10K Treasure Chest

Every company whose stocks and bonds are publicly traded in the United States is required to file an annual report with the Securities and Exchange Commission (SEC).

Known as a 10-K, it consists of four parts and is a treasure chest of information about the business of any publicly traded company.

Part I provides business information including markets served, market segments, competitors, customers, suppliers, products, services, risks, properties, technologies, financial summaries, and even statements of Mission, Vision, and Values.

Part II is mostly comparative financial information (five years) and includes management’s discussion and analysis of financial condition and results of operations. It also includes controls and procedures.

Part III is mostly of investor interest–Corporate Governess, Directors and Officers, security ownership, and Director Independence are examples.

Part IV contains the audited financial statements for the current and proceeding year. Most of this financial information is included in Part II and only of interest to accountants, auditors, and those responsible for compliance reporting.

Senior management in any public company is familiar with the content of their 10-K and know where they stand relative to competitors in their industry. The same is true for stock analysts and institutional investors who buy, sell, and hold corporate stocks and bonds.

The information in 10-K’s can be leveraged well beyond the Boardroom and Wall Street and is a valuable resource for the performance management and measurement community.

10-K information can be used by privately held companies to compare and benchmark themselves with similar public companies (based on industry, products, customers, markets, or size).

10-K information can be used to expand balanced scorecards, dashboards, and performance metrics for comparison with competitors and market leaders.

Marketing and sales can use 10-K information to more fully understand their publicly traded customers and to gain insight into the products they provide and markets they serve.

Individuals can use 10-K information to expand their knowledge of business and industry. When applying for a job with a publicly held company, reading their 10-K before the interview might make the difference in the outcome.

Make a New Year resolution to read the 10-K of a public company…

John A. Miller

Nov/Dec 2010


Links
• For more information on Form 10-K and to download the instructions http://www.sec.gov/about/forms/form10-k.pdf
• For the 2009 10-K for Google. http://investor.google.com/documents/2009_google_annual_report.html

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