What is Form 10-Q?
Form 10-Q is a comprehensive report on the quarterly performance of the company which is required by the SEC and consists of unaudited financial statements that provides an overview of the financial situation of the company.
10-Q for each first three quarters in a year is to be submitted by the companies to the SEC within a specified time from the end of the quarter, and the report for the fourth quarter is combined with the report for the full fiscal year, i.e., it is to be submitted on the SEC in Form 10-K. Therefore, no 10-Q SEC filing is required in the fourth quarter as after this quarter, the annual form 10-K is filed.
The report in Form 10-K, unlike 10-Q, is an audited one which is filed annually. The deadline for the filing of the 10-Q depends on an available float of the company.
Parts of the Form 10-Q
Type #1 – First Part
The first part contains the relevant financial information of the company covering the period, which includes the financial statements in condensed form, discussions of the management, and analysis of the company’s financial condition.
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Type #2 – Second part
The second part contains all other types of pertinent information, which includes the information on the legal proceedings during the period, unregistered sales of the equity securities and use of its proceeds, etc.
Example
Company XYZ ltd is a publicly-traded company in the US. XYZ ltd has to submit Form 10-Q to the SEC, which will include details of the discussion of the management and the analysis of the financial statements of the company, unaudited quarterly financial information, and the notes to financial statements, and all other types of pertinent information as required.
Advantages
- The Form 10-Q is filled to disclose the unaudited financial statements of the company and for giving an overview of the financial situation of the company, which provides the window into the financial health of the company. This information in the form can be used by the investors to see the changes taking place in the company before even the company files the quarterly earnings. Some of the areas in which the investors are generally interested include factors affecting inventory of the company, changes in the working capital account, changes in accounts receivables account, share buybacks, and other information on the company.
- Investors can also use the 10-Q to compare the companies in which they have invested or want to invest in the future to see how they are performing. It can give an idea to the investors that whether their choice is correct and not, and further decisions can be taken accordingly.
Disadvantages
- All the publically traded companies are required to file the Form 10-Q on a timely basis. If the company fails to submit the same on time and the extended time as allowed by the SEC, then it will result in consequences, which include the potential loss of registration with the SEC, removal of the company from the exchanges, and the legal ramifications.
Important points
- This filing is available on the EDGAR database of the SEC.
- It provides investors the information about the financial position of the companies on an ongoing basis.
- The report for the fourth quarter is combined with a report for the full fiscal year, i.e., it is to be submitted on the SEC Form 10-K, and there is no filling of form 10-Q for the last quarter.
- There are three categories of the fillers in which they are classified, which determine the different deadlines in which the company under consideration belongs. This category is known by the public float of the company where public float represents a portion of the corporate shares that are in the hands of the public and that are not held by the officers, owners, or government. All companies required to file the Form 10-Q must file it within a period of 40 or 45 days, depending on the size of the public float after the end of the quarter.
Conclusion
Form 10-Q is an unaudited report submitted to the SEC and in which firms have to disclose their relevant information for their financial position. The filing for each first three quarters in a year is to be submitted by the companies to the SEC within a specified time from the end of the quarter.
The report for the fourth quarter is combined with a report for the full fiscal year, i.e., it is to be submitted on the SEC Form 10-K. Federal securities laws made it mandatory for the publicly-traded companies to provide some of the information to the shareholders of the company and the general public.
It discloses the unaudited financial statements of the company and for giving an overview of the financial situation of the company. This form is available on the EDGAR database of the SEC.
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