A more thorough explanation:

An annual report is a document that a company produces once a year to provide information about its financial performance to its shareholders and other interested parties. It is a comprehensive report that includes financial statements, management's discussion and analysis, and other relevant information about the company's operations.

For example, a publicly traded company is required by law to file an annual report with the Securities and Exchange Commission (SEC) on Form 10-K. This report includes a balance sheet, income statement, statement of changes in financial position, reconciliation of changes in owners' equity accounts, a summary of significant accounting principles, other explanatory notes, the auditor's report, and comments from management about prospects for the coming year.

Another example of an annual report is a non-profit organization's report to its donors and stakeholders. This report may include information about the organization's mission, programs, and financial performance, as well as stories and testimonials from people who have benefited from the organization's work.

Overall, an annual report is an important tool for companies and organizations to communicate their financial and operational performance to their stakeholders. It helps investors make informed decisions about whether to buy, hold, or sell their shares, and it provides transparency and accountability to the public.