What is a 10-K, its contents, how to access it, and guidance for using it.

What Is a 10-K?

A 10-K is a detailed annual report that publicly-traded companies are required to file with the U.S. Securities and Exchange Commission (SEC) to disclose their financial performance. Unlike the standard annual report sent to shareholders, the 10-K provides in-depth information essential for informed decision-making.

This comprehensive document includes vital details such as corporate history, financial statements, earnings per share, subsidiaries, and executive compensation, among other relevant data mandated by the SEC.

The main purpose of the 10-K is to ensure transparency and keep investors informed about a company’s financial health. This information empowers investors to make informed decisions when buying or selling shares or investing in corporate bonds.

Understanding 10-Ks

Despite being lengthy and complex, 10-Ks are crucial documents providing a comprehensive insight into a company’s operations. Investors must recognize the significance of the 10-K as one of the most substantial annual disclosures. Canadian companies follow a similar process by filing SEC Form 40-F for disclosure.

These filings are mandated by the government to furnish investors with essential information to support wise investment decisions and offer a clear overview of a company’s activities and associated risks.

Knowledgeable investors can access 10-Ks using the SEC’s EDGAR database through the company search function.

The 10-K report consists of five key components:

• Business: Overview of the company’s operations and revenue streams.
• Risk factors: Identifying potential risks faced by the company.
• Selected financial data: Specific financial details from the past five years.
• Management’s discussion and analysis: Explanation of the company’s financial condition.
• Financial statements: Audited financial statements and supplementary information, including income statement and cash flow details.

Additionally, the 10-K includes declarations from the company’s CEO and CFO affirming the accuracy of the information provided. This practice was implemented to enhance transparency following notable accounting scandals post the dot-com era.

Where to Find a 10-K

10-K filings are public records accessible through various channels, commonly listed in the Investor Relations section of company websites. Familiarizing oneself with the structure and content of a 10-K facilitates the identification of critical information.

10-K Filing Deadlines

Filing deadlines for the 10-K vary based on the company’s size. Public companies with a public float exceeding $700 million must file within 60 days of the fiscal year-end. The timeline extends to 75 days for companies with a float between $75 million and $700 million, and 90 days for those below $75 million.

Forms 10-Q and 8-K

In addition to the 10-K, companies are mandated by the SEC to regularly file forms 10-Q and 8-K.

Form 10-Q, submitted quarterly, provides a snapshot of the company’s performance, though the information is typically unaudited. On the other hand, form 8-K is required for immediate disclosure of major corporate events that may impact investors.