Changes in Financial Position

This  section  of  the  report explains changes in working capital (current assets minus current liabilities) between two consecutive years. It goes by many names (including "Source and Application of Funds Statement" and "Source and Use of Funds Statement"), but basically performs as a bridge between a balance sheet of a company for those two years. It also summarizes how a company raised financings for the year and how those financings were used.

Report of the Auditor
Companies are legally required to choose an outside, independent accountant to represent shareholders and report to them on the company's Business each year. Essentially, the accountant's job is to verify the precision of the company's financial statements. The auditor's report is usually much summarized, and gives assurance to shareholders that the annual report is a dependable indication of the financial health of the company.

Notes to the Financial Statement
To end this section, interesting information is many times found in the notes to the financial statements in annual reports. It is advisable for you to study these carefully, as they will sometimes disclose details of law-suits which were filed against the company, or other information which can be useful to investors.