How to research a prospective employer: Step 2 – analysing the annual report

Anthony Haynes writes: Whether you are preparing to apply for a job or simply deciding whether to do so, our experiences of working with candidates suggest that it’s worth investing time in doing your homework. In particular, it’s worth researching the employer so as to develop a 360 degree picture of them. Each day this week we are publishing a practical tip for doing so.

Step 2: Analyse the annual report — the words and the numbers 

Many organisations publish their annual reports on their websites (often in a ‘For investors’ section).

Reports can always be downloaded from Companies House:

Reports include both verbal and quantitative information. The amount of verbal information has tended to increase over the years as organisations attempt to spin the figures or even distract attention from them.

Obviously the chair person’s statement needs therefore to be read sceptically. Yet this does make the statement worthless — simply understanding how an organisation is attempting to present itself is useful. And, at best, the statement reveals what the organisation is enthusiastic about or proud of.

To interpret the numbers in the financial section expertly is difficult. But reading them inexpertly can still prove valuable. You don’t have to be an accountant or investment analyst to be able to make some sense of the data.

The BBC has published a short guide here:

If you do nothing else, consider the organisation’s profitability and cash situation. Is the organisation generating cash or burning it? How strong are the cash reserves in relation to the cash flow and annual profit or loss?

Also look at any available employment data: what is happening to the number of employees and their average remuneration.

Referring the annual report during an interview can make a good impression, suggesting diligence and professionalism on your part.


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