Management Discussion and Analysis (MD&A)
Candlefocus EditorMD&A serves the important role of informing readers about the reason for success or failure of a company's operations, as well as any forward-looking information that might give investors insight into future performance. It also provides an explanation of items of significance that are possibly outside of general financial results.
Management’s perspective of the company’s overall performance, future plans and goals, and accomplishments is communicated through the MD&A section. Executives use their best judgment to describe the factors that led to or will lead to their success or failure. The MD&A section allows companies the opportunity to take responsibility for performance, discuss their future strategies, and build trust with investors.
Since the MD&A section is not audited, investors should be aware that the section reflects the views and opinions of management only and is not to be taken as absolute truth. As such, management can choose to omit details they deem sensitive, or that they feel are unfavorable to the company's financial outlook.
Management Discussion and Analysis sections are an important part of the overall financial statement of the company. Through the MD&A, investors gain access to the inside perspective of top company leaders, as well as their plans for the future. While the MD&A section provides investors with valuable information, investors should remember that it is unaudited and as such does not guarantee accuracy in its assessment of the company’s performance and future plans.