The 10-K filings of companies in the U.S. can be retrieved from the SEC EDGAR database, as shown below. The 10-K filing deadline varies, depending on the size of the company. Firms worth $700MM or more have 60 days to file after the close of their fiscal year. Both documents are important when analyzing a company, although the 10-K is usually preferred by analysts, given its more comprehensive nature. “The SEC requires different things you must disclose,” says Adam Finerman, a lawyer and co-leader of the IPOs and securities offerings team at BakerHostetler.
Also, the 10-K can be overwhelming as the document often exceeds 100 pages in length. That said, in addition to other data investors gather on a company, the 10-K provides critical information investors need to assemble an investment puzzle. Here, management discusses the operations of the company in detail by usually comparing the current period versus prior period. These comparisons provide a reader an overview of the operational issues of what causes such increases or decreases in the business. Requires the company to explain certain comments it has received from the SEC staff on previously filed reports that have not been resolved after an extended period of time. Check here to see whether the SEC has raised any questions about the company’s statements that have not been resolved.
- The size of a company’s public float, which is the value of its common shares not held by its affiliates, determines how much time a company has to file its 10-K or 10-Q.
- In the final section, the 10-K concludes with signed letters from the CEO and CFO certifying that all of the information in the filing is accurate to the best of their knowledge.
- Here, the company lays anything that could go wrong, likely external effects, possible future failures to meet obligations, and other risks disclosed to adequately warn investors and potential investors.
Item 1 “Business” requires a description of the company’s business, including its main products and services, what subsidiaries it owns, and what markets it operates in. This section may also include information about recent events, competition the company faces, regulations that apply to it, labor issues, special operating costs, or seasonal factors. This is a good place to start to understand how the company operates. Most investors, however, are generally concerned with Part II, i.e., the financial data contained within the document, because it provides them with information for a sound basis to invest in a stock. For an investor looking to buy bonds, debt should be a particular concern.
Definition and Examples of Form 10-K
Many forms of debt can make a company go bankrupt that do not show up on the balance sheet due to accounting rules. But the law requires the payments to be disclosed in the Form 10-K filing. Financial statements, such as the income statement facts on the specific identification method of inventory valuation and balance sheet—which show you how much money a company made, its debt levels, and other important data—are the most important part of the Form 10-K filing. Together, they allow you to see what is going on with a company’s finances.
As an investor, it is up to you to decide how much weight to give to non-GAAP measures. Here are examples of how an MD&A may discuss risks that the company faces. Item 4 ”Mine Safety Disclosures” requires disclosure, if applicable, of. You must never forget that with a stock, you are buying ownership in a business. A financial professional will offer guidance based on the information provided and offer a no-obligation call to better understand your situation.
- By contrast, 10-Ks tend to be very lengthy and more difficult to digest than annual reports.
- It contains information such as the firm’s financial position, debts and other liabilities, and corporate governance, all key to know for a would-be investor.
- Ask a question about your financial situation providing as much detail as possible.
- Large accelerated filers have a public float of $700 million or more and are required to file within 60 days of the end of their fiscal year.
- Item 3 “Legal Proceedings” requires the company to include information about significant pending lawsuits or other legal proceedings, other than ordinary litigation.
Many companies include them in the investor relations section of their website. Once you’ve found the company you’re looking for, EDGAR shows search results in chronological order and identifies the filing by form type. A 10-K filing also includes signed letters from the company’s chief executive officer and chief financial officer. In it, the executives swear under oath that the information included in the 10-K is accurate.
On the first page, the number of shares outstanding is listed as of the published date of the report. Investors will notice that this share count differs from the numbers used to calculate the earnings per share on the statement of earnings. The number of shares outstanding used in the statement of earnings is the average shares outstanding during the period, not the ending value. In addition, investors like to look at certain financial ratios to determine whether financial performance is improving or declining. The comparison across multiple years makes this information very helpful.
Understanding SEC Form 10-Q
Companies with more than $10 million in assets and a class of equity securities that is held by more than 2000 owners must file annual and other periodic reports, regardless of whether the securities are publicly or privately traded. If a shareholder requests a company’s Form 10-K, the company must provide a copy. In addition, most large companies must disclose on Form 10-K whether the company makes its periodic and current reports available, free of charge, on its website.
The form provides investors with various details about a company, including its history, senior management, financials, and risk factors. In Part II of the 10-K, you’ll want to make note of the management’s discussion and analysis. In here, management discusses its perspective on business results over the past 12 months. Management may also discuss risks in more detail and provide explanation for how the organization is addressing them. The form 8-K though is required by the SEC whenever companies announce major events of which shareholders must be made aware. The government requires companies to publish 10-K forms so investors have fundamental information about companies so they can make informed investment decisions.
Form 10-Q FAQs
In addition, a company’s CFO and CEO must certify to the accuracy of the 10-K and 10-Q. You should be able to access a firm’s annual report, even if you’re not a shareholder. The 10-Q is like the 10-K, but it covers only a quarter’s worth of financial data. It contains much less detail than the 10-K, due to the short measurement period. It can be very useful from time to time if you’re looking for short-term changes in a company. A 10-K is plain in appearance and uses simple words but is more detailed since the disclosure of certain information is required by law.
Part 2: Your Current Nest Egg
Here, the company discloses any significant pending lawsuit or other legal proceeding. References to these proceedings could also be disclosed in the Risks section or other parts of the report. This letter should detail the scope of the auditing firm’s certification of the financial records, as well as any material deficiencies it uncovered. If the auditor thinks the company could face imminent demise, you might see the auditor referencing a question as to the company’s ability to “continue as a going concern” or something similar. If you ever come across something like those words, alarm bells should go off. Item 13 “Certain Relationships and Related Transactions, and Director Independence” includes information about relationships and transactions between the company and its directors, officers and their family members.
Items in the Quarterly Report on Form 10-Q
A 10-K is a disclosure form required by the SEC for all publicly traded companies. It contains information such as the firm’s financial position, debts and other liabilities, and corporate governance, all key to know for a would-be investor. Sometimes companies will publish for their shareholders an annual report, which is often a distillation of their Form 10-K.
Financial statements
Investors can use the form to get a sense of its quarterly earnings and other elements of its operations, and to compare them to previous quarters—thus tracking its performance. Finally, non-accelerated filers are companies with less than $75 million of public float. These companies have 45 days from the end of the quarter to file the 10-Q. To meet this requirement, the organization must have at least $700 million in public float. If the company meets this requirement, it has 40 days after the close of the quarter to file its 10-Q. The deadline for filing a 10-Q varies and depends on the number of outstanding shares a company has.