10-K

What is the SEC Form 10-K?

Form 10-K is a detailed annual report that is required to be submitted to the U.S. Securities and Exchange Commission (SEC). The filing provides a comprehensive summary of a company’s performance for the year. It is more detailed than the annual report that is sent to shareholders during the annual meeting to elect directors. SEC filing 10-K outlines the company’s history, equity, subsidiaries, organizational structure, audited financial statements, and other relevant information.

The 10-K is organized in a way that makes it easy to consistently find the same information across multiple companies in the same place on a 10-K. Here are the main sections of the form:

Part I

Part I of Form 10-K provides an overview of the company’s business and the risk factors that investors should know when investing in the company. In this section, the company should disclose any material legal proceedings that the firm is part of or to which any of the company’s property is subject. Also, this section should disclose any unresolved comments from SEC staff about the company’s report(s) in prior periods. If applicable, the company should provide information concerning mine safety violations or other regulatory issues.

Part II

Part II of provides a comparative presentation of financial data for the five immediately prior years, making it easy for investors to measure the company’s latest performance against past data. This section also includes the audited financial statements that have been reviewed by a registered CPA firm. These financial statements comprise the independent auditor’s report, a consolidated balance sheet, a consolidated statement of operations, and other accounting reports and notes. The management discussion and analysis of the company’s performance provides a clear overview of the financial and operational issues that influenced the operational results.

Part III

This section of the 10-k includes material disclosures relating to directors, executive officers, executive compensation, and corporate governance. Firms should also reveal the beneficial ownership of management and significant shareholders, certain relationships and related transactions, director’s independence, and accountant fees and services.

Part IV

Companies should list the financial statements, schedules, and exhibits that are filed in Part II. The exhibits include all material contracts, the company’s organizational documents, a list of significant subsidiaries, and applicable certifications. Also, this is where the management – CEO, CFO, and members of the board of directors – append their signatures, certifying that SEC 10-K filing is accurate.

Relevance for a financial analyst

Financial analysts routinely have to pull information when performing financial analysis and financial modeling.  In order to make an assessment about the attractiveness of an investment, an analyst needs to look at the historical financial information of a company, which is where the 10-K and 10-Q (quarterly reports) are extremely important.

This example is taken from CFI’s financial modeling courses.

Additional resources

Thank you for reading CFI’s explanation of a 10-k filing. To further advance your financial knowledge, see the following free CFI resources:

• Balance Sheet
• Income Statement
• Types of SEC Filings
• Investment Methods