Numbers Have a Story

Companies that explain the numbers in their financial statements along with a context of the direction and strategy behind them understand that numbers by themselves do not always present a coherent narrative.

- ANTONIO SAMSON

The company can present a narrative that connects the dots in a positive way.

Do companies that win the best annual report awards also perform better in the market? And conversely, do those that prefer to let rumors swirl around them uncorrected or even enhanced receive the proper valuation in the market?

The task of explaining the numbers and how they compare with the previous quarter is delegated to the CEO or the now-established investor relations head. These company officials are expected to be comfortable with financial ratios and even the broad economy and competitive picture. They can field questions from investors and research units of financial institutions.

But can they tell the story behind the numbers?

The narrative that emerges is supposed to make sense of the numbers. That this function by default ends up under the finance group, which often oversees the investor relations function, means that the one in charge of making sense of the metrics tends to have a financial or accounting background.