An annual report is a document prepared by public incorporations annually to describe their performance on their operations and financial status. The firm’s Chief Executive Officer (CEO) writes a letter in the report on concern to the company’s owners. The information should be an impressive combination of graphs, tables, diagrams, and narratives to explain its activities in the past year of operation on the front pages. The firm’s financial and operational information should also be detailed. The presentations help in the decision-making process of the stakeholders.
This paper will focus on Verizon and Sprint Incorporations’ annual reports, giants in the USA’s telecommunications industry. 2019 financial year will be analyzed, including how the data differ for the organizations, how clear their presentations were, and their plans, challenges, and goals. Moreover, discussions on the format and organization for both firms’ reports are available.
The two corporations’ annual performances are different, with Sprint using a traditional organization, whereas Verizon uses the modern one. The traditional report entails analyzing the financial statement using the balance sheet and profit and loss account. On the other hand, the modern approach contains more detailed information, such as Cash Flow Statement, Ratio Rates, Budgetary Control, Balance Sheet, and Funds Flow Statement.
Verizon used a more reliable approach than Sprint since their report was more informative as it gave well-analyzed financial statements. The modern way is more presentable as it is new and provides more data to the owners. Sprint used a simpler way to prepare its reports as compared to the other company. Verizon’s approach has more benefits in the areas where it is applied since it provides more information on management efficiency position, profitability, and solvency position. The organizational differences are clear from the reports of the two corporations.
The companies presented their data in an excellent and clear way. The statements have provided a comparison for the financial positions of the firms for different years, which will help shareholders to make conclusions about the performance of the firms for each year. There are several financial portions in the reports that are simplified for easy reading by shareholders. For instance, Verizon’s dividends per share are declared to have increased by 2.1% in 2019, from $2.385 (in 2018) to $2.435 (Verizon Inc., 2020).
The thorough representation of the information and the results could lead to these firms ignoring how the presentation appears. However, both incorporations used diagrammatic representation to make their reports more meaningful. The analysis being coherent, the shareholders can see the progress of the firm and help them understand the corporations’ financial and operational position.
The managers’ goals, plans, and challenges are discussed and aimed at by analyzing the results from the annual reports. The top managers in both companies give a guideline on the firm to continue growing. Some goals have been achieved, with Verizon gaining an increased market share and increased profitability from the past years. There are plans for both companies to enter new markets and expand their market to increase their profits for the coming year. Verizon had its report emphasis on the need for enhancing humanity. Sprint incorporation stated five main areas to invest in to help it become a premier company in the communication industry. Verizon also had its five key points to focus on for its growth.
Some of the goals for Verizon were to improve response to emergencies, safety for the public, and reducing pollution. Both companies focus on growing by implementing the new tactics in each of their departments separately. The companies faced several operational challenges, especially when the pandemic reached the country, due to the restrictions that were in place. The Sprint corporation report gives future maturities of their capital lease obligations and long-term debts to be $ 4,455 million for the year 2019 (Sprint Inc.,2019). This analysis is essential to the shareholders when they are making future investment decisions for the company. The customer lease programs may lead to potential losses and thus affect the company’s balance sheet. The plans are put in place to ensure the challenges are surpassed for the firms to achieve their objectives.
The format and organization applied in the writing of the reports for both companies are clear and well arranged. Verizon utilized modern methods for the preparation and presentation of its annual report. Sprint used their traditional format that most companies are avoiding in doing their reviews. The modernization of the information by Verizon makes it exceptional to enhance its public image, thus it may be more attractive to interested parties compared to the other company’s results. On the other hand, the graphical representations of the data gave a clear overview since if the data is poorly calibrated, the reader can easily misinterpret it (Hellmann et al., 2017Â). The overall formats and how the reports are organized are done well for both companies.
In conclusion, the two companies presented their yearly reports in a professional and well-designed format and organization. Verizon presented its vision in the analysis in the interest of attracting more investment through selling its information. The impression that the report was given enough time and effort makes one review it and quickly get drawn to Verizon compared to Sprint. How the data is presented provides the interested partners with detailed information that they can use to make decisions on whether to invest in the firms.
References
Hellmann, A., Yeow, C., & De Mello, L. (2017). The influence of textual presentation order and graphical presentation on the judgments of non-professional investors. Accounting and Business Research, 47(4), 455–470. Web.
Verizon Inc. (2020). 2019 Annual Report. AnnualReports. Web.
Sprint Inc. (2019). 2019 Annual Report. AnnualReports. Web.