If your company has shareholders to answer to, preparing shareholder analysis reports will be an annual task that you or your finance officer will need to do. This task can take on a new sense of urgency when end of year employee bonuses hang in the balance of what your shareholders see on the report.

Preparing shareholder reports doesn’t have to be a time-consuming task that keeps you locked in your office for weeks, if you keep the basics in mind.

Shareholder Analysis Reports: Purpose

When it comes to preparing your reports, it’s crucial you put yourself in the shoes of your audience. Unless they specifically ask for more information, your shareholders want to know the bottom-line profit for the year and any major contributing factors. It’s often unnecessary to write long passages of narrative to explain the company’s current financial position when your profit figure will tell them that.

Instead, be concise if you must write an overview or summary, focusing on the information they need to know.

Shareholder Report on Revenue

The revenue section of your shareholder analysis report should be a straightforward section for you to compile. If your company has only one revenue stream, you’ll have one section to complete. For companies with more complex revenue streams, find out how much detail your shareholders want. There’s little point in adding endless line items to the report if they don’t care about the performance of the individual widgets within a particular business unit.

Shareholder Report on Expenses

Preparing the expense section of your shareholder analysis reports usually takes longer than the revenue section. Specifically, make sure you address:

  • Advertising expenses
  • Customer credits and returns (although some companies list this as a line item in the revenue section)
  • Marketing expenses
  • Rent or mortgage expenses
  • Office supply expenses
  • Salaries
  • Travel expenses
  • Utilities

When completing this section of your shareholder analysis report, it’s customary to project your expenses for the remainder of the year, as most shareholder reports cover a calendar year. To complete your projection, calculate your remaining fixed expenses for the year, as well as any variable expenses you already know about – like an upcoming sales conference or out of town appointment. For your fluctuating expenses, looking at historical data from the end of previous years will help you with accurate projections.

You’ll also complete revenue projections in this this manner.

Shareholder Reports on Staff

For small companies, your shareholders may wish to know about the performance and activities of individual employees, while larger companies may focus on overall departments or omit it altogether. If you must include information on employees when preparing shareholder analysis reports, focus your attention on activities that drive revenues or cut expenses. Though the attitude and personality of your staff is important for daily operations, this does little to further the purpose of your shareholder reporting: explaining the bottom line.

Every group of shareholders will have different objectives, ranging from determining dividends to expanding long-term growth potential. The nature of shareholder reports you prepare for one company may not be adequate for another company. This is one area where staying flexible and listening to the feedback you receive from shareholders will cut the time it takes to prepare future reports.

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