Wall Street Prep: Analyzing Financial Reports,
Complete solution
Securities and Exchange Commission
Public companies must submit quarterly and annual filings with the SEC, which makes
these available to the public
Also requires companies disclose when there's a merger, a sale of securities, a
shareholder vote, buying and selling of shares by management and insiders, etc.
Finding Financial Reports
SEC makes filings public information
Also:
Company website
Data services
Primary Filings for Common Analyses
10-K
10-Q
8-K (Ex. Earnings press releases)
Proxy
20-F
Primary Filings for M&A Analysis
Finding filings is important for performing a precedent transactions analysis and
premiums paid analysis
Initial Screen: Services like Capital IQ
Then, the relevant filings for the prior deals need to be aggregated to perform the
analysis
Form 10-K (Annual Filing)
At the end of each fiscal year, publicly-traded companies must file this report
Provides comprehensive information about a company's financial and operational
performance during the year
Includes: Thorough overview of their businesses and finances; financial statements
Must be filed within 60-90 days within year end
Financial professionals substantially depend on this to analyze year-over-year and
company comparisons
SEC and FASB outline in great detail how info should be presented in the document
Why is the 10-K important?
Provides the most detailed overview of companies' financial operations and regulations
governing them
10-K vs. Annual Report
Annual Report:
Not a required SEC filing
Companies have a lot of latitude in the structure and contents
May contain details not reported elsewhere, but are typically self-marketing
10-K:
Presents a more detailed and unfettered picture of the company’s operations and
situation
, Annual Report
Issued at the end of each year
Contains similar if not identical information to the 10-K
10-K: Part I
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
10-K: Business
Most important part of 10-K
Company business, strategy, product offering, seasonality, and geographical footprint
10-K Part II
Where most of the "red meat exists," specifically in Item 6, 7, and 8
10-K: Part III
What is the difference between an annual report and a 10-K?
Annual Report: Glossy document with select financial figures, letter to the shareholders,
and sometimes the actual 10-K or a condensed version
10-K: Where you want to go to make sure you're using the right information
10-Q Reports Must be Filed...
Three times annually
Which forms are audited?
Only the 10-K
For ALL accelerated filers, 10-K's must be filed...
No later than 60 days after the fiscal year-end date
10-K Part I: Business
Identifies the general overview about the business, the business strategy, the key
products, markets and distribution, competition, number of employees
Allows you to familiarize yourself with the business
10-K Part I: Unresolved Staff Comments
SEC comments outstanding (> 6 months)
Would be a red flag for a company
10-K Part I: Risk Factors
Summary of industry- and company-specific risks
Generally pretty obvious and doesn't provide a lot of helpful information (this would be in
MD&A section)
10-K Part II: Market for Equity, Related Stockholder Matters, Purchases of Equity
Stock price/dividend history; company listing details
Outlines stock price range during the four quarters, dividend info, general market
performance, etc.
10-K Part II: Selected Financial Data
Key financial statistics for a company's most recent 5-10 fiscal year period
Can be very useful for some companies that choose to put significant disclosures in
Part of the core portion of the 10-K
10-K Part II: MD&A
Complete solution
Securities and Exchange Commission
Public companies must submit quarterly and annual filings with the SEC, which makes
these available to the public
Also requires companies disclose when there's a merger, a sale of securities, a
shareholder vote, buying and selling of shares by management and insiders, etc.
Finding Financial Reports
SEC makes filings public information
Also:
Company website
Data services
Primary Filings for Common Analyses
10-K
10-Q
8-K (Ex. Earnings press releases)
Proxy
20-F
Primary Filings for M&A Analysis
Finding filings is important for performing a precedent transactions analysis and
premiums paid analysis
Initial Screen: Services like Capital IQ
Then, the relevant filings for the prior deals need to be aggregated to perform the
analysis
Form 10-K (Annual Filing)
At the end of each fiscal year, publicly-traded companies must file this report
Provides comprehensive information about a company's financial and operational
performance during the year
Includes: Thorough overview of their businesses and finances; financial statements
Must be filed within 60-90 days within year end
Financial professionals substantially depend on this to analyze year-over-year and
company comparisons
SEC and FASB outline in great detail how info should be presented in the document
Why is the 10-K important?
Provides the most detailed overview of companies' financial operations and regulations
governing them
10-K vs. Annual Report
Annual Report:
Not a required SEC filing
Companies have a lot of latitude in the structure and contents
May contain details not reported elsewhere, but are typically self-marketing
10-K:
Presents a more detailed and unfettered picture of the company’s operations and
situation
, Annual Report
Issued at the end of each year
Contains similar if not identical information to the 10-K
10-K: Part I
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
10-K: Business
Most important part of 10-K
Company business, strategy, product offering, seasonality, and geographical footprint
10-K Part II
Where most of the "red meat exists," specifically in Item 6, 7, and 8
10-K: Part III
What is the difference between an annual report and a 10-K?
Annual Report: Glossy document with select financial figures, letter to the shareholders,
and sometimes the actual 10-K or a condensed version
10-K: Where you want to go to make sure you're using the right information
10-Q Reports Must be Filed...
Three times annually
Which forms are audited?
Only the 10-K
For ALL accelerated filers, 10-K's must be filed...
No later than 60 days after the fiscal year-end date
10-K Part I: Business
Identifies the general overview about the business, the business strategy, the key
products, markets and distribution, competition, number of employees
Allows you to familiarize yourself with the business
10-K Part I: Unresolved Staff Comments
SEC comments outstanding (> 6 months)
Would be a red flag for a company
10-K Part I: Risk Factors
Summary of industry- and company-specific risks
Generally pretty obvious and doesn't provide a lot of helpful information (this would be in
MD&A section)
10-K Part II: Market for Equity, Related Stockholder Matters, Purchases of Equity
Stock price/dividend history; company listing details
Outlines stock price range during the four quarters, dividend info, general market
performance, etc.
10-K Part II: Selected Financial Data
Key financial statistics for a company's most recent 5-10 fiscal year period
Can be very useful for some companies that choose to put significant disclosures in
Part of the core portion of the 10-K
10-K Part II: MD&A
