What Is a 10-K?
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A 10-K is a form publicly traded companies file annually with the Securities and Exchange Commission (SEC).
Only publicly traded companies are legally required to disclose their financial information, and so only public companies are required to file a 10-K form, although private companies may elect to do so as well.
5 Sections of a 10-K
A 10-K contains five sections:
- Business: Provides an overview of company operation, products, and/or services.
- Risk Factors: Listed in order of importance, this section describes all risks a company faces or is expected to face.
- Management’s Discussion and Analysis: Breakdown of company performance from management’s perspective.
- Financial Data: Relevant financial data for the last five years.
- Financial Statement and Supplementary Data: Contains a company’s income statement, balance sheet, and statement of cash flows, as well as a letter from the company’s indepe.ndent auditor
The name “Form 10-K” comes from the Code of Federal Regulations (CFR) designation in accordance with sections 13 and 15(d) of the Securities Exchange Act of 1934.
In addition to a 10-K, companies are also required to publish a 10-Q and 8-K report.
A 10-Q is a quarterly report of a company’s performance and financial position; an 8-K is required by the SEC whenever a company is undergoing a major event which shareholders must be aware of, such as an acquisition, changes in executives, bankruptcies, and so on.