Last editedSep 20212 min read
All publicly traded companies are required to submit the Form 10-K, a more complex version of the annual report. Whether you’re a business owner or investor, it’s helpful to understand the Form 10-K definition as well as the ins and outs of this comprehensive report.
Form 10-K explained
The 10-K is a financial report filed annually by all publicly traded companies within the United States. It’s issued and mandated by the U.S. Securities and Exchange Commission (SEC) to provide detailed information to company shareholders. You’ll find all relevant financial details pertaining to the company listed on Form 10-K, including its basic background and history, company structure, earnings per share, and financial statements.
The purpose of the 10-K is to give investors all the information they need about a company. By viewing all financial data and learning more about the organization itself as well as its risk, investors can decide whether it’s worth buying and selling shares. You can retrieve any company’s Form 10-K by searching the SEC’s EDGAR database.
Form 10-K: definition and sections
The 10-K’s length will depend on how complicated a company’s structure and finances are. It’s divided into the following five sections:
Business – An overview of the business’s products and services, describing the type of industry and operations involved.
Risks – An outline of any risks that the company is currently facing as well as issues that could be risk factors in the future that investors should know about.
Finances – The third section includes specific financial details covering the past five years. It should cover any relevant data about the business’s recent performance.
Management – The management’s discussion and analysis sections allow the company to explain its recent performance. The management has the chance to discuss discrepancies in the data or downturns in performance.
Financial Statements – You’ll also include the balance sheet, income statement, and statement of cash flow in the Form 10-K. If there’s any supplementary data, you should also include it in this section along with a letter from your auditor to certify the details.
In addition to these five sections, the 10-K would include signed letters from the CEO and CFO to swear that all information on the form is accurate. These statements could be used later in legal proceedings, so it’s important to verify everything very carefully before signing.
Form 10-K filing deadline
Although it must be filed every year, the specific Form 10-K filing deadline will depend on the company’s size and public float. The public float refers to the value of shares available for public trade. If this exceeds $700 million, the filing deadline is within 60 days of the fiscal year’s end. Companies worth between $75 million and $700 million have 75 days, while those worth less than $75 have up to 90 days.
Form 10-K checklist
While it’s not an overly complicated form, there’s quite a bit of paperwork involved with filing the Form 10-K and it’s all too easy to overlook the smaller details. Before you hit “submit,” here’s a Form 10-K checklist to follow:
Aggregate market value
Number of outstanding shares
Current financial statements
Certified and signed audit report
Signatures of all parties
List of current directors
Form 10-K vs annual report
Although the 10-K contains some of the same information that you’ll find on the company’s annual report, there are a few key differences. The annual report is submitted to company shareholders every year as a reference document ahead of the annual shareholder meeting. Form 10-K is submitted to the SEC each year and can be found on the SEC website. You’ll usually list your annual report on the company website to attract investors. As a result, annual reports are glossier with plenty of visual aids and diagrams, while 10-Ks typically involve a no-nonsense list of data. Both serve their purpose, but it’s important to prepare them separately.
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