Third quarter reports are due in November. Quarterly reports generally update the full information disclosed in the Annual Report. They show unaudited financial results and note any significant changes or events during the quarter. 10-Qs typically contain an updated SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), and a discussion of how money is being used. What’s in plain sight, and what’s not in a 10-Q?
Typically, a quarterly report includes information such as:
- Financial statements
- Management’s Discussion and Analysis
- Quantitative and qualitative disclosures about market risk
- Controls and procedures
- Legal proceedings
- Unregistered sale of equity securities and use of proceeds
- Defaults upon senior securities
- Submission of matters to a vote of security holders
You may need to dig deeper in the fine print:
Sometimes information is deliberately buried in fine print, such as changes to executive compensation. Fine print or a footnote may indicate a 10% increase, without mentioning exactly what just got bigger. This is called “incorporation by reference.” You have to go back to the original disclosure to see what the footnote refers to. Beware: it may refer to a footnote which refers to an earlier document’s footnote, which refers to….
What’s in a Quarterly versus an Annual Report
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