Investment School: How to analyze company's annual report?

How to analyze company's annual report?

Many of us are proud owners of shares of bluechip companies and we receive company's annual reports every year. Most of us do not give due importance to the annual reports. Many useful information can be obtained from the annual reports and those can help you decide on your future investment in the particular company.

Let us glance through some important information that needs to be looked at a company's annual report mailed to you.

1. Look out for the current state of the company and what are the changes which have evolved in the company over the past one year.Track the progress over the past few years.

2.Get information on new acquisitions or any major developments in the company.

3. Get to know about various offerings/products from the company.Learn what is unique about them and how are they different from the competitors.

4. Know what is the company's plan for the upcoming financial year.

5. Learn more about short term and long term goals from the annual report.

6. Go through the profit and loss account statement.

7. Analyse the sales growth and earnings growth over past 3-5 years which will be given in the annual report.

8. Go through the various assets,liabilities of the company from the balance sheet of the company.

In addition to these, many other useful information can be inferred from a company's annual report.Remember , every share holder has the right to know all details about his/her own company.

So , go and get the annual reports of your companies from your dusty shelves at home and go through them and get knowledgeable about your company.

Learn More : How to invest?

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