- A Form 10-Q is a mandatory document that public companies must periodically file with the SEC.
- The 10-Q contains important information and financial performance updates.
- All 10-Qs are freely accessible in their entirety through the SEC’s EDGAR database.
The United States Securities and Exchange Commission (SEC) requires publicly traded companies to provide investors with regular updates on their business and financial condition. The idea is to ensure shareholders have all the details they need to make informed investment decisions.
Among the most important to follow are the quarterly earnings reports that companies submit following the outline provided on SEC Form 10-Q.
What is Form 10-Q?
Form 10-Q is a financial report that publicly traded companies are required to file after each of the first three quarters of the year. After the last quarter of the year, they submit a more comprehensive report known as
which covers their annual performance.
When companies announce their quarterly results, they typically refer to the 10-Q as their primary source document and may host an earnings call to discuss highlights and release a summarized version of the key points found in the 10-Q.
Although not as detailed as an annual report, the 10-Q contains valuable information for shareholders, including company financial statements, management notes on performance and company highlights. ‘company.
“The 10-Q tells everyone, including investors, how the company is doing,” says Jeff Hoopes, associate professor and Harold Q. Langenderfer accounting fellow at the University of North Carolina at Chapel Hill. “It shows its revenue this quarter, its assets and liabilities from this quarter, and is essentially a faster, more frequent version of the annual report, with less information.”
The 10-Q also addresses risk factors that may threaten the business, as well as any legal proceedings.
What does the Form 10-Q contain?
The 10-Q is organized into two parts. Part I contains financial information, including unaudited financial statements and notes from the management team. Part II is “other information”, which includes any legal proceedings, risk factors and other required information.
Part I – Financial information
- income statement: The income statement details the income and expenses of the business during the quarter.
- Balance sheet: The balance sheet tells you the value of the assets, liabilities, and equity of the business.
- Cash Flow : The cash flow statement provides details of all cash inflows and outflows of the business during the period. The cash flow statement is different from the income statement as it only takes into account true cash transactions while the income statement takes into account factors such as amortization.
- Management discussion on results and financial situation: This section of the report details what the company does, its strategy, and the key trends that managers believe are contributing to the company’s growth.
Part II – Other Information
- Legal proceeding: If there are ongoing proceedings involving the company, there will be a brief summary describing the issue here.
- Risk factors: The list of risk factors for the business will be listed here and will generally include new economic factors such as a change in consumption habits, high costs or a significant change in leadership. If there are no significant changes in risk compared to the previous report, this will be indicated.
When is earnings season?
Most businesses follow a calendar year cycle from January 1 to December 31 for accounting purposes. This means that terms end in March, June, September and December. Earnings season begins a few weeks after the end of each quarter and can last for several weeks. For example, the earnings season for the fourth quarter of 2022 would begin in mid-January 2023.
During earnings season, companies release their quarterly results and hold conference calls to discuss them with investors, analysts and the media. The stock market can also be volatile during these periods if reported results are higher or lower than investors’ and analysts’ expectations.
How to Know When Companies Report Profits
The SEC requires 10-Qs to be filed between 40 and 45 days from the end of the quarter, depending on the size of the company. For the 10-K, it is between 60 and 90 days.
Keep in mind that while most companies follow the calendar year for accounting purposes, with the fourth quarter ending December 31, others do not. Apple, for example, ends its fiscal year in September.
If you want to know when a particular company is expected to announce its earnings, one of the easiest ways to do so is to view a searchable earnings calendar, such as those provided by Insider and Nadsaq. Most brokerage apps and websites also include features to display major corporate events like earnings and stock splits on a timeline and will send you a notification when that event approaches.
Where to Get Business Earnings Reports
There are several places to get an earnings report.
You can get them by visiting the investor relations section on the company’s website. Many will include not only the 10-Qs and other documents filed with the SEC, but also related press releases and presentations given during earnings discussions with analysts and investors.
You can also search the SEC’s EDGAR database. The 10-Q and other required deposits can be found using this database. The Nasdaq also makes these income documents available.
Keep in mind that no matter where you access these documents, the reports will be the same, it’s just a matter of preference as to which website or database is easier to navigate.
To find a company’s earnings reports through EDGAR, follow these steps:
- Access the EDGAR database.
- Type a company’s stock symbol and press enter.
- Access Forms 10-K and 10-Q in the “Selected Documents” section to view each of the reports.