The annual reports of publicly traded companies are full of useful information, and reading them is a great way to develop your understanding not just of those companies, but of business generally.

Though all the information is valuable, there are three sections of particular importance: the letter from the CEO, which highlights major accomplishments and important strategy, the management discussion and analysis, or MD&A, which details elements of the company’s performance and provides context for industry challenges, and the financial statements, where you’ll start to see how strategy translates into reported numbers.

In this Three Things video, Darden Professor Paul Simko explains how useful a look at annual reports can be.

About the Expert

Paul J. Simko

Frank M. Sands Sr. Associate Professor of Business Administration

Simko is an authority on capital markets, financial accounting, corporate financial reporting and disclosure, and enterprise risk management.

Broadly, Simko’s research examines issues related to financial accounting information. He is particularly interested in topics related to how alternative accounting treatments affect the decisions of investors and financial analysts and how investors assess firms’ earnings quality. His current research examines the incentives and consequences of earnings management and valuation issues pertaining to earnings volatility and growth.

B.A., M.Acc., University of Florida; Ph.D., University of Texas at Austin