Form 10-Q

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 filingSEC FilingSEC filings are formal documents submitted to the Securities and Exchange Commission in the United States that contain financial information about the company as well as any other relevant information about recent or upcoming activities.read more is required in the fourth quarter as after this quarter, the annual form 10-K is filed.

The report in Form 10-KForm 10-KPublic firms in the United States of America file Form 10-K. It is a detailed statement of the company's annual financial performance that is filed with the Securities and Exchange Commission (SEC) within 60 days of the end of the fiscal year.read more, unlike 10-Q, is an audited one that 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 informationFinancial InformationFinancial Information refers to the summarized data of monetary transactions that is helpful to investors in understanding company’s profitability, their assets, and growth prospects. Financial Data about individuals like past Months Bank Statement, Tax return receipts helps banks to understand customer’s credit quality, repayment capacity etc.read more of the company covering the period, which includes the financial statementsFinancial StatementsFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels.read more in condensed form, discussions of the management, and analysis of the company’s financial condition.

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.

Form-10-Q

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For eg:
Source: Form 10-Q (wallstreetmojo.com)

Example

Company XYZ ltd is a publicly-traded companyPublicly-traded CompanyPublicly Traded Companies, also called Publicly Listed Companies, are the Companies which list their shares on the public stock exchange allowing the trading of shares to the common public. It means that anybody can sell or buy these companies’ shares from the open market.read more 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

  1. 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 buybacksShare BuybacksShare buyback refers to the repurchase of the company’s own outstanding shares from the open market using the accumulated funds of the company to decrease the outstanding shares in the company’s balance sheet. This is done either to increase the value of the existing shares or to prevent various shareholders from controlling the company.read more, and other information on the company.
  2. 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

  1. This filing is available on the EDGAR database of the SEC.
  2. It provides investors the information about the financial position of the companies on an ongoing basis.
  3. 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.
  4. 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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