Blog ·
How to read annual report figures without over-reading them
The business registration annual report is public and one of the easiest documents to obtain - but its biggest trap is treating self-reported figures as verified ones.
Remember one thing first
The operating figures in an annual report are filed and published by the company itself, and are not verified line by line afterwards. So the right way to use them is as leads: to spot questions and raise them, not to reach conclusions.
Which columns are worth reading across several years
| Column | Why it is worth reading across several years |
|---|---|
| Headcount / social insurance count | A sudden doubling or drop usually tracks a real change in the business |
| Operating revenue | A single year means nothing; the trend does |
| Total assets | Compare it against claims such as "we have our own line and inventory" |
| Contact details and address | If it changed, ask why; if it did not, check whether a whole floor is shared |
The cell most often misread
"A single-digit social insurance headcount" is not a conclusion. It could mean production is outsourced, it could mean labour dispatch, and it could simply mean the company really is that small. It is worth asking "where is the line, and who runs it" - but on its own it settles nothing.
Popular
- A "factory" with single-digit headcount - what the records can and cannot sayCase studies
- Five red flags - and what each one actually meansBlog
- "Before you pay, check one thing: the account name"Blog
- Five checks before you wire money to a Chinese supplierInsights
- When the deposit goes to a personal name - where to stopCase studies