Securities administrators are reminding investors of the value of the information in a company’s financial reports.

“Too often, investors fail to read and understand the annual reports of companies in which they invest. Annual reports are a valuable source of information that can help people make more informed investment decisions,” said Doug Hyndman, Chair of the Canadian Securities Administrators.

The CSA offert 10 tips on how to read between the lines of an annual report Among them are:

  1. Compare the activities reported by the company’s management with those that were outlined in the prospectus and the previous annual report. Significant changes could indicate that you should review your investment strategy.
  2. Verify whether the company’s business strategy is the same as that described in the prospectus and the last annual report. If it has changed, this could affect the performance of your investments, and
  3. If the annual report mentions strategic acquisitions made during the year, try to evaluate how they add value to the company and, at the same time, to your investments. Will these acquisitions have long-term effects? Will they help the company meet its objectives?