Writing financial reports

Financial reports give information about the financial position of a business.
In addition to the financial statements in the report, many companies also write notes to explain items on the statements. This article gives you useful vocabulary and tips for writing these notes.

Comparing results

compared to
"There has been a 5.25% rise in prices, compared to last year, when the rise amounted to only 2.25%."

in comparison with
"In comparison with last year's profits, there has been a drop of 6.25%."

whereas
"Whereas prices have risen, profits have fallen."

in spite of / despite
"Despite increased market share, profits have fallen."

in addition to
"In addition to increased labour costs, raw materials have also increased in price."

although
"Although market share has increased, profits have fallen."

similarly
"Labour costs have risen. Similarly, the price of raw materials has gone up."

however
"Our market share has increased. However, profits have fallen."

Explaining figures

due to
"The 5.25% drop in profits is due to two important factors: increased costs and a shrinking market."

result from
"The disappointing figures result from increased costs."

to be a result of
"The drop in profits is a result of increased costs."

account for
"Increased labour costs account for the loss of profit."

lead to
"The rise in prices has led to a corresponding drop in profits."

explain
"The increase in labour costs explains the drop in profits."

be a consequence of
"Low profits are a consequence of high costs."

contribute to
"The increased labour costs contributed to the overall drop in profits."

Using the right preposition

an increase of…
"There has been an increase of 10.25% in the cost of raw materials." (Also a rise of, a fall of, a surplus of and so on.)

to increase by…
"Profits have increased by 10.25% in the last quarter." (Also, to rise by / to, fall by and so on.)

Using the right tense

1. Past Simple
Use this tense when you are writing about a time that is now finished.

"2006 saw a large profit."

"In 2006, profits increased."

2. Past Continuous
Use this tense when you are describing what was happening over a period of time in the past.

"This time last year, the company was growing by 3.25%."

3. Present Perfect
Use this tense when there is a connection with the present.

"Over the last two months, prices have fallen." (They started to fall two months ago and are still falling.)

"Costs have risen this year, leading to a loss in profits." (This year hasn't ended yet.)

4. Present Continuous
Use this tense when you are describing a trend that is still happening.

"Prices are still rising."

Useful vocabulary

make a profit
"The company has made a profit this year."

make a loss
"We made a loss last year."

factor
"One important / major factor is the increased marketing costs."

reason
"There are two main reasons for the fall in profits."

make an impact on
"The economic situation has made a significant impact on profits."

affected by
"Production was affected by industrial action."

take into account
"If we take into account the increased cost of labour…"

underlying
"The underlying cause of the drop in profits is the economic recession."

"Economic recession is the underlying factor in the drop in profits."

represent
"These figures represent a total loss of $1 million."

amount to
"The losses amount to $1 million."