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Management’s Discussion and Analysis


Making your MD&A More Valuable to Users

Issuance of a management’s discussion and analysis (“MD&A”) is required for all publicly accountable reporting issuers by the respective securities commissions under which the financial statements are issued. Many companies feel that the MD&A is an obligation, but we feel that this is an opportunity to showcase your Company. The following are helpful hints to make the most of your MD&A.

1. Management’s Perspective
The MD&A is management’s opportunity to provide supplementary and forward-looking financial information to the users beyond the typical numbers and disclosures of the financial statements. Users also want to know about the issues and business risks that are important to Management – make this the focus.

2. Forward Looking Information
It is important to keep a prospective tone when writing your MD&A. Inform the users what the goals and risks of the Company are and tangible steps that the Company is doing to achieve its goals and manage risks. Let them know that your Company is moving forward and give potential investors a reason to invest in your Company.

3. The “Why”, not the “What”
When reviewing the financial results of the past year, the focus should be on giving the users supplementary information to what they can get from reading the financial statements. What this means is to provide the “why” to the financial results, and not focus on simply what the results were. Your MD&A needs to provide substance to the readers.

4. Relieve the Last Minute Headache
Often times the MD&A is the last step of the process, put together after the financial statements have been prepared, or simply rolled forward from the prior reporting period. Development of the MD&A should be an on-going process – start at the beginning of the period and work on it throughout the period - this will relieve the last minute headache.

5. Transparency
Transparency is a very important aspect of financial reporting today. Investors do not want to see an exaggerated spin on the financial results. Be honest and upfront with your users.

6. Keep it Simple
Use easy to understand, plain language that the average user will follow.

For more information, please feel free to contact me or your local MNP advisor.