The annual report is considered by some to be the single most important printed document that companies produce. In recent

years, annual reports have

become large documents. They now include such sections as letters to the stockholders, descriptions

of the business, operating highlights, financial review, management discussion & analysis, a discussion of internal controls,

segment reporting, inflation d

ata, and the basic financial statements. The expansion has been in part due to a general increase in

the degree of sophistication and complexity in accounting standards and disclosure requirements for financial reporting.

The expansion also is reflective

of the change in the composition and level of sophistication of users. Current users include not

only stockholders but also financial and security analysts, potential investors, lending institutions, stockbrokers, customer

s,

employees and

whether a compa

ny likes it or not

its competitors. Thus, a report that was originally designed as a device for

communicating basic financial information now attempts to meet the diverse needs of an ever

-expanding audience.

Users hold conflicting views on the value of annual reports. Some argue that they fail to provide enough information, whereas

other believe that disclosures in annual reports have expanded to the point where they create information overload. Others

argue that the future of most companies depends on a

cceptance by the investing public and by its customers; therefore,

companies should take this opportunity to communicate well

-defined corporate strategies.

QUESTION THAT NEEDS TO BE ANSWERED ( the company im doing is Netflix)

Select two types of information found in an annual report, other than the financial statements and accompanying

footnotes, and describe how they are helpful to the users of annual reports.