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Publicly traded companies who have their shares listed on stock exchanges are required to file regular financial statements and disclosures with regulators, such as the Securities and Exchange Commission (SEC) in the United States.
Among the most widely read of these are a company’s annual report, which tells investors and analysts how the company has performed over the previous fiscal year (FY), how its businesses look going forward and summarizing corporate financials for use in fundamental or ratio analysis through scrutinizing the balance sheet, income statement, and statement of cash flows.
In the old days, shareholders would receive the annual report by mail or through their broker. Thanks to the Internet, finding financial reports is easier and quicker than ever. Nowadays, nearly every reputable company has an easy-to-follow investor relations section on its website that is a wealth of information, including an archive of its annual reports, often going back several years.
Key Takeaways
- Public companies are legally required to file financial reports with the U.S. Securities and Exchange Commission (SEC).
- These reports include annual and quarterly reports that investors use to analyze companies.
- With the Internet, it is simple to access all company financial reports, which are available on their websites, usually under the “Investor Relations” section.
- If you want to dive further into company details and reports, the SEC has a database, known as EDGAR, with all company filings.
Working Example: Walt Disney
Walt Disney Co. is an excellent example of a business that uses its website to get information out to its shareholders, analysts, and prospective investors. It is very easy to find a direct link to its investor relations section.
This part of the Disney website contains a downloadable version of its annual report, as well as stock quotes, an investor newsletter, archived conference calls, and even the opportunity for current shareholders to sign up for electronic reports.
The best part about these online investor relations sections is their extra nuggets of hard-to-find information. For example, most companies will use these spaces to offer detailed info on past acquisitions and stock splits not always available on other financial portals.
If you want to dig deeper and go beyond the slick marketing version of the annual report found on corporate websites, you’ll have to search through required filings made to the Securities and Exchange Commission. All publicly traded companies in the U.S. must file regular financial reports with the SEC. These filings include the annual report (known as the 10-K), quarterly report (10-Q), and a myriad of other forms containing all types of financial data.
Note
In addition to the 10-K and 10-Q, other company filings include the 8-K, the DEF 14A, Form 4, Form 5, and the 13-D.
Filing Reports
Reports are filed through a system known as EDGAR (Electronic Data Gathering, Analysis, and Retrieval system). EDGAR performs automated collection, validation, indexing, acceptance, and forwarding of submissions by companies and others required by law to file forms with the SEC.
Information on EDGAR can be found on the SEC’s website, where you can search through forms as well as familiarize yourself with the system using its EDGAR tutorial.
Be warned; the tools on the SEC’s site are still cumbersome at best. For a more user-friendly site, try EDGAR Online. It is a subscription-based site offering dozens of products on any type of information filed with the SEC. You won’t find anything free, but if you need sophisticated services, EDGAR Online is the site for you.
What Is the Difference Between a 10-K and a 10-Q?
A 10-K and a 10-Q are both financial reports that are legally required to be filed by public companies with the Securities and Exchange Commission (SEC). The 10-K can be considered the most important one as it is audited by an external party and includes the most detail. It is filled annually at the end of a company’s fiscal year and details a company’s performance for the entire year and future outlook. A 10-Q is filed at the end of every quarter, contains less information, and is not required to be audited.
What Is Included in a Company’s Annual Report?
A company’s annual report is an in-depth look at its performance for the year and its future outlook. It contains a letter from the CEO summarizing the business and how it performed throughout the year. It contains all of the financial statements, including the balance sheet, income statement, and cash flow statement. It also discusses any big performance achievements for the year, changes to the business, future goals, social responsibility progress, business risks, and more. Overall it seeks to provide as much detail about the company for the year.
What Happens If a Company Doesn’t File an Annual Report?
If a company fails to file its annual report, there are a host of possible negative consequences. These include fines, penalties, lawsuits, delisting from stock exchanges, loss of investor confidence, suspension of trading, and more. It’s imperative for companies to file annual reports to remain in good standing and abide by the law.
The Bottom Line
Finding company annual reports and SEC filings is a simple process thanks to the Internet. Almost every public company has an “Investor Relations” section on their website with all of the filings for anyone to access.
Additionally, the U.S. Securities and Exchange Commission (SEC) has its EDGAR database where you can search for all financial filings companies have made with the SEC. These reports provide all the important information that investors and analysts need to know about companies, such as balance sheets, income statements, cash flow statements, business models, ownership, stock splits, and more.
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