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Important things to look for in an annual report

The annual reports of companies form the most important source of information for stock investors. Here's what to look for in them

Warren Buffet once said, "I read annual reports of the company I'm looking at and I read the annual reports of the competitors - that is the main source of material." For a value investor, developing this skill of reading annual reports is an important stepping stone to success.

While investors often can get drawn in by stock tips from dubious sources and discussion threads online, they fail to give annual reports enough attention. And yet, it is in its annual report that a company lays bare its financials, shares its progress, explains its challenges, and articulates its strategy going forward.

Of course, an annual report is dense with information, not all of which calls for the same level of attention from an investor. Instead, key information can be obtained by paying attention to specific sections and deeply analysing important statements.

In the next webinar of Value Investing, we will guide you on reading an annual report without feeling overwhelmed by it. Soon you will be on your way to analysing these reports and making sound investment decisions grounded in an understanding of the company's business and financials.

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