How to read a 10-K, 10-Q, 8-K and earnings report (and where to find them free)

The filings

• 10-K: the annual report filed with the SEC. Includes the business description, risk factors, management’s discussion and full audited financial statements.
• 10-Q: the quarterly update, with unaudited statements and management commentary.
• 8-K: a current report for major events such as leadership changes, acquisitions, results and material agreements.
• Prospectus: the document describing a new offering of securities (an IPO, for example), including risks and how proceeds will be used.
• Annual report: the shareholder-facing version, often glossier than the 10-K.

All are searchable for free on the SEC’s EDGAR system (sec.gov). Companies also post them on their investor-relations pages.

Where to start in a 10-K

• Business: what the company actually sells and to whom.
• Risk factors: the company’s own list of what could go wrong.
• Management’s discussion: the reasons behind the numbers.
• Financial statements and notes: the detail.

The three statements

• Income statement: revenue, costs and profit over a period. Is the business growing and profitable?
• Balance sheet: assets, liabilities and equity at a moment. What does it own and owe? Watch debt and cash.
• Cash flow statement: where cash came from and went. Do profits become cash, and what is spent on investment or buybacks?

The earnings report

Every quarter companies announce results, often with a call to discuss them. The headline is compared with analysts’ expectations, so a stock can fall after “good” results that were not as good as hoped. Look past the headline to revenue trend, margins, cash flow and what management says about the next period. An earnings calendar shows when each company reports.

Read the risk-factors section of any company you own. It is the most honest part of the document.