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MEMO To: From: Date: Subject: B. R.

Neal, Director of Marketing Challa Fletcher June 19, 2012 Contents of an Annual Report

Congratulations on the increased sales as a result of the marketing department. The hard work of the division has increased revenue for the organization, product popularity, as well as increased the number of stocks held by the very consumers we service. These new stockholders are not as well versed in the information pertaining to the annual report, which they receive as a part of their new stock purchases. The annual report consists of the balance sheet, earnings statement, the stockholders equity, and the statement of cash flow. This memo will briefly explain these four major components of the annual report; giving the marketing center more information to assist the clients in need of information. The balance sheet reconciles the firms assets, liabilities, and the stockholders equity. It is compared to the previous years balance sheet to exemplify growth, or decline, in the organizations efficiency. The income statement shows how the organization has been operating over the fiscal year with the breakdown of revenue and expenses. This statement will show how profits have increased/decreased during the previous fiscal year. These two statements are paired with the statement of cash flow to define more specifically the continuous influx of cash. This statement includes the financial data of investments, as well as operating cost and financing. This report will explain from where revenue is being obtained. The stockholders equity statement explains to the stockholders how their investment is working, how the funds are reinvested in the company, and how much of the revenue will be paid in dividends to the stockholder at the end of a specified time period. Most common stock do not yield dividends, rather these funds are reinvested into the organization. The stockholders equity statement will show the value of the stocks purchased and can serve as a tool in the stockholders decision to purchase additional stock or sale owned stocks. This information will allow the marketing call center team to answer basic annual report questions from the clients. If the stockholder has any further questions you should direct them to the Finance Department. This department is equipped to explain the subcategories of the annual report, such as: what equipment is being held for sale, how depreciation is determined, and what other investments the company is utilizing with its retained earning or market securaties. The finance depoartment may be contacted at 501-555-1234. Good luck and again congratulations on making this organization better every day.