coming year, or provide average sales for more recent years to give a more realistic projection of what might happen in the future.
What Is an Annual Report?
An annual report is a document that provides the public with information about the business activities and financial performance of publicly traded companies. The term “annual report” is also used to describe similar documents for privately held businesses, government agencies and nonprofit organizations.
Annual reports for public companies are very similar because they must meet legal reporting requirements. You can request annual reports from public companies by calling or writing, although they are often available on the company’s website.
Annual reports aren’t difficult to read and include information about a company’s assets, key employees, marketplace conditions, government legislation that affected the business and other issues that put the numbers presented in the document into better perspective for readers.
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What Is a Financial Statement?
Financial statements refer to specific accounting documents that provide summaries of different areas of a company’s fiscal performance. The main documents are the balance sheet, income statement and cash flow statement. These are only a small part of a company’s annual report, but are key documents for investors to review.
You’ll find a company’s annual sales on the income statement of an annual report. Although a cash flow statement shows how much money a company took in during a single year, some of that money might have been generated by the previous year’s sales, while some of this year’s sales might not be paid until next year.
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Steve Milano has written more than 1,000 pieces of personal finance and frugal living articles for dozens of websites, including Motley Fool, Zacks, Bankrate, Quickbooks, SmartyCents, Knew Money, Don't Waste Your Money and Credit Card Ideas, as well as his own websites.