3.15. Notes, 10-K, and 10-Q
Lesson objective
Learn where to verify and deepen the analysis.
The annual 10-K describes the business, risks, results, audited financial statements, and notes. The quarterly 10-Q updates results and risks. An 8-K reports certain material events.
Notes explain accounting policies, debt, segments, taxes, commitments, and other important items. A number without its related note may be incomplete.
Finzati helps organize the research process, but official filings remain the primary source for material decisions.
The notes explain what the headline numbers cannot
A 10-K is the annual filing and a 10-Q is a quarterly filing for U.S. public companies subject to those requirements. The statements are only part of each filing.
Reading path: Business → Risk Factors → MD&A → Financial Statements → Notes → Controls / legal items
What footnotes often reveal
- Revenue-recognition policies and contract balances.
- Debt terms, rates, maturities, and covenants.
- Stock-based compensation and dilution.
- Acquisitions, goodwill, and impairments.
- Leases, commitments, contingencies, and litigation.
- Segment definitions and geographic concentration.
Headline vs. footnote
A balance sheet may show $5B of debt. The debt note can reveal that $3B matures within 18 months, carries floating interest, or has restrictive covenants. The headline amount alone cannot tell you that.
When a metric changes sharply, search the filing for the exact line-item name and read the surrounding note.
In Finzati
Use Finzati to identify questions and official filings to verify important details.
What you should remember
- Read Business, Risk Factors, MD&A, the statements, and the notes.
- Confirm dates and units.
Practice
Open a company's latest 10-K and locate its reported segments and primary risks.