ACC100 Professor Hubbard
May 24, 2012
2011 Caterpillar Annual Report
Most everyone wanted to jump on the investment train this month with the release of Facebook’s Initial Public Offering (IPO). As a matter of fact, many people did buy stock in Facebook, trouble is, most of them will never be able to understand the paperwork they will receive while holding their shares. Every year publicly traded companies distribute what is known as their Annual Report, which is the yearly record of a publicly held company’s financial condition (Harvey). Throughout this paper we will go through Caterpillar’s annual report in an effort to better understand what we are reading. We will concentrate on four areas while we go through Caterpillar’s finances. First we will explain the main sections of the annual report. Next we will discuss the key factors that influenced the company’s financial performance during the year, as well as discuss the primary assets held by the company. Followed by an explanation of how management characterizes the internal control environment of the company.
Annual reports can be very difficult to read and understand, especially reports from large corporations. To the average individual investor, like the majority of the nation, an annual report is just several pages of numbers and dollar signs, dollars we all hope are growing. An annual report contains many different sections including stockholder information, auditor’s report, listing of board of directors, corporate address, and financial statements (Dunn, 2008). Once the report is broken down into these sections it begins to get a bit easier to understand. After the report is broken down we need to concentrate on what is most important to us, the financial statement. Since we are the investor we want to know if what we are spending our money on is truly worth it. The financial statement allows us to see what the... [continues]
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