Chapter XV
CORPORATION FINANCIAL REPORTS
The annual report of a corporation is usually mailed to each
stockholder. The report, as commonly gotten up, contains practically
nothing except a brief statement by the president in
regard to the last year's business, together with the balance sheet
and operating statement furnished by the accounting officers of the
company, and perhaps an audit by some firm of certified public accountants.
The report sent to a stockholder is essentially in that
form necessary for the auditor to check the financial figures and to
certify to their being in balance and correct.
Though the balance sheet and operating statement, with the letter of approval by the certified public accountant, are necessary and desirable, they do not contain, in themselves, the information most desirable and most intelligible to the average stockholder. What the stockholder needs most is a report from which he can make comparison with preceding years. The bankers and large investors who can preserve in their files annual reports of a corporation over a long period of years probably number less than one per cent of the total number of stockholders to whom the annual reports are sent. It is only in very large, well managed offices that a file of corporation reports is made so that a complete set of reports for a long period of years is available for comparison with any new report which may be received. The average stockholder cannot preserve his annual reports from year to year in such manner that he can lay his hands on the earlier reports, and thus compare the last report with the record of preceding years. Even if every stockholder should have some yet uninvented type of filing system by which everything is preserved and everything can be found instantly when needed, that would not solve the problem. Stockholders are changing so rapidly that, of the total number of stockholders to whom reports are sent in any one year, a comparatively small percent-
