What is the purpose of an annual report?

The purpose of an annual report is to offer a comprehensive overview of a company's performance and financial position over the past year. This report is crucial for stakeholders, including investors, employees, and regulators, as it provides detailed insights into the company's financial health, operational activities, and strategic direction. It typically includes key financial statements such as the income statement, balance sheet, and cash flow statement, along with management's discussion and analysis.

Annual reports also often highlight significant events and milestones, as well as future outlooks, which are essential for stakeholders who are making informed decisions regarding their involvement with the company. By covering these aspects, the annual report serves as a vital communication tool that ensures transparency and accountability in corporate governance.