Volume 9, No. 4

A User's Guide To 1999 Annual Reports - Part II:  New Economy, Old Economy; bifurcated stock markets; e-companies, e-commerce, e-world; B2B; punishing market volatility. There are so many distractions in the world of the analyst or investor these days that it’s easy to forget a basic truth: the capital markets are merely places where security interests in real companies trade every day. The markets wouldn’t exist as we know them if investors didn’t make judgments about the accomplishments of those companies, based on the reporting of those accomplishments. Financial reporting is the grist for the information mill that drives the markets.

It’s the time of year when the most comprehensive, informative financial reporting is made available to the analysts and investors of the world: it’s the start of the annual report season. With the stock market’s recent breath-taking swoons and dizzying ascents (depending on which market you’re observing: Old Economy market or New Economy market), it’s a cinch that annual reports will be swept aside by many players with more than the usual disdain. After all, 1999 is over; who cares what happened? It’s only the future that matters.

Past performance is no guarantee of future results. And history doesn’t repeat itself, but it often rhymes. Before getting carried away with imagining what a firm might accomplish in the future, an investor ought to understand how a company made its mark in the current year. See what you can learn from the 1999 financial statements, with this guide to help you find some of the more critical areas.

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