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Free Finance Questions Essay Sample
Company’s annual report is an inclusive report that contains activities of a company during the preceding year. The main aim of the annual report is to provide shareholders and stakeholders with the information regarding the company’s financial performance and activities. Companies are required by laws to prepare and reveal their annual reports, and they might be necessitated to keep in their registry. Moreover, all companies that are listed on the stock exchange are necessitated to persistently disclose their on going activities, but this normally depends on the rule of the stock exchange recommendable.
A company annual report many include the following;
- CEO's report
- Mission statement
- Auditor's report on corporate governance
- Chairperson's report
- Summons to the company's AGM
- Statement of directors' errands
- Corporate governance statement of acquiescence
The financial statement includes;
- Income statement
- Cash flow statement
- Balance sheet
- Statement of retained earnings
- Auditor's report on the financial statements
- Accounting policies
- Notes to the financial statements
A good example of a company’s annual report and accounts that will enable us to understand and analyzing its market, productive and financial performance is for the Coca Cola Company. Coca Cola Company is the leading company in manufacture, distribution as well as selling of non-alcoholic beverages in US and other parts of the world. The company was established in 1886 in Atlanta Georgia by John Pemberton who was a pharmacist by combining soda water, shrub weeds from Brazil, cinnamon and lime water. These ingredients formed the original recipes of non-alcoholic beverages, which has become the most consumed across the globe.
Mission Statement
The mission statement declares the purpose of the company. It also serves as standard against which Coca Cola Company weighs its decisions and actions. The company has three main mission statements
1) refreshing the world
2) Creating value and making a difference
3) Inspiring moments for happiness and optimism
From above mission statement, it’s clear that this company focus on global market, although it’s a very competitive market.
The income statement, a crucial part of the financial statements, outlines a company's revenues and expenses during a specific period. It provides insights into the profitability of the company by detailing the net income or loss. In Coca Cola's annual report, the income statement would shed light on the revenue generated from the sale of non-alcoholic beverages and the various costs incurred in the production and distribution processes.
Cash flow statements, another integral element, track the movement of cash in and out of the company. It consists of operating activities, investing activities, and financing activities. For a company like Coca Cola, the cash flow statement would reflect the cash generated from its core business operations, investment activities such as acquiring new production facilities, and financing activities like issuing stocks or repurchasing shares.
The balance sheet is a snapshot of a company's financial position at a specific point in time. It comprises assets, liabilities, and shareholders' equity. In the context of Coca Cola, the balance sheet would highlight assets such as bottling plants and distribution networks, liabilities like loans or accounts payable, and shareholders' equity representing the ownership stake.
The statement of retained earnings outlines changes in retained earnings over a specific period, considering dividends and net income. This statement helps stakeholders understand how a company is utilizing its profits. For Coca Cola, this statement would reveal how much of the earnings are retained for future growth initiatives or distributed as dividends to shareholders.
Auditor's reports on both corporate governance and financial statements play a critical role in providing an independent assessment of a company's adherence to governance principles and the accuracy of its financial reporting. These reports enhance the credibility and reliability of the information presented in the annual report.
Accounting policies and notes to financial statements offer additional context and details regarding the methods used in preparing financial statements. In Coca Cola's case, these sections would elucidate the specific accounting principles applied, providing a more nuanced understanding of how financial figures are determined.
By exploring these aspects, stakeholders gain a more comprehensive understanding of Coca Cola's financial health, operational efficiency, and adherence to governance standards beyond what the essay initially covered.
