Definition
Form 10-Q is a quarterly financial report that companies are required to file with the U.S. Securities and Exchange Commission (SEC). It provides a comprehensive overview of a company’s performance, including details about its operations, financial condition, and management’s discussion and analysis about the financial position. This form allows both the company’s investors and the general public to stay informed about the company’s ongoing financial health.
Key Takeaways
- Form 10-Q is a comprehensive report of a company’s performance that must be submitted quarterly by all public companies to the Securities and Exchange Commission (SEC).
- It includes unaudited financial statements and provides a view of the company’s ongoing financial position. Often, it contains comparisons between the current quarter and the same quarter in the previous year.
- Investors, analysts, and the company’s stakeholders use Form 10-Q to assess the company’s financial health, trends, and operations.
Importance
Form 10-Q is a crucial finance term as it refers to a comprehensive report filed quarterly by publicly-traded companies per the U.S.
Securities and Exchange Commission (SEC) regulations.
It provides critical information regarding a company’s financial state including unaudited financial statements and management’s discussion of the firm’s financial condition and results of operations over the past three months, or quarter.
This interim report allows investors and regulators to monitor the firm’s ongoing financial health and business operations throughout the year, enabling insightful decision-making regarding investment strategies and regulatory actions.
Regular filing of Form 10-Q is a mandate to ensure transparency, investor protection, and proper market function.
Explanation
Form 10-Q is a comprehensive report filed quarterly by all public companies to provide an ongoing measure of a company’s financial health. The primary purpose of the Form 10-Q is to maintain transparency in the financial landscape and give investors a clear view of a company’s most recent financial performance.
This form encompasses a business’s quarterly financial information and allows investors to remain informed about a company’s operations and financial status throughout the year. Specifically, Form 10-Q covers aspects such as quarterly financial statements, management discussion and analysis of the company’s financial condition and results, disclosures regarding market risk, internal controls, and other relevant business factors.
Investors, amongst other stakeholders, can use these reports for their investment decisions as it aids in evaluating the company’s ongoing business models, various risks involved, and whether the company is financially stable or not. Overall, the premise of Form 10-Q serves to promote honesty and trust in financial reporting, safeguarding the interests of investors.
Examples of Form 10-Q
Form 10-Q is a quarterly report mandated by the United States federal Securities and Exchange Commission (SEC) to be filed by publicly traded corporations. It provides a comprehensive overview of a company’s performance and includes unaudited financial statements and provides a continuing view of the company’s financial position during the year. The form must be submitted on time, and the information should be available to all interested parties.Here are three real-world examples:Apple Inc. – As a publicly traded corporation, Apple Inc. regularly files a Form 10-Q. In Apple’s Q3 2021 report, they disclosed their quarterly revenue of $4 billion, up 36 percent year over year, and, among other financial indicators, their quarterly earnings per diluted share of $
Amazon – Amazon, another publicly traded company, also regularly files a Form 10-Q. In its Q2 2021 report, Amazon reported a net sales increase of 27% to $1 billion in the second quarter, compared with $9 billion in second quarter 2020 and other performance indicators.
Microsoft Corporation – Microsoft Corporation’s Q4 2021 reported revenue of $2 billion, increased 21% year-over-year; operating income was $1 billion, up 42% year-over-year; net income was $
5 billion, and, among others, diluted earnings per share was $17, as per their Form 10-Q. These examples show how Form 10-Q is utilized in real life by large corporations to disclose their financial standings and performance to their investors, stakeholders, and the public.
Form 10-Q FAQ
What is a Form 10-Q?
Form 10-Q is a comprehensive report of a company’s performance that must be submitted quarterly by all public companies to the Securities and Exchange Commission (SEC). The 10-Q is generally less detailed than a company’s annual report (Form 10-K), but nevertheless provides an overview of the company’s financial health.
What information does a Form 10-Q contain?
A Form 10-Q contains financial statements, management discussion and analysis, disclosures about market risk and internal controls. It gives investors insight into a company’s operational performance, future risks, and planned activities.
Who is required to submit a Form 10-Q?
All U.S. public companies are required to submit a Form 10-Q to the SEC on a quarterly basis. Failure to submit a Form 10-Q in a timely manner can result in sanctions or even a company being delisted from stock exchanges.
What is the difference between a Form 10-Q and a Form 10-K?
While both forms are required by the SEC and provide information about a company’s financial position, a 10-K is an annual report and it is more comprehensive. The 10-Q is a quarterly report and covers the three months leading up to its filing. In other words, the 10-Q is filed three times a year, whereas the 10-K is filed once a year.
Where can I find a company’s Form 10-Q?
You can find a company’s Form 10-Q on the SEC’s online database known as EDGAR (Electronic Data Gathering, Analysis, and Retrieval). Most companies also provide these forms in the investor relations section of their websites.
Related Entrepreneurship Terms
- Securities and Exchange Commission (SEC)
- Quarterly Report
- Financial Statement
- Publicly Traded Companies
- Annual Report (Form 10-K)
Sources for More Information
- U.S. Securities and Exchange Commission – The home regulatory body that maintains all Form 10-Q filings.
- Investopedia – A reliable website that simplifies complex financial information and concepts.
- The Motley Fool – A company that provides financial advice for investors through various resources.
- MarketWatch – Provides the latest stock market, financial, and business news.
