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Things to look in QR/AR

Financial reporting which revolves presentation of a company’s financial accounts allows investors to gain better insights into a company’s financial stability and thus assist in investment decision making. Public listed companies (PLC) are required by regulators to issue both quarterly and annual reports in a certain timeframe. Quarterly reports and annual audited financial statements will be issued within two months from the end of the quarter and four months from the close of the financial year respectively. In the meantime, annual reports will be issued within four months of the company’s financial year-end.

Some basic pointers that require investors’ attention include but not limited to;

Income Statement Description
Revenue How much sales the company generates
Gross Profit Profit after deducting the costs associated with making and selling its products
Pre-tax Profit Profit after deducting all expenses prior to corporate income tax
Net Profit The net amount earned by a company deduction of related expenses and tax
Balance Sheet Description
Cash & Cash at Bank The most liquid type of asset that keeps the company operations running
Loans & Borrowings The amount of debt the company owes to financial institutions
Total Equity Net value of the company to shareholders after deduction of all its liabilities
Cash Flow Statement Description
Cash Flow from Operating Activities Measure of the amount of cash generated by a company’s daily business operations
Cash Flow from Investing Activities A net change in a company’s cash position (Gains/Losses) from investments in the financial markets and capital expenditures
Cash Flow from Financing Activities Revolves financing items such as issuance/repayment of debts, payments of dividends and share buybacks

Apart from the reported figures in quarterly financial statements, investors advisable to take note on the quarterly financial statements which involve the (i) reviews, comments and explanations of the quarterly performance vis-à-vis the company’s previous and previous corresponding quarter and (ii) prospects of the company moving forward.

Example:

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For annual financial report, investors advisable to take note on the Chairman’s Statement on his/her take of the business operations which revolve (i) business operations which revolve around the nature of business of the company, notable works completed/delivered (ii) financial review which revolve the financial position of the company and (iii) growth strategies which revolves the company expansion plans, moving forward.

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