Another interesting bunch of people reading the annual report are the competitors. They are generally looking to see how you’re doing, what are the financial ratios, market share etc. Something they also always look at is how much are you earning and what is your gross margin.

As you may have guessed, it is a fine balance this sharing information part in your annual report. On one hand the legislation, accounting and reporting framework ask you to disclose as much as possible to enable readers make just decisions. The regulation usually asks to also disclose information that is more or less confidential or something you certainly don’t want competitors to know. Either it is rental agreement terms, loan information, acquisitions pricings etc.

Whereas the regulation asks for more, you feel that less should be disclosed. It is completely understandable that some information should be treated as secrets of business and not shared with public. It may be that this threatens the whole deal, employees or whatever this situation is about.

So to summarize – there’s a simple rule – as much as needed and as few as possible. It is a fine balance and in practice it’s touched on everyday basis.

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