What it is:
An annual report is an audited corporate document that details the business activity and financial status of a publicly-held company over the previous year.
How it works/Example:
The Securities and Exchange Commission (SEC) requires all public companies to distribute an annual report to shareholders at the end of each fiscal year. Each report contains the three main financial statements -- the Income Statement, Cash Flow Statement and Balance Sheet -- as well as a host of other company-related data.
Why it matters:
The annual report provides a variety of important financial data. The SEC requires all publicly traded companies to file reports on an annual and quarterly basis, and the reports provide in-depth information on a company's products, market segments, competitors, customers, management and legal proceedings. Investors can readily access these financial reports for all public companies and mutual funds incorporated in the U.S. on the SEC's web site found here.