Annual Reports and Accounts: Corporate PR Hype or a Useful Resource?
Hancock, Margaret, Teaching Business & Economics
Company annual reports and accounts can be very glossy publications, nice to handle and often full of eye-catching images. They are a good resource to wave around when talking about the legal requirements for public limited companies. And, of course, they are particularly useful to place casually around the room to impress prospective students and parents on open evenings. But a company annual report can also be a useful classroom resource.
The material inside annual reports can be daunting even to experienced teachers. The accounts never look quite like they do in the textbook - although there is the occasional high when you hit the jackpot on finding a balance sheet or profit and loss account that you can actually use for ratio analysis. (See Ian Marcousé's article on page 4 for ways to make accounts more accessible to students.) Despite that, you don't have to be an investment analyst, city financier or chartered accountant to make meaningful classroom use of these free, readily available and attractive resources.
The panels in this article (on pages 9-12) show how annual reports can be used to help your students develop their skills of application and analysis across a wide range of topics. The ten suggestions are designed to encourage students to think more deeply about business - so that instead of simply regurgitating standard theory they actually apply the issues to a specific business.
One suggestion in this list does require the use of ratio analysis, and is suitable for the more able A level student, but it approaches the topic from an unusual and potentially more interesting angle, and aims to enhance students' understanding that ratio analysis is simply a tool to study relationships. Much of the remainder can be tackled without students even having to reach the intimidating pages of accounts.
An attempt has been made to rank the questions and activities in order of difficulty, with the first suggestions being accessible to most GCSE students, and then a progression through to challenges which require more advanced skills.
An alternative approach would be to ask more able students to work in groups to identify points of interest from a report to stimulate their analytical and evaluative thought. Students could discuss how information within a report could support an argument addressing a particular aspect of the specification applied to that particular business. For example, by browsing through reports, students are likely to come across:
* evidence to offer an assessment of the company's attitude to customer service (see, for example, Bovis Homes pic 2007 report)
* information on the company's workforce details (see, for example, Go-Ahead pic report for the year ended June 2007) - students could consider the problems (and advantages) presented by the size of the workforce or the particular skills required by this business
* sufficient information, supplemented with students' own knowledge of the industry, to create a SWOT analysis (see, for example, Alexandra pic 2007 report). …