The 10-K is a comprehensive annual report that publicly traded companies in the United States are required to file with the Securities and Exchange Commission (SEC). In this article, we’ll define what a 10-K is, what’s included in it, how to read it, and where to find it.
What is a 10-K?
The 10-K is a mandatory filing that public companies must submit to the SEC every year. It provides a comprehensive overview of the company’s financial performance, management structure, and other key information that is important to investors.
The purpose of the 10-K is to provide investors with detailed information about the company’s operations, risks, and financial health. It also includes audited financial statements that have been reviewed by an independent auditor.
What’s included in a 10-K?
A 10-K filing typically includes the following sections:
- Business Overview: This section provides an overview of the company’s business, including its history, products or services, and competitors.
- Risk Factors: This section identifies and discusses the risks and uncertainties that could affect the company’s business and financial performance.
- Management’s Discussion and Analysis (MD&A): This section provides management’s perspective on the company’s financial performance over the past year and its future prospects.
- Financial Statements: This section includes the company’s audited financial statements, including the balance sheet, income statement, and cash flow statement.
- Notes to the Financial Statements: This section provides additional details and explanations related to the financial statements.
- Management and Board of Directors: This section provides information about the company’s executive officers and board of directors.
- Executive Compensation: This section provides information about the compensation of the company’s top executives.
- Ownership and Related Party Transactions: This section provides information about the ownership of the company’s stock and any related party transactions.
- Legal Proceedings: This section provides information about any pending or potential legal proceedings involving the company.
- Other Information: This section may include information about the company’s subsidiaries, corporate governance practices, or other relevant information.
How to read a 10-K?
The 10-K is a dense and technical document, but there are several key sections that investors should focus on when reading it:
- Business Overview: This section provides an overview of the company’s business and competitors. It can help investors understand the company’s operations and the competitive landscape.
- Risk Factors: This section identifies and discusses the risks and uncertainties that could affect the company’s business and financial performance. It can help investors understand the potential risks associated with investing in the company.
- Management’s Discussion and Analysis (MD&A): This section provides management’s perspective on the company’s financial performance over the past year and its future prospects. It can help investors understand the company’s financial performance and growth potential.
- Financial Statements: This section includes the company’s audited financial statements, including the balance sheet, income statement, and cash flow statement. It can help investors understand the company’s financial health and performance.
- Notes to the Financial Statements: This section provides additional details and explanations related to the financial statements. It can help investors understand the accounting policies and practices used by the company.
Where to find a 10-K?
Publicly traded companies are required to file their 10-K with the SEC, and the filings are publicly available on the SEC’s website. The SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system is the primary source for accessing 10-K filings.
Investors can also find 10-K filings on the company’s website or through third-party financial websites like Yahoo Finance or Google Finance.
Conclusion
In summary, the 10-K is a comprehensive annual report that public companies must file with the SEC. It provides investors with important information about the company’s business, financial performance, risks, and management structure. When reading a 10-K, investors should focus on key sections like the business overview, risk factors, MD&A, financial statements, and notes to the financial statements. The 10-K can be accessed through the SEC’s EDGAR system, the company’s website, or third-party financial websites. As an investor, understanding how to read and analyze a company’s 10-K can help you make informed investment decisions.
