What does an annual report typically include?

An annual report is a comprehensive document that provides a snapshot of a company’s overall financial health and performance over the past year. One of its primary components is a statement of financial condition and progress, which includes the company's financial statements such as the balance sheet, income statement, and cash flow statement. This section offers stakeholders, such as investors and employees, insight into the company's profitability, financial stability, and operational efficiency.

In contrast, monthly sales figures, forecasts for the next quarter, and individual departmental budgets focus on more short-term aspects of the business and are typically not included in an annual report. Monthly sales figures detail performance on a smaller time scale, forecasts are projections related to future performance rather than a review of past performance, and departmental budgets offer a narrow perspective that doesn’t reflect the entire organization’s financial condition. Therefore, the inclusion of a statement of financial condition and progress makes the annual report a crucial tool for understanding a company's overall performance and strategic direction.