Annual report MD&A

Описание: A key part of a company’s annual report is the MD&A section, and I will provide you five reasons why you should review it! After reviewing the financial statements in the annual report, the MD&A section is the one I often turn to next. In this video, we will take a very practical approach to reviewing the annual report by looking into the MD&A sections of the 3M, Apple and General Electric annual reports, to answer some key questions you may have about these companies as an investor or employee.

Here are five good reasons to review the MD&A section of the annual report. MD&A actually stands for Management’s Discussion and Analysis of Financial Condition and Results of Operations.
1. The MD&A tells you about core performance drivers, like how many iPhones did Apple sell.
2. The MD&A provides critical information about core business segments, like how GE Aviation is doing.
3. The MD&A gives a narrative on what happened year-over-year in the P&L, on items like Earnings Per Share.
4. The MD&A has important information on a company’s financial position and liquidity, so it helps you understand what is going on in the cash flow statement and balance sheet, and has datapoints like a company’s credit rating.
5. The MD&A helps you identify the critical accounting policies that a company uses, and any upcoming changes in them.

Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!