Listed companies have to send all their shareholders annual reports. In addition, the quarterly financials of the company can be found on the stock exchanges’ websites and on the website of the company. Here are the financial statements of a major IT services company,

XYZ Technologies Ltd. (XYZ)

XYZ Technologies Limited Comparative Balance Sheets

The primary and most important source of information about a company are its Annual Reports, prepared and distributed to the shareholders by law each year. Annual Reports are usually well presented. A tremendous amount of data is given about the performance of a company over a period of time. If an Annual Report is impressive about the operations and future direction, if the company has made a profit and if a reasonable dividend has been paid, the average investor is typically content in the belief that the company is in good hands. However, for a fundamental analyst or for that matter any investor, this alone must not be the criterion by which to judge a company. The intelligent investor must read the annual report in depth; he must read between and beyond the lines; he must peep behind the figures and find the truth and only then should he decide whether the company is doing well or not.

The Annual Report is usually broken down into the following specific parts:

1. The Director’s Report

2. The Auditor’s Report

3. The Financial Statements and

4. The Schedules and Notes to the Accounts.

Each of these parts has a purpose and a story to tell.