Information On Operating And Financial Performance During The Past Year

791 WordsAug 11, 20154 Pages
In the business world, publically traded companies issue an annual report to update their shareholders and anyone else involved with the firm. The annual report “contains descriptive information on operating and financial performance during the past year” and may contain information on current and potential growth as well as include the financial statements (Melicher & Norton, 2013). Financial statements have been around since the beginning of trade. Recently, an ancient Egyptian receipt from around 98 B.C.E was discovered on Greek pottery (Jarus, 2015). In order to do business, accurate financial statements of all kinds are needed to share information. The income statement is a rather important financial statement. The income statement shows the revenues and expenses for a company over a period of time (Melicher & Norton, 2013). The main sections of an income statement will include the gross profit, operating income, income before taxes, and net income. The gross profit is the revenue minus the cost of the goods sold. To figure out the operating income, various expenses and possibly depreciation need to be factored in. After interest expenses are taken out to get the income, then taxes need taken out to figure out the net income (Melicher & Norton, 2013). For an annual report (or whatever the frequency is that the firm does i.e. quarterly or semiannually), companies will also include the per-share income as well. Firms will also release a “statement of” their
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