How to read a 10-K and 10-Q
The anatomy of SEC filings: the 10-K, 10-Q and 8-K, the MD&A, footnotes and fiscal years, and where to find what.
The filings
US public companies file reports with the SEC, the market regulator. The 10-K is the annual report, audited by independent accountants. The 10-Q comes each quarter and is reviewed but not audited.
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Deadlines depend on company size. The 10-K is due 60 to 90 days after the fiscal year ends, and the 10-Q 40 to 45 days after the quarter. The biggest companies file fastest.
Other forms matter too. An 8-K reports major events as they happen, like a CEO leaving or a big acquisition. The proxy statement shows how executives are paid, and Form 4 shows when insiders buy or sell shares.
Earnings day
Results usually arrive first as a short press release, often right after the market closes. An hour later management hosts an earnings call, where analysts ask questions. The full 10-Q or 10-K follows, sometimes days later.
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Companies release results outside trading hours, before the 9:30 a.m. open or after the 4 p.m. close (New York time), so every investor gets the news at once. Prices then react in pre-market or after-hours trading.
Since 2000, a rule called Regulation FD (fair disclosure) has banned companies from telling important news to some investors before others. That’s why earnings calls are open to anyone and webcast live.
Inside a 10-K
A 10-K has a business description, risk factors, MD&A (management’s discussion and analysis, their explanation of the numbers), the financial statements and the footnotes. The footnotes are where the important details hide.
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Risk factors list everything that could go wrong, often in lawyerly boilerplate. The useful trick is to compare them with last year’s: a new or reworded risk is something the lawyers decided you needed to know.
Footnotes explain the accounting choices and the details behind each number: how revenue is recognized, when debts fall due, lawsuits, leases, stock compensation. Experienced analysts often read them before the statements.
Key terms
- 10-K / 10-Q / 8-K
- Annual report (audited) / quarterly report / filing for a major event. Filed with the SEC.
- MD&A
- Management’s discussion and analysis: management explains the results in its own words.
- Fiscal year
- A company’s financial year. It doesn’t have to match the calendar year.
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