Company performance

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Company performance
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Why is it important to know how your company
performes?

• Companies need to know how they are performing in
  order to analyse problems, find solutions and
  make plans for the future.
• Management accounts provide data about
  operational efficiency
• Financial accounts show how net lending or
  borrowing is achieved by financial transactions.
  It also records transactions in external assets
  and liabilites. Financial account consists of
  direct investment, portfolio investment and
  reserve assets.

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• Financial accounts also give information about
  revenue the company receives.
• Revenue is the entire amount of income before any
  deductions are made. It is the amount of money (
  both cash and non cash) that a company actually
  receives from its activities, mostly from sales
  of products or services to customers.
• With this information a company can then
  calculate how much money it has made (profits) or
  how much it has lost (losses) during a specific
  period.

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The companies whose shares are sold on the stock
exchange are called

• Listed companies
• These companies have to present their accounts to
  the public in an annual report. The annual report
  is the formal financial statement issued yearly
  by a corporation. It shows asstes, liabilities,
  revenues, expenses and earnings how the company
  stood at the close of the business year.

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The annual report also

• Discusses the companys financial affairs and
  performes a useful function in a free market
  system because it transmits information from the
  company to its shareholders and investing public.
• Although the report is addressed to shareholders,
  other people who have a stake in the business
  (employees, suppliers, customers and lenders)
  will also find it informative.

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A typical annual report consists of

• Auditors report This summary written by
  independent public accountants shows whether the
  financial statements are complete, reliable, and
  prepared according to generally accepted
  accounting principles (GAAP).
• Report of management This letter, usually from
  the board chairperson, takes responsability for
  the validity of the financial information in the
  annual report.

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• Financial statements and notes These provide the
  complete numbers for the companys financial
  performance and recent financial history. The SEC
  (Securities and Exchange Commission) requires
  statemant of earnings, statement of cash flows
  and statement of financial position.

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• Management discussion This information
  summarizes a companys financial condition and
  performance over five years or longer, including
  gross profit and net earnings (net income).
• Selected financial data This series of short,
  detailed reports discusses and analyses the
  companys performance. It covers results of
  operations, and the adequacy of resources to fund
  operations.

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• Board of directors and management This list
  gives the names and position titles of the
  companys board of directors and top management
  team.
• Stockholder information This information covers
  the basics-the companys headquarters, the
  exchanges on which the company trades its stock,
  the next annual stockholders meeting, and other
  general stockholder service information.

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• Corporate message This may be from the
  chairperson of the board of directors, the chief
  executive officer, or both. It can provide an
  analysis and a review of the years events,
  including any problems, issues, and the successes
  the company had. It usually reflects the busienss
  philosophy and management styles of companys
  executives, and it often lays out the companys
  direction for the next year.

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• Letter to stockholders Some consider this an
  advertisement for the company. However, it almost
  always reflects how a company sees itself, or how
  it would like others to see it. Here, the company
  can explain itself to the stockholders, using
  photographs, illustrations, and text. It may
  cover the companys lines of business, markets,
  mission, management philosophy, corporate culture
  and strategic direction.

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• Financial highlights Problably the most
  often-read section of any annual report, these
  give a quick summary of a companys performance.
  The figures appear in a short table, usually
  accompanied by supporting graphs.

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Nouns and prepositions
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Some nouns are always followed by the same
prepositions. Match the prepositions with the
nouns below

• The resut
• An enquiry
• Involvement
• An interest
• Support
• Satisfaction
• A percentage
• A tax
• Research
• An effect

• With
• For
• Of
• On
• Into
• In

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Complete the following passage with suitable
prepositions

• A report ___ the performance of the European
  vending machine industry shows that companies
  have had to invest heavily in the past years in
  order to prepare for the introduction ___ the
  euro.
• As European national currencies gradually
  disappeared to make room for the euro coins and
  banknotes, the vending industry had been
  discretely conducting research ___ the best way
  to prepare for the switchover.
• The findings ___ their studies revealed that most
  operators would face two major dilemmas.

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• The first question was whether or not to join in
  the movement __ electronic money, and to equip
  machines with card readers. Some companies opted
  early on to do this and one major European
  operator had already converted 70 ___ his
  machines to electronic cash well before the
  introduction of the euro. But the trouble ___
  this approach was that it involved heavy
  expenditure ___ new systems. The alternative was
  to retrofit exsisting machines with new
  electronic chips that could recognise the coins.

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• Another worry was whether the national
  authorities would make enough of the new coins
  available for the customers to use. While
  national governments had responsibility ___
  minting the coinage, in some cases they did not
  have the capacity to produce the millions of
  coins that were necessary for a smooth transition
  ___ the new currency.