A Guide To The Different Types Of Financial Filings

By Ronald Kimmons. May 7th 2016

The United States Securities and Exchange Commission (SEC) requires publicly traded companies and some of the entities associated with them to file specific financial reports either at regular intervals or as a result of specific developments. The SEC uses its online EDGAR database to make many of these reports available through the Internet. By gaining an understanding of what these various reports are and how they work, investors can use them to gain valuable information about investment viability when it comes to securities such as stocks, bonds and MLP units. Read on to find out about the different types of financial filings.

S-1

The SEC requires publicly traded companies to provide S-1 filings prior to an IPO (initial public offering). The purpose of the S-1 is to give potential investors an idea of the company's financial circumstances and operational soundness. Some basic aspects of an S-1 filing are as follows:

  • Business Model - What the company does and how it does it.
  • Market And Industry Analysis - A description of the company's place in its market, how its industry has performed recently and projected industry growth.
  • Competitive Analysis - A description of the company's competitors and how the company intends to take market share from them.
  • Use Of Capital - An explanation of how the company intends to use the capital raised through its IPO.
  • Offering Price Methodology - How the company went about valuating its IPO asking price.
  • Dilution Of Existing Securities - An explanation of the percentage of stock that pre-IPO investors will maintain.

10-K

The 10-K is a report that the SEC requires certain publicly traded companies to file annually. It is intended to be a comprehensive representation of the company's performance. This report includes a wide array of items including a description of the business and its properties, legal proceedings, issues of corporate governance, financial data, statements of risk, executive compensation and related matters. The data provided by this report is audited by an accredited accounting firm. Upon preparing the 10-K and filing it with the SEC, publicly traded companies must issue financial reports to their investors based on information from the 10-K, and some companies issue the 10-K along with those glossier reports.

10-Q

The 10-Q is a report required by the SEC that is very similar to the 10-K, including much of the same information. However, it has a few differences:

  • It is filed quarterly rather than annually.
  • It is simpler and shorter than the 10-K.
  • It is unaudited.

10-Q reports generally make comparisons against the previous quarter and the same quarter from the previous year. 10-Q reports do not need to be filed for quarters when 10-K reports are filed.

8-K

Like the 10-K and 10-Q reports, the 8-K report gives important company information regarding operations and finances. However, it is different in that companies do not have to file 8-K forms on a regular basis. Rather, they only have to file these forms when certain important events occur that could have an effect on stock price. The intent is to ensure that investors stay informed about the company's operations and financial stability during the time between 10-K and 10-Q filings. Here are some examples of events calling for 8-K issuance:

  • Bankruptcy
  • Changes in management
  • Departure or election of a director
  • Layoffs
  • Factory closures
  • Amendments to policies of corporate governance
  • Default on corporate debt
  • Assumption of 51 percent ownership by a single party
  • Substantial purchases or sales of assets

6-K

U.S. companies are not the only companies that list their securities on U.S. exchanges. Foreign companies can do so as well, often through American depository receipts (ADRs). In such cases, the information that those companies submit to investors and government agencies is primarily regulated by the host country. However, in order to continue listing their securities in the United States, these companies must also submit 6-K reports to the SEC and to their U.S. investors whenever they make any sort of official disclosure to investors or regulators in their home countries. In this way, the 6-K is a catch-all method for the issuance of foreign investment notices to parties in the U.S.

20-F

The 20-F report is specifically for foreign issuers of securities in the United States. While the 6-K is in many ways the equivalent of an 8-K for foreign companies, the 20-F is the equivalent of a 10-K for foreign companies. Foreign companies that list their securities in U.S. exchanges must submit a 20-F form annually. It deals with many of the same issues as the 10-K, although the requirements are not as strict.

Other Filings

While the reports mentioned above are some of the most common filings that companies that list their securities in the United States must file, the SEC requires and recognizes a number of others. Each type has its own specific requirements and parameters, and investors and analysts must understand their implications in order to make the best decisions and recommendations regarding investment opportunities.

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