What To Look At On An SEC 10-Q filing

What to look at on an sec 10 q filing

In the US, companies that sell shares to the public have to share reports with the government agency called the SEC four times a year. These reports are called Form 10-Q and they give information about how well the company is doing financially and how it's being run. The first three reports cover one quarter each, and the fourth one is included with the annual report. Investors can use these reports to decide if they want to invest in the company or not. In this guide, we'll show you how to read Form 10-Q so you can make smart investment choices.

1. The Financial Statements:

It's a crucial part of a 10-Q filing because they give us a comprehensive view of the company's financial performance during the previous quarter. These statements are like a report card that shows us how well the company is doing.

The 10-Q report includes three major financial statements: balance sheet, income statement, and cash flow statement. These statements are important as they give crucial information about the company's financial performance during the previous quarter.

  • The balance sheet displays the financial standing of the company at a particular point, which is typically the final day of the previous quarter. It presents a clear picture of what the company possesses, the debts it owes, and the amount invested by its owners.
  • The income statement shows us how much money the company made from its sales and how much it spent during the quarter. This statement helps us understand if the company made a profit or a loss.
  • The cash flow statement shows us how much money the company received and spent during the quarter. It helps us understand the company's financial liquidity, which is its ability to meet its financial obligations.

When reviewing the above three financial statements, investors should look for trends in revenue growth, profit margins, and cash flow. They should also look at a company’s debt levels and how they are being managed. Does a company have outstanding debt? If yes, does it pay it down every quarter, or does the debt increase over time? If a company has high levels of debt and it doesn’t pay it down, it may be a red flag for investors.

2. Management Discussion and Analysis:

The next section of a 10-Q filing investors should look at is the Management Discussion and Analysis (MD&A). This is probably the most important section of a quarterly filing. It provides management’s perspective on the company’s financial performance and operations during the previous quarter. The MD&A is an important section to read as it provides insights into the company’s strategy and future prospects.

By reviewing this section, investors can read management’s explanation of the previous quarter’s financial performance. What was the revenue driver? Why did profits increase/ decrease in the previous quarter? Why did cash reserves increase/decrease? Investors can discover valuable insights and determine if a company’s fundamentals are moving in the right or wrong direction. They can also look for risks or uncertainties management has identified.

3. Risk Factors:

The risk factors section of a 10-Q filing outlines the risks that the company faces. It is significantly shorter than the risk factors section in a 10-K filing but outlines the main risks that can be both internal and external. Investors should review this section and look for risks that could have a significant impact on the company’s financial performance or operations. This includes risks related to its industry, competition, or regulatory environment. Investors should also look for any risks that management has identified as being particularly significant. If a company faces significant risks, investors should consider avoiding the stock.

4. Legal Proceeding:

Many investors skip this section, which provides valuable information about any legal proceedings that the company is involved in. This can include lawsuits, regulatory investigations, or other legal disputes. This section is important to review as legal proceedings can have a significant impact on a company’s financial performance and operations.

When reviewing the legal proceedings section, investors should look for any significant legal disputes that the company is involved with. They should look for any potential liabilities that the company may face as a result of these legal proceedings. If a company is facing significant legal risks, the downside of the stock increases and risk-averse investors should consider avoiding investing in it.

5. Notes to Financial Statements:

The notes to financial statements section of a 10-Q filing provide additional information about the company’s financial performance and operations. This section can include information about accounting policies, significant events, or other relevant information.

Investors should look for any significant accounting policies or changes in accounting policies. They should look for any significant events that may have impacted the company’s financial performance during the quarter. If there are any significant events or accounting policies that are not adequately explained, investors should review the most recent 10-K filing to learn more about the events or accounting policies.


Reviewing an SEC 10-Q filing is an important step in making informed investment decisions. Investors should review the financial statements, management discussion and analysis, risk factors, legal proceedings, and notes to financial statements to gain a comprehensive understanding of the company’s financial performance and operations during the previous quarter. By carefully reviewing these sections, investors can identify potential risks and opportunities and make informed investment decisions.

It is also important for investors to compare the information provided in the 10-Q filing to previous filings and to the company’s overall performance over time. This can provide insights into trends and patterns in the company’s financial performance and operations.

In addition to reviewing the 10-Q filing, investors should also consider other sources of information such as analyst reports, news articles, and industry reports. These sources can provide additional insights into the company’s performance and prospects.

It is important to note that while reviewing a 10-Q filing can provide valuable insights, it is only one piece of the puzzle when making investment decisions. Investors should also consider factors such as the company’s industry, competitive landscape (this can be found in a 10-K filing), and management team when making investment decisions.

Finally, it is important for investors to have a clear understanding of their investment goals and risk tolerance when reviewing a 10-Q filing. While some investors may be comfortable taking on higher levels of risk in pursuit of higher returns, other may be more risk averse. By understanding their investment goals and risk tolerance, investors can make informed decisions about whether a particular investment is right for them.