What is meant by a 10-K ?
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-K is a comprehensive report submitted annually by a
publicly traded company on its financial performance and is required by the
United States Securities and Exchange Commission (SEC). The report contains
much more detail than a company's annual report, which is sent to its
shareholders before an annual meeting to elect the company's directors.
Some of the
information a company is required to document in 10-K includes its history,
organizational structure, financial statements, earnings per share, subsidiaries,
executive compensation, and any other relevant data.
The SEC
requires this report to keep investors aware of a company's financial condition
and to allow them to have sufficient information before buying or selling stock
in the company or before investing in the company's corporate bonds.
Understanding 10-Ks
Due to the
depth and nature of the information they contain, 10-K's are quite long and
tend to be complicated. But investors need to understand that this is one of
the most comprehensive and important documents a public company can publish on
an annual basis. The more information they can glean from 10-K, the more they
can understand the company.
The
government requires companies to publish 10-K forms so that investors have
vital information about the companies so they can make informed investment
decisions. This module provides a clearer picture of everything a company does
and the type of risks it faces.
The 10-K comprises five distinct sections:
Business:
This
provides an overview of the main operations of the company, including its
products and services (that is, how it makes money).
Risk factors:
These
outline all the risks the company faces or may face in the future. Risks are
generally listed in order of importance.
Selected financial data:
This section
provides specific financial information about the company for the past five
years. This section presents a more short-term view of the company's recent
performance.
Discussion
and analysis of the management of the financial condition and the results of
the operations. Also known as MD&A, this gives the company the opportunity
to explain the previous fiscal year's business results. This is the section
wherever the corporate will tell its story in its own words.
Financial statements and supplementary
data:
This
includes the company's audited financial statements, including income
statement, balance sheet and cash flow statement. Also included in this section
is a letter from an independent auditor of the organization demonstrating the
extent of it’s verification.
A 10K filing
also includes letters signed by the company's CEO and CFO. In it, executives
swear that the information contained in 10-K is correct. The letters became a
necessity after a series of high-profile lawsuits regarding account fraud
following the dot-com bankruptcy.
Where to find a 10-K
In
particular, 10K documents are readily available through public information and
various sources. In fact, a number of companies include them in the Investor
Relations section of their website. The data included in the 10K can be
difficult to navigate around, but the more investors become familiar with the
layout and the information included in the data, the easier it will be to
identify the most important detail.
Take a
look
A 10-K is a
comprehensive report submitted annually by public companies on their financial
performance.
The report
is required by the United States Securities and Exchange Commission (SEC) and
is much more detailed than the annual report.
Information
in 10-K includes company history, financial statements, earnings per share, and
any other relevant data.
10K is a
useful tool for investors to make important investment decisions.
Deadlines for submitting 10-K
The deadline
for submitting 10 depends on the size of the company. According to the SEC,
companies with free found 700 million or more publicly available for business-
including public free flats - must file 10 of them within 60 days of the end of
their fiscal year. Companies have between 75 million to 700 700 million,
floating companies have 755 days, and companies with less than 5 5 million have
90 days.
Forms 10-Q and 8-K
Along with
10-K, the SEC requires public companies to submit forms 10-Q and 8-K regularly.
Form 10-Q
has to be submitted to SEC on quarterly basis. This module includes a
comprehensive report on an organization's performance and relevant information
on its financial position. Unlike the 10-K, the
information in the 10-Q is usually not verified. The company is only required
to present it three times a year since the 10-K is presented in the fourth
quarter.
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