KSAT Money: How to research a company’s finances before investing

10-K filing can give investors a public company’s financial data

SAN ANTONIO – If you’re looking to invest in the stock market but don’t have enough information about a public company to make sure you’re making a good choice, a company’s annual 10-K can give you a wealth of information regarding its finances.

A 10-K is an annual report required by the U.S. Securities and Exchange Commission, which gives a summary of a public company's financial performance.

The SEC said a 10-K offers a detailed picture of what the company does and the risks it faces.

Here are five important sections to look for in a 10-K:

  • There’s the “business” section, which describes the company’s main products and services. It helps an investor understand a company better.
  • The "risk factors" section details information about big risks a company faces, and the risks are generally listed in order of importance.
  • The section labeled selected "financial data" gives investors financial information about the company for the past five years.
  • The section labeled "management's discussion and analysis of financial condition and results of operations," or MD&A, gives an investor the company's view on the business results of the past fiscal year. The SEC says this section allows management to tell its story in its own words.
  • Finally, the "financial statements and supplementary data" section in the 10-K contains the company's financial statements, which include the company's income statement, balance sheet and the statement of cash flows.

You can usually find a public company's 10-K on its investor relations page or by using the SEC’s EDGAR search tool.

For more information on reading 10-Ks from the SEC, click here. You can access the SEC’s search tool by clicking here.

About the Authors

Ivan Herrera, MSB, has worked as a journalist in San Antonio since 2016. His work for KSAT 12 and KSAT.com includes covering consumer and money content, news of the day and trending stories.

Valerie Gomez is lead video editor and graphic artist for KSAT Explains. She began her career in 2014 and has been with KSAT since 2017. She helped create KSAT’s first digital-only newscast in 2018, and her work on KSAT Explains and various specials have earned her a Gracie Award from the Alliance for Women in Media and multiple Emmy nominations.

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