The 7 critical items to read first in an annual report in 20 minutes (Part 9 of 9)

This is a series of articles describing how to quickly understand the key aspects of the annual report from a company that you have invested in with your hard earned money. This series started with an overview post on November 30, 2010.

The slow read

Now it is time to sit back and read the annual report slowly over the next few weeks. You know that you have already hit on the high points that are going to cause real concern. After you have looked at the previously described 7 items a few times, that entire exercise should take you no more than 20 minutes. Now you can spend time trying to truly understand the company and its revenue model.

It is important that this is a slow read. You don’t want to invest in a company that you don’t understand. When you read the report now, use a highlighter to mark important items. Take notes in the margins. You want to be a truly informed investor and be able to think about how the various actions by the market, global politics, and general business news will affect this company that you own. You should trust your managers to run the company effectively but you now have the opportunity to understand how and why they should be reacting to market conditions.

You don’t need to go into this depth for every report that the company puts out. Rather, once a year plan to spend several hours digging into the company via the annual report. This is your opportunity to really understand this company. It is your money, you need to be confident in your investment in this company.

Here are the links to all 9 posts of the series:

1. The 7 critical items to read first in an annual report in 20 minutes (Part 1 of 9)
2. The 7 critical items to read first in an annual report in 20 minutes (Part 2 of 9)
3. The 7 critical items to read first in an annual report in 20 minutes (Part 3 of 9)
4. The 7 critical items to read first in an annual report in 20 minutes (Part 4 of 9)
5. The 7 critical items to read first in an annual report in 20 minutes (Part 5 of 9)
6. The 7 critical items to read first in an annual report in 20 minutes (Part 6 of 9)
7. The 7 critical items to read first in an annual report in 20 minutes (Part 7 of 9)
8. The 7 critical items to read first in an annual report in 20 minutes (Part 8 of 9)
9. The 7 critical items to read first in an annual report in 20 minutes (Part 9 of 9)