A 10-K is the detailed yearly report a US public company files with the SEC. It is long, but you do not have to read it all at once.
Start with the business
The first section explains what the company does, how it makes money and who its customers and competitors are.
Then risk factors
This section lists what the company thinks could hurt it. It is often the most honest part of the report.
Management discussion
Here leaders explain the year in their own words, including why numbers changed.
Then the numbers
Look at revenue, profit, cash and debt over several years. Trends tell you more than a single year.
Find them
Every filing is free on the SEC site, and our company pages link to them.
What a 10-K is
A 10-K is the annual report that public companies in the United States file with the SEC. It is the most complete picture a company gives of itself each year, and it is free to read on the SEC website.
Where to start
Do not read it front to back. Start with the business section, which explains what the company does and how it makes money. Then read the risk factors, where the company lists what could go wrong in its own words.
The numbers section
Look for three statements. The income statement shows sales and profit. The balance sheet shows what the company owns and owes at a point in time. The cash flow statement shows the actual cash moving in and out. Profit on paper and cash in the bank can tell different stories, so look at both.
Management discussion
This section is where leaders explain the results. Read it for what changed from last year and why. Notice whether the explanations are specific and clear, or full of vague language.
The footnotes
Footnotes can hold important details about debt, leases and legal matters. You do not have to master them. Just know they are there, and skim them for anything that stands out.
A simple routine
Read the business section, skim the risk factors, then look at sales and profit for the last three years. Write down what you learned in a few sentences. Do this with one company and the next one gets easier.
Explore: Browse company pages.
Keep reading
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- What Is Market Cap? Company Size Explained
- Learn investing one small idea at a time
Education only. This is not investment advice, and investing involves risk, including loss of money.