Reading an annual report
Every listed company publishes an annual report. It is long, but you only need to know where to look.
Where to find it
Look on the company’s own site, under Investors. Since 2021 listed companies in the EU publish it in one machine-readable format (ESEF), so the numbers can be read by software as well as by people.
The parts
A letter from the bosses, a report on the year and its risks, the three statements, the notes behind them, and the auditor’s opinion. The statements give the numbers; the notes explain how they were made.
Read the notes
One-off gains, changes in how things are counted, debts that sit outside the main numbers: they are in the notes. When a number looks too good, the note behind it is where the answer is.
The auditor
An independent auditor checks the accounts. A clean opinion says they are fairly presented. Any reservation or doubt about the company carrying on is rare and worth taking seriously.
Key takeaways
- Annual reports are on the company’s Investors page.
- Statements give numbers; notes explain them.
- An auditor’s reservation is a red flag.