{"id":11030,"date":"2021-12-24T16:28:35","date_gmt":"2021-12-24T13:28:35","guid":{"rendered":"https:\/\/roboforex.com/blog\/?p=11030"},"modified":"2026-05-26T10:54:34","modified_gmt":"2026-05-26T07:54:34","slug":"financial-reports-of-companies-main-reference-point-for-investors","status":"publish","type":"post","link":"https:\/\/roboforex.com/blog\/blog\/2021\/12\/24\/financial-reports-of-companies-main-reference-point-for-investors\/","title":{"rendered":"Financial Reports of Companies: Main Reference Point for Investors"},"content":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<html><body><p>When you are investing in the stock market, you need to account for various factors and data from companies that you will be basing your investment decisions on. One of the most important and complex <a href=\"https:\/\/roboforex.com/blog\/blog\/2019\/11\/19\/top-10-forex-indicators-that-every-trader-needs\/\" data-internallinksmanager029f6b8e52c=\"99\" title=\"Indicators\">indicators<\/a> of success of businesses is the <a href=\"https:\/\/roboforex.com/blog\/blog\/2020\/11\/10\/how-to-analyze-financial-reports-of-companies-by-ifrs\/\">financial report<\/a>. It helps predict further development of the company and decide whether its shares are worth putting your money in.<\/p>\n\n\n\n<p>Companies that do not have their <a href=\"https:\/\/roboforex.com/blog\/blog\/2020\/10\/28\/how-to-invest-in-stocks-for-beginners\/\">shares<\/a> traded in the stock market may not reveal their reports to all those who are curious. On demand, they can provide this information to tax authorities or potential investors. However, only public companies must reveal their financial reports fully.<\/p>\n\n\n\n<p>As a rule, reports are published in open sources or on the websites o companies. The reporting period that ends up in a financial report, can be a quarter, six months, or a year. In certain cases, companies provide reports for longer periods for the sake of clearance of analysis.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_financial_reports\"><\/span><a><\/a>Types of financial reports<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Internationally accepted practice offers several types of standard reports:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>IFRS &ndash; International Financial Reporting Standard<\/li>\n\n\n\n<li>US GAAP &ndash; US Generally Accepted Accounting Principles.<\/li>\n<\/ul>\n\n\n\n<p>The latter standard is used by companies that have their shares traded in US stock markets.<\/p>\n\n\n\n<p>As the name reveals, the IFRS is an international reporting standard. Quite often, the IFRS report is adjusted to the standards of US GAAP for simpler analysis.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_needs_financial_report_and_what_for\"><\/span><a><\/a>Who needs financial report and what for<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Tax authorities<\/strong>&nbsp;calculate taxes for the company based on the reports. The information must be absolutely realistic; data that does not reflect the real state of things may not be published.<\/p>\n\n\n\n<p><strong>The management of the company<\/strong>&nbsp;makes decisions about further development of the company based on the reports. They can plan extension of business or, on the contrary, get rid of losing branches to cut down on unnecessary expenses.<\/p>\n\n\n\n<p><strong>Shareholders and investors<\/strong>&nbsp;use the reports to assess the finance of the company, the work of the management, investment perspectives, etc.<\/p>\n\n\n\n<p>Financial reports help future investors decide which company to invest in and what to do with the shares already in the portfolio. Also, the report makes it clear whether the company will pay <a href=\"https:\/\/roboforex.com/blog\/blog\/2020\/01\/31\/how-to-make-money-on-dividends-real-cases\/\">dividends<\/a> and how much.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_you_can_find_in_a_financial_report\"><\/span><a><\/a>What you can find in a financial report<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Profits and losses of the company over the reporting period<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Gross profit<\/li>\n\n\n\n<li>Operational profit<\/li>\n\n\n\n<li>Net profit<\/li>\n\n\n\n<li>Base EPS<\/li>\n<\/ol>\n\n\n\n<p><strong>Flow of funds<\/strong><\/p>\n\n\n\n<p>The report accounts for cash and non-cash receipts and payments on all bills, including money flow from investments, operational, and financial activities.<\/p>\n\n\n\n<p><strong>Balance<\/strong><\/p>\n\n\n\n<p>The report shows the financial performance of the company over the reporting period: the total company value including cash, property, and liabilities.<\/p>\n\n\n\n<div class=\"block-banner dark_blue-pink\">\n    <div class=\"block-banner__content\">\n      <div class=\"block-banner__text-content\">\n        <p class=\"block-banner__title\">Top trading conditions with a Prime account<\/p>\n        <p class=\"block-banner__text\">Low commissions, spreads starting from 0 pips, leverage up to 1:300, and execution in as fast as 0.1 sec<\/p>\n      <\/div>\n    <div class=\"block-banner__images-wrapper\">\n      <img decoding=\"async\" class=\"block-banner__image block-banner__image_mobile\" src=\"\/wp-content\/uploads\/2023\/09\/prime1-mobile.png\" alt=\"prime-account\">\n    <\/div>\n      <a href=\"https:\/\/my.roboforex.com\/en\/register\/prime\/\" class=\"block-banner__button\" target=\"_blank\" rel=\"noopener nofollow\">Open Prime Account<\/a>\n    <\/div>\n    <div class=\"block-banner__images-wrapper\">\n      <img decoding=\"async\" class=\"block-banner__image block-banner__image_desktop\" src=\"\/wp-content\/uploads\/2023\/09\/prime1-desktop.png\" alt=\"prime-account\">\n    <\/div>\n  <\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_use_financial_reports\"><\/span><a><\/a>How to use financial reports<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Having studies financial reports of a company or several companies, an investor can carry out a comparative analysis of their business. This is quite a simple thing to do.<\/p>\n\n\n\n<p>First, choose the companies you would like to compare, but make sure they are working in one sector or make similar products. It would be wrong to compare a company that produces heavy metals and an entertainment company. In such a case, comparison will be incorrect for a number of reasons.<\/p>\n\n\n\n<p>Draw a table of the indicators you are interested in. Thus you can assess the perspectives of development and potential profit from investments. As a rule, for comparison previous reports of both companies are taken, and comparative analysis is carried out that, among other things, helps assess potential <a href=\"https:\/\/roboforex.com/blog\/blog\/2020\/01\/31\/how-to-make-money-on-dividends-real-cases\/\" data-internallinksmanager029f6b8e52c=\"109\" title=\"Dividends\">dividends<\/a> and the market sustainability of the company.<\/p>\n\n\n\n<p>If the results of a company are disappointing, hold back from investing in it. Promising companies with innovative products can be an exception, but never forget about increased risks.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Which_indicators_are_normally_compared\"><\/span><a><\/a>Which indicators are normally compared?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Net profit<\/li>\n\n\n\n<li>Gross profit<\/li>\n\n\n\n<li>Operational profit<\/li>\n\n\n\n<li>Base EPS<\/li>\n\n\n\n<li>Cash flows from all business activities<\/li>\n\n\n\n<li>Current and non-current assets<\/li>\n\n\n\n<li>Liabilities, equities, and debts<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Where_to_find_financial_reports\"><\/span><a><\/a>Where to find financial reports<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To check and study a financial report of some company, you can search for it in open sources on the Internet or go directly to the website of the company.<\/p>\n\n\n\n<p>Let us study the example of the report of American Airlines Group. We go to its official website, choose the section For Investors (different companies may have slightly different names for the section).<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-1.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1160\" height=\"630\" src=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-1-1160x630.png\" alt=\"Where to find financial reports\" class=\"wp-image-11033\" srcset=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-1-1160x630.png 1160w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-1-360x196.png 360w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-1-768x417.png 768w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-1-1536x834.png 1536w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-1-150x81.png 150w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-1.png 1561w\" sizes=\"(max-width: 1160px) 100vw, 1160px\" \/><\/a><\/figure>\n\n\n\n<p>Choose the financial report for the previous period.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-2.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"322\" src=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-2-1200x322.png\" alt=\"Where to find financial reports\" class=\"wp-image-11035\" srcset=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-2-1200x322.png 1200w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-2-360x97.png 360w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-2-768x206.png 768w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-2-1536x412.png 1536w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-2-150x40.png 150w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-2.png 1895w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/a><\/figure>\n\n\n\n<p>Then you just need to study the information, apply comparison analysis, and see whether this company suits you.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-3.png\"><img loading=\"lazy\" decoding=\"async\" width=\"645\" height=\"630\" src=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-3-645x630.png\" alt=\"Financial reports American Airlines Group\" class=\"wp-image-11036\" srcset=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-3-645x630.png 645w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-3-205x200.png 205w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-3-768x750.png 768w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-3-150x147.png 150w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-3.png 962w\" sizes=\"(max-width: 645px) 100vw, 645px\" \/><\/a><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-4.png\"><img loading=\"lazy\" decoding=\"async\" width=\"644\" height=\"630\" src=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-4-644x630.png\" alt=\"Financial reports American Airlines Group\" class=\"wp-image-11037\" srcset=\"https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-4-644x630.png 644w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-4-204x200.png 204w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-4-768x751.png 768w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-4-150x147.png 150w, https:\/\/roboforex.com/blog\/wp-content\/uploads\/2021\/12\/AAL-4.png 956w\" sizes=\"(max-width: 644px) 100vw, 644px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bottom_line\"><\/span><a><\/a>Bottom line<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There is no reason for an investor to study the whole of financial report. Reports can contain up to 200 pages and some information meant for a very small number of people.<\/p>\n\n\n\n<p>An optimum way out is to choose several indicators and use only them. Note that you need to study the reports for the previous reporting period. To see the full picture, annual reports are usually used.<\/p>\n\n\n\n<p>When making decisions, investors are often perplexed by impulsive statements or negative news about the company. In this case, it will be safer to act based on digits and facts instead of emotions.<\/p>\n\n\n\n<p class=\"wp-block-button aligncenter\">\n<a class=\"button button-green\" href=\"https:\/\/my.roboforex.com\/en\/register\/\" rel=\"nofollow\">Open Trading Account<\/a><\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"<p>This article is devoted to financial reports of companies, their contents, period, and place of publication. We will see how this information can influence trading decisions.<\/p>\n","protected":false},"author":21,"featured_media":11031,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[29],"tags":[1149,2474,2473],"class_list":["post-11030","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education","tag-financial-reports","tag-stock-analysis","tag-stock-market"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Financial Reports: Key Reference for Investors<\/title>\n<meta name=\"description\" content=\"Navigate company financial reports: understanding their influence on trading decisions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/roboforex.com/blog\/blog\/2021\/12\/24\/financial-reports-of-companies-main-reference-point-for-investors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Financial Reports: Key Reference for Investors\" \/>\n<meta property=\"og:description\" content=\"Navigate company financial reports: understanding their influence on trading decisions.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/roboforex.com/blog\/blog\/2021\/12\/24\/financial-reports-of-companies-main-reference-point-for-investors\/\" \/>\n<meta property=\"og:site_name\" content=\"R Blog - 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