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What Is a Management Financial Report?

By Theresa Miles
Updated May 16, 2024
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A management financial report is the president or chief executive's periodic review of the financial condition of a corporation. It is typically presented to the board of directors or other stakeholders as part of a regular meeting. The report can address any issue of importance but will most likely detail the company's actual financial position at a particular point in the fiscal year as compared to projections. Used this way, it is very much like a financial progress report.

Corporate officers report to the board of directors who oversee corporate affairs on behalf of the company's shareholders. The board provides oversight and is not involved in the day-to-day management of the corporation. Daily operations are the responsibility of the corporate officers and the employees that work for the company. Like any supervisory body, the board requires updates and reports from the people under its authority to make sure that affairs are proceeding according to the plan for the year.

The board will set a meeting schedule for the fiscal year, which can be monthly, quarterly, bi-annually, or at any other interval that it chooses. At these meetings, the executive officers of the corporation are often required to detail the progress towards goals for the functional areas under their control, usually verbally or sometimes in writing. One of the reports presented to the board is usually the management financial report.

A corporation's management financial report contains information from the balance sheet, income statement, cash flow statement, and statement of owners equity as well as the sub-reports, manipulations, calculations, and ratio comparisons that can be derived from the company's accounting system. Typically, this all falls under the purview of the chief financial officer, who might be involved in the presentation. The president or chief executive will likely drive the presentation of conclusions or explain strategy and address course corrections.

Corporations also typically publish a written annual report once a year that addresses the financial condition of the company. This report is sent to shareholders and is available to the public. As part of this report, the president or chief executive can include a narrative management financial report that discusses and highlights the numerical results presented in the accompanying financial statements. This update to the shareholders is similar to management's update to the board, except it is always in writing.

Other instances where a management financial report would be relevant is at yearly shareholders meetings and during quarterly earnings calls. In both of these circumstances, corporate management has to present a progress report concerning the financial condition of the company to stakeholders. The report would contain a subset of the information regularly presented to the board, with the caveat that any confidential information or anything not appropriate for release to the public would be excluded.

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