10-K

Definition

A 10-K is a comprehensive annual report filed by public companies with the Securities and Exchange Commission (SEC) that provides a detailed overview of the company's financial performance. This document includes crucial information such as audited financial statements, a summary of business operations, management's discussion and analysis, and disclosures about risks. The 10-K is a key tool for investors, analysts, and other stakeholders to assess a company's performance and prospects.

5 Must Know Facts For Your Next Test

1. The 10-K must be filed annually within 60 days after the end of a company's fiscal year.
2. This report contains several sections, including business overview, risk factors, financial data, and corporate governance.
3. The 10-K is often compared to the 10-Q, which is a quarterly report providing less detailed information.
4. Companies are required to disclose any material changes that could affect their financial status in their 10-K.
5. The information in the 10-K is publicly accessible on the SEC's EDGAR database, making it a vital resource for investors.

Review Questions

• How does the 10-K provide value to investors and what specific sections would they find most useful?
  • The 10-K provides significant value to investors as it offers a comprehensive view of a company's financial health and operational status. Key sections that investors would find particularly useful include the audited financial statements that provide insights into profitability and cash flow, as well as the Management's Discussion and Analysis (MD&A) section where management discusses performance trends and future strategies. Additionally, the risk factors section helps investors understand potential challenges that could impact investment decisions.
• What are some of the key differences between a 10-K and a 10-Q, particularly regarding their content and filing timelines?
  • The primary difference between a 10-K and a 10-Q lies in their level of detail and filing frequency. A 10-K is an extensive annual report that includes audited financial statements and in-depth discussions about company operations, risks, and governance. In contrast, a 10-Q is filed quarterly and contains less detailed unaudited financial information along with limited management discussion. Furthermore, companies have 60 days after their fiscal year-end to file their 10-K, while they must file their 10-Q within 40 days after each quarter.
• Evaluate the implications of non-compliance with filing requirements for a company's 10-K on its reputation and market position.
  • Non-compliance with the filing requirements for a company's 10-K can have severe implications for its reputation and market position. Failure to submit timely or accurate filings may lead to loss of investor trust, resulting in decreased stock prices or increased volatility. Additionally, regulatory penalties from the SEC can damage a company’s credibility in the market. Such non-compliance can also signal underlying issues within the company’s financial practices or management, leading stakeholders to question its stability and potentially prompting divestment or reduced support from investors.

Related terms

SEC (Securities and Exchange Commission): The SEC is a U.S. government agency responsible for regulating the securities industry, enforcing federal securities laws, and protecting investors by ensuring transparency in financial reporting.

Audited Financial Statements: Financial statements that have been examined by an independent auditor to ensure their accuracy and compliance with accounting standards.

MD&A (Management's Discussion and Analysis): A section within the 10-K where management provides insights into the company's financial condition, results of operations, and future outlook.