Explainer: What is an Annual Report?
By Nicole Schuman for PRNews
What is an Annual Report?
Annual reports tell the story of an organization’s financial achievements (and losses) over the fiscal year. They provide a clear, yet in-depth overview of operations, financial status and cost analysis for stakeholders (including shareholders, employees and investors).
Components of an annual report can include:
- A note from leadership
- Financial statements (budgets, cash flow, profit/loss, etc.)
- Analysis on the company or organization’s performance including future casting and risks
- Achievements, key initiatives and plans for the future
Annual reports are due to stakeholders within 60 days of the end of an organization’s fiscal year (and release of earnings statement).
Why Annual Reports Matter to Communicators
Organizations (particularly the PR department) do not spend countless hours on these extensive annual reports just because of legalities, but because of their ability to build trust with stakeholders by putting everything financial out in the open. Many organizations include the reports as part of their communications strategy—a content piece to possibly attract new donors or investors or employees and retain those already connected to the brand.
“Before the earnings announcement, communications professionals must define the earnings narrative and the messages that leadership wants to convey about the company’s performance,” says Ted Birkhahn, Managing Director at Vested. “For it to be credible, messaging and positioning should always be intentional, transparent and accurate, and infuse a healthy dose of storytelling that brings critical points to life for all audiences to understand.”
Birkhan also notes the importance of how the annual report is communicated once it’s complete.
“It’s essential to plan in advance how the earnings information will be shared with internal and external audiences, and how the business will handle follow-up inquiries,” he says. “This ensures the effective dissemination of earnings information and helps manage follow-up inquiries.”
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