Annual reports aim to give information about the organization’s financial performance and other activities throughout the previous year. This document is important because it allows managers to determine trends and understand what should be done to make a company’s performance better. In order to make a report clear and easy to follow, specific instructions should be explained and clarified. This memo will provide marketing personnel with essential requirements for annual reports.
Firstly, managers should know that there are two major types of financial reports: external and internal. The latter contains private information about the company and is not required to comply with strict requirements (Thomson, 2013). External reports should consist of the income statement and the balance sheet. A shareholders’ equity statement should be present in the report for the incorporated organizations. According to the Form 10-K standards, the report should consist of four parts: directors, executives, and business operations. Moreover, each annual report should include several sections: highlights, a letter from the president, auditors’ report, management’s discussion and analysis, management’s discussion of financial responsibility, financial statements, notes to the financial statements, and other information (Giroux, 2013). According to the Securities Act, marketing personnel must provide shareholders with annual reports before annual meetings.
I believe that it is essential for all marketing staff members to be able to communicate about financial matters as it represents employees’ financial literacy. It is also evident that improving employee financial knowledge may have certain advantages. First of all, it increases retention and productivity. Practice shows that financially literate workers are less stressed and show greater focus, which makes them more effective. Moreover, it allows them to gain a better understanding of the total rewards, such as disability and health benefits and tuition plans.
Giroux, G. (2013). Business scandals, corruption, and reform: An encyclopedia [2 volumes]. ABC-CLIO.
Thomson, J. (2013). Mind the GAAP: Why private companies should embrace one reporting standard. Forbes. Web.