Writing a 10-K typically involves input from multiple departments within an organization. The investor relations team might take the lead, but there is likely input from management, finance, and also external groups like a third-party auditor. The SEC does not write or verify a company’s 10-K; it just requires them to be filed. “The challenge with the risk factors is that they are addressing the known risks,” Davis explains. For example, five years ago, most companies weren’t writing about a potential pandemic. The goal is to give as complete a picture as possible, but not everything can be predicted.
By contrast, 10-Ks tend to be lengthy and more difficult to digest than annual reports. 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 number of shares outstanding during the period, not the ending value. Often companies with either multinational operations or multi-segment businesses separate the operational results from the consolidated results so investors can analyze the growth drivers for the company.
Once general knowledge of the industry and company is obtained, more company-specific information can be ascertained in Part II, the MD&A section. If you are a beginner trader and would like to know more about the information included in the Form 10-K, this Investfox guide is for you. My Accounting Course is a world-class educational resource developed by experts to simplify accounting, finance, & investment analysis topics, so students and professionals can learn and propel their careers. Shaun Conrad is a Certified Public Accountant and CPA exam expert with a passion for teaching. After almost a decade of experience in public accounting, he created MyAccountingCourse.com to help people learn accounting & finance, pass the CPA exam, and start their career. Any information about relationships and transactions by the company with directors, top officials, and family members should be disclosed in Item 13.
However, companies often have greater control over not only which information to present but how to present it. The design and the intent of the annual report are distinctly separate from the 10-K. The annual report is more of a glossy and user-friendly publication, intended for the non-expert shareholders to understand.
Can Form 10-K predict the future performance of a company?
- Since companies are legally bound to file a 10-K and other forms, those who skip this obligation can be held accountable through fines or fees.There are ethical considerations, too.
- A substantial number of firms filed their 10-K as a Form 10-K405 during the late 1990s and early 2000s (decade).
- It requires items such as the company’s bylaws, information about material contracts, and a list of the company’s subsidiaries.
- For example, new laws or regulations passed by the federal government that may impact the company’s ability to operate the business would be included.
- A good analyst should read and analyze both documents in-depth and make investment decisions accordingly.
The information included in a 10-K can be difficult to move through, but the more familiar investors become with the layout and the type of information included, the easier it is to identify the most important details. Although it must be filed every year, the specific Form 10-K filing deadline will depend on the company’s size and public float. The public float refers to the value of shares available for public trade. If this exceeds $700 million, the filing deadline is within 60 days of the fiscal year’s end.
Analysts use it for financial modeling and making investment recommendations. U.S. companies are required to adhere to generally accepted accounting principles (GAAP), although some 10-K reports may also include non-GAAP (adjusted) figures. The Securities and Exchange Commission (SEC) requires publicly traded companies in the U.S. to file an annual report following the outline provided on Form 10-K. Every publicly traded company what is a 10k form is required to file financial reports with the Securities and Exchange Commission, or the SEC. The SEC Form 10-K offers a comprehensive snapshot of the company’s financial health throughout the year, almost like an annual report for the business numbers. Dive deep into SEC 10-K filing, including what kind of information is reported, who needs to file, and how to file quickly and securely.
- Informed investors are successful investors; don’t skip reviewing these important documents when they come out.
- There should also be an Auditor’s Report, which is a statement from an outside accounting firm that reviews the documents and attests to their accuracy.
- It is only applicable to the companies listed on the various stock exchange indexes of the United States.
- The 10-K is a mandatory annual report filed by public companies with the Securities and Exchange Commission (SEC), offering an extensive examination of a company’s financial position, management, and operations.
- The objective of form 10-k instructions is to provide the shareholders with accurate and relevant information about the company to make successful investment decisions.
What Is the 10-K Filing Deadline?
This form needs to be filed within days of the end of a company’s fiscal year, which may or may not overlap with the end of the calendar year. The 10-K report is made available online, through the SEC database and on a company’s website. This allows investors, analysts, shareholders and other curious individuals to check the health of a company at any time. The filing deadline for a 10-K can vary, depending on the company’s size.
Sometimes, you may run into a company with no financial statements or other disclosures in the Form 10-K. Large Accelerated Filers, which are companies with a public float of $700 million or more, are required to file their 10-K within 60 days after the end of their fiscal year. Accelerated Filers, with a public float between $75 million and $700 million, have 75 days to file. Smaller companies, classified as Non-Accelerated Filers, have 90 days to submit their 10-K. Meeting these deadlines is crucial, as late filings can signal potential financial distress or internal control issues, which could negatively affect investor confidence.
A Form 10-K must be filed within 90 days of the end of the fiscal year for non-accelerated filers with a public float of less than $75 million. Large accelerated filers with a public float of $700 million or more have 60 days to file, while accelerated filers with between $75 million and $700 million must file within 75 days. Failure to timely file can result in severe consequences, such as a Section 12(k) suspension or a Section 12(j) revocation of registration. Where an annual report may include company information, financials, and a letter from the CEO, the 10-K will include various risks and a detailed discussion of operations. This includes the very important management discussion and analysis (MD&A).
This section also contains words from the company’s board and its vision of how it will perform in the future. 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. Companies with a public float between $75 million and less than $700 million are considered accelerated filers and get 75 days. Those with a public float less than $75 million are required to file within 90 days of their fiscal year-end and are considered non-accelerated filers.
This section typically covers the company’s history, organizational structure, and any significant developments or acquisitions. It also discusses the company’s primary industry segments, geographical areas served, and key customers. The Form 10-Q can give insight into changes within a business, long before those changes show up in the earnings figures. For instance, you might see that inventory turnover is getting better (or worse) or that accounts receivable turnover is improving. You might even see warning signs that there is a credit problem with customers, because collections are slow. Changes in working capital, lawsuits, and other legal risks might be mentioned for which cash reserves haven’t been built yet.