MBToolBox
Tuesday Jul 05, 2005

Good Company

sec.jpgBecause my background is in finance, I know a lot about how to research companies. Here are some basics: If the company stock is traded on a stock market, like the NYSE or the NASDAQ, then management must file periodic reports with the Securities and Exchange Commission. If you click on The SEC's Edgar Database and enter the company name, you'll get their recent filings. There are a ton of forms; the most important is the annual report, form 10K; the quarterly report, form 10Q, and the proxy statement, form 14. If a company issues an amendment, it will issue an amendment - a 10K-A is an amended 10K report. You may also see an S-10, which is a prospectus for a recent stock offering. The site includes a helpful tutorial.

What do these tell you? What a company's business is like, how much money it makes, how much money it pays in taxes (see the footnotes in the 10K), how much the five highest-paid employees are paid (the proxy), and other fun facts. The prose is dry - they are written by lawyers, not writers - but it offers incredible information. If you are working on a profile, start there. Pull up a document and scroll through it. The word search function, Control-F for Windows users, can save you tons of toil.


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