What are the benefits of annual reports?

Annual financial Report benefit in general is providing information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.
& in details the financial reports have the following benefits Its helps Managers to deal of the company affairs by assessing its financial performance and position and taking important business decisions.
It also help Shareholders to assess the risk and return of their investment in the company and take investment decisions based on their analysis.
Prospective Investors need Financial Statements to assess the viability of investing in a company.
Investors may predict future dividends based on the profits disclosed in the Financial Statements.
Furthermore, risks associated with the investment may be gauged from the Financial Statements.
For instance, fluctuating profits indicate higher risk.
Therefore, Financial Statements provide a basis for the investment decisions of potential investors.
The financial report assist the financial Institutions (e.g.
banks) to decide whether to grant a loan or credit to a business.
Financial institutions assess the financial health of a business to determine the probability of a bad loan.
Any decision to lend must be supported by a sufficient asset base and liquidity.
Suppliers also need financial reports to assess the credit worthiness of a business and ascertain whether to supply goods on credit.
Suppliers need to know if they will be repaid.
Terms of credit are set according to the assessment of their customers' financial health.
Customers use Financial Statements to assess whether a supplier has the resources to ensure the steady supply of goods in the future.
This is especially vital where a customer is dependent on a supplier for a specialized component.
Employees use Financial Statements for assessing the company's profitability and its consequence on their future remuneration and job security.
Competitors compare their performance with rival companies to learn and develop strategies to improve their competitiveness.
General Public may be interested in the effects of a company on the economy, environment and the local community.
Governments require Financial Statements to determine the correctness of tax declared in the tax returns.
Government also keeps track of economic progress through analysis of Financial Statements of businesses from different sectors of the economy.

Annual reports are also a method of external communication.
It is a more formal and written method of communication.
It provides information to customers, exiting investors and future investors about the financial position and future prospects of the company.
Annual report contained the important information which can be used by the future investors for the appraisal to invest in that company or not.
An audited annual report offers assurance to future investors and banks that company is doing well.

Having an organized annual report does have its benefits.
First off all it is readable to any outside party – they can follow the information from accurate table of content, trace what they are looking for by using the cross-references and if the report starts off with financial statements and they are followed by the notes, it will all also be in logical sequence.
A number one goal for the annual report is to be readable, understandable and clear.
Another benefit of having a well thought through and orderly annual report to present previous financial year is the pure fact that it represents your company.
What you want people to see and think about your company, is how your annual report should look alike.
A well prepared annual report is hence an introduction to your company.
Possible future employees, investors, suppliers and customers all may read it.
So make sure your annual report is organized.

1- Tool for monitoring and evaluation.
2- Documentation of achievements.
3- Means of sharing knowledge and lessons learned.
4- Tool for planning and decision making.
5- A good report gives good presence of the organization or institution.