Investeens

Definition: The form on which a publicly-held company reports its business performance and financial condition following the end of every year. The performance is reported for both the last quarter (ie: three months) of the year and for the entire year. The form is then sent to the Securities & Exchange Commission (SEC), the government agency which requires it and which keeps it on line for investors to examine.

Example: On February 12, 2010, publicly-held Google (ie: a company whose shares are owned by, and traded among, a large number of investors) filed its form 10-K discussing its performance for October, November, and December of 2009 and for 2009 as a whole.

Investeens explains: The most important resource that an investor can have is information. Thankfully, the government requires publicly-held companies to complete form 10-Q each quarter so that we never go longer than three months without knowing how a company is doing. The 10-K provides information for the last quarter and the entire year so investors don't have to combine 10-Qs themselves. The 10-K is also audited, meaning that an independent firm formally examines the company's activities and makes sure that its business activities have been properly accounted for.

The deadline for filing the 10-K is 60 days for companies with over $700 million of public float (ie: stock in ordinary investors' hands). For companies with public float between $75 and $700 million, the deadline is 75 days. For companies with less than $75 million of public float, it is 90 days.

Investors can examine 10-Ks by visiting the SEC's web site. Click here to visit the page on which you can search for company filings. Why look up a company's 10-K? Simply because it contains a wealth of information about the company, from financial statements to management's discussion of the business. It even contains a list of risks, in the Risk Factors section, that could derail the company. The reason the company is so honest about what could bring it down is that this makes it immune from being sued by investors who lose money because one or more of the possibilities it warned about actually happened.

Finally, companies may select a fiscal year (ie: 12 consecutive months that it will add up and report about) that is different than the calendar year. See fiscal year.

Riddle me this:

1. Which government agency requires that companies periodically report to investors how they are doing?
2. What two time periods does the 10-K report about?
3. Is the financial information on the 10-K audited or unaudited?
4. What important information is contained in the 10-K?

See related: 10-Q, Audit, Fiscal year, Publicly-held corporation, SEC.

Definition: The form on which a publicly-held company reports important events that occurred in its business. The form is then sent to the Securities & Exchange Commission (SEC), the government agency which requires it and which keeps it on line for investors to examine.

Example: On November 9, 2009, publicly-held Google (ie: a company whose shares are owned by a large number of investors) filed a form 8-K to report that it had entered into an agreement to acquire the company AdMob, Inc.

Investeens explains: The most important resource that an investor can have is information. Thankfully, the government requires publicly-held companies to complete form 10-Q each quarter so that we never go longer than three months without knowing how a company is doing. However, there may be information arising from events and activities happening with the company all during the year that is important for investors to know about. The "catch all" for these events is the 8-K. As we saw above, buying out another company is a reason to file an 8-K. Other reasons include acquiring or disposing of signficant assets, a top executive leaving the company, and closing up or selling off a part of the business.

Because it is important for investors to know what is happening with the company, the deadline for filing the 8-K for most events is four days. While this may sound like a tight deadline, consider that news of an important event may appear in the financial news within hours of it happening. In four days, a company's stock can move significantly. For this reason, investors don't rely on the 8-Ks to keep up with what's happening!

Investors can examine 8-Ks by visiting the SEC's web site. Click here to visit the page on which you can search for company filings.

Riddle me this:

1. Which government agency requires that companies periodically report to investors how they are doing?
2. When are companies required to file an 8-K?
3. What types of events require the filing of an 8-K?

See related: 10-K, 10-Q, Material information, Publicly-held corporation, SEC.