10Q 10K

The 10-K is a powerful tool for all kinds of stakeholders to use when they’re evaluating a company. There are many stakeholders who might review a 10K in order to get a sense of a company’s viability. Three of the most prominent users are investors, competitors, and regulators.  

Investors use Form-10k to understand a company’s viability, and whether an investment in this organization will be a safe one that aligns with their values while yielding returns.  
Competitors will refer to the 10-K to see how their business is measuring up and look for clues about their competitors’ next move. 
Regulators may review 10ks for accuracy. Currently, the Sarbanes Oxley Act requires the SEC to review every public company’s financial statements at least once every three years, but some companies may be reviewed more frequently. When the SEC reviews 10Ks, and 10Qs for that matter, they look at them with an eye for inconsistencies, deficiencies, or lack of clarity.

There are a few places where you can locate a company’s 10K, 10Q as well as other disclosure filings. You can find them on the company’s website. You can also find 10k filings in the SEC’s EDGAR database, using the Company Search tool. Other paid filings databases exist. These have more advanced search technology and will help you get to specific information and compare filings more efficiently than EDGAR. Other sites like MarketWatch will aggregate information from company filings.

Public companies must file 10K reports to the SEC annually. Contrary to popular belief, public companies aren't the only ones who have to submit a 10K. Private businesses with over $10 million in assets held by 2000 or more people must also submit a 10k to the SEC.

The 10K contains information like company history, organizational structure, equity and subsidiaries holdings, key financial indicators like earnings per share, and audited financial statements. Companies must file their 10K within 60 days of their fiscal year end. The 10K includes five sections, which you can view on the SEC's website. All 10Ks follow the same structure defined by the SEC.  
 
The five sections are:

1. Business: This section outlines the company's operations, its products, and services.
2. Risk Factors: This section describes the potential risks a company currently faces or could face in the future. 
3. Selected Financial Data: In this section, the company discloses specific financial information, including a five-year overview of its financial data and recent performance.
4. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A): The MD&A gives management the opportunity to explain these business result of the past fiscal year in their own words. 
5. Financial Statements and Supplementary Data: In this section, the company appends its audited financial statements, including the balance sheet, cash flow statement, and income statement. These financial statements give investors an idea of the company's profitability. The company also has to include a letter from the auditor certifying their review.

The SEC requires public companies to include the following audited financial statements:

• The income statement 
• Balance sheets
• Cashflow statement

10K filings must also include a letter from the company’s third-party auditor that certifies the filings have been reviewed and how they’ve been reviewed.

In many ways, the 10K and annual reports are very similar. Both documents inform investors, shareholders, the public, and other stakeholders of a company’s operations and performance. While both contain information regarding a company’s financial position and future plans, there are some notable differences. 

The annual report is a glossy booklet prepared with shareholders and investors in mind. Annual reports seek to impress readers and (hopefully) sway investors to become shareholders. Annual reports contain qualitative narrations that include a letter from the CEO or chair of the board, an overview of the company’s structure, past, current, and future operations, and a discussion of initiatives and performance over the year. Of course, annual reports also have a quantitative portion that includes the balance sheet, income statement, cash flow statement, and year over year performance comparison. Like a yearbook, annual reports are highly visual. They usually contain graphic illustrations of performance in order to help readers understand the numbers. Annual reports will also have notes to financials and an auditor’s report. Typically, annual reports and 10Ks are filed simultaneously. 

10Ks on the other hand are much more clinical. 10Ks are a form that strictly adheres to the SEC’s predetermined guidelines, and they’re not designed for easy consumption. 10K filings focus on a company’s financial activity, risks, legalities, liabilities, and agreements, while also providing a market overview in addition to focusing on the company’s operations. 10Ks focus much more on operational and risk disclosures. The financials disclosed in a 10K are much more detailed than the financials disclosed in an annual report.

Large accelerated must file their 10-K 60 days after quarter end. 

Accelerated must file their 10-K 75 days after quarter end. 

Non-accelerated filers must file their 10-K 90 days after quarter end.

10Q filings are quarterly reports of a public company’s financials and operations over the period. A 10Q is like a 10K but significantly less exhaustive. The 10Q is broken into two distinct sections. Part 1 covers financial information during the period. This part includes financial statements, management’s discussion of financial statements, analysis of the company’s financial condition, market risk, and governance. Part 2 covers all other relevant information. This includes legal proceedings, changes in internal controls, unregistered sales of securities, use of their proceeds, defaults on senior securities, debts, coupons, or dividend payments. SEC reporting public companies must submit three 10Qs yearly. (The 10K covers the final fourth quarter.)

10K and 10Q filings are both statutory filings required by the SEC. The main differences between 10K and 10Q filings are:

1. Frequency
2. Amount of information disclosed
3. Audited financial statements.

While 10K reports are due annually and must include audited financial statements, 10Q reports are due quarterly, three times a year, and include unaudited financial statements. 10Q filings provide shareholders and the public an on-going update on a company’s performance over the year. Because they’re so frequently filed, the SEC does not require 10Q filings to be audited. 10Qs are most useful for stakeholders who are interested in a company’s short-term changes and those comparing performance over time. Unlike the 10K which has five parts, 10Q filings only consist of two parts.

Large accelerated and accelerated filers must file their 10-Q 40 days after quarter end. Non-accelerated filers must file their 10-Q 45 days after quarter end.