The Management Discussion and Analysis section of an annual report addresses cor

Question

The Management Discussion and Analysis section of an annual report addresses corporate performance for the year, and sometimes uses financial ratios to support its claims.

Address: www.ibm.com/investor/tools/index.phtml

Steps 1. Choose Guide to Annual Reports.

2. Choose Anatomy of an Annual Report.

Instructions – Respond to one the following in detail. Using the information from the above site, answer one of the following questions in detail.

(a) What are the optional elements that are often included in an annual report?

(b) What are the elements of an annual report that are required by the SEC?

(c) Describe the contents of the Management Discussion.

(d) Describe the contents of the Auditors' Report.

(e) Describe the contents of the Selected Financial Data.

Explanation / Answer

contents of the Management Discussion.

Management discussion. This series of short, detailed reports discusses and analyzes the company's performance. It covers results of operations, and the adequacy of liquid and capital resources to fund operations.

Clause 49(IV)(i) of the Listing Agreement: As part of the directors directors’ report or as an addition addition thereto, a Management Discussion and Analysis report should form part of the Annual Report to the shareholders.

Contents of the Management Discussion and analysis General

1. Brief discussion of the basic financial statements, including the relationships of the statements to each other, and the significant differences in the information they provide.

2.         Comparisons of the current year to the prior year condensed financial information based on the government-wide information with emphasis on the current year.

3.         Analysis of the government’s overall financial position and results of operations to assist users in assessing whether the financial position has improved or deteriorated as a result of the year’s activities.

4.         Analysis of balances and transactions of individual funds. This should include reasons for significant changes in fund balances or fund net assets and other restrictions, commitments, or other limitations that significantly affect the availability of fund resources for future use.

5.         Analysis of significant variations between original and final budget amounts and between final budget amounts and actual budget amounts results for the general fund. Also include any currently known reasons for those variations that are expected to have a significant effect on future services or liquidity.

6.         Describe capital asset and long-term debt activity during the year including a discussion of commitments made for capital expenditures, changes in credit ratings, and debt limitations that may affect the financing of planned facilities or services.

7.       Conclude with a description of currently know facts, decisions, or conditions that are expected to have a significant effect on financial position or results of operations

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