How to Write an Annual Financial Report

Assemble old receipts and financial statements for your annual report.

Annual reports are financial status reports composed by businesses. These reports indicate the truthful financial status of the business at any given time. The report highlights how the company spends money and where the money is coming from, and provides a list of prominent investors and a personalized letter from important people in the company. To write a financial report for your company, gather receipts and bills for the financial period covered in the report.

Instructions

1. Write a letter to the readers. It is common for an annual report to contain a letter from the CEO. The letter should recognize the ups or downs in the company's financial status and describe them to the readers, particularly any major financial problems.

2. Locate all bills, financial statements, payment slips and any other information relevant to the company's spending and earnings. Financial reports are often written for a given period, such as January 2009 to December 2009. Check that all of the items have the appropriate date on them. If not, put them aside for future financial reports.

3. Write an "Assets" section where you outline all of the assets the business owns. Assets include equipment and properties. In addition, write a "Liabilities" section that outlines the money the business owes, such as loans. Create a third section titled "Expenses" that should include costs such as monthly rent and utilities.

4. Create an overall net worth section in the report. Subtract the liabilities from the assets to determine how much the business is actually worth. In another section, subtract the monthly expenses from monthly income to determine the business's financial status. The business should be in a positive state each month to continue to grow. If this section is negative, the business is spending more each month than it is earning.

5. Analyze the spending habits of the business to determine what can be cut to save money. This can include items under monthly expenses, such as company cars or business dinners. Justify in the report's text your reasons for cutting down the chosen expenses. This decision making is done to ensure that the upcoming year will be much better in terms of the business's financial status.

6. Predict the following year's financial report by analyzing the cuts made in the previous step. For example, focus on how money will be saved for the benefit of the customers or clients. The prediction section also serves as a conclusion, and the reader is left with a positive vision of the future.

References

• Investment U: Understanding Annual Reports
• Stock Investments Made Easy: How to Read Annual Reports