How to Critique an Annual Report


The purpose of an annual report is to provide factual information relating to a company's operations. The annual report is a required publication for nearly every large company, nonprofit organization and many small businesses. It is a reflection of the company and deserves a great deal of attention. Whether you are critiquing your own or another company's annual report, there are several key elements that must be present to ensure a quality annual report is produced.

Identify the main sections of the annual report you are critiquing. A well-written annual report should contain at least a mission statement, a letter from the president, a financial summary and an operations and management review highlighting recent accomplishments.

Note the clarity of the content. A company's annual report should illustrate successes and triumphs in the face of adversities. If the copy is not clearly written, the intended message will not be relayed. Selected vocabulary and terminology should be audience appropriate.

Evaluate the quality of the content. There should be no discrepancies from one section of the annual report to the next. All information should be honest and forthcoming. While an annual report can be used as a marketing tool for the company, its main purpose is to disseminate factual information about a company's previous year's progress as well as future plans and goals.

Determine the overall appeal of the annual report. Shareholders, prospective investors and board members should want to read the report. An annual report should include attention-grabbing photographs, fonts, headlines, tables and graphs. However, these artistic elements should be complementary to the company's established brand and image.

Evaluate the consistency of the annual report's content. A theme or key message should be incorporated into an annual report. This theme should be easily identifiable and should be consistent throughout the report. It should be present in both copy and artistic elements.

Create an evaluation form to provide a written assessment of your annual report critique. You should include specific notes on the content, clarity, quality, appeal and consistency of the annual report. You can assign a numerical measurement to each element, providing a scale by which the annual report can be judged.

Tips & Warnings

  • You should be aware there are differences in annual report requirements for publicly traded companies based on Securities and Exchange Commission regulations.

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