The 10-K form is an annual report that contains a summary of a company’s performance which is required by the Securities and Exchange Commission (SEC). It must include information such as company history, executive compensation, organizational structure, subsidiaries, audited financial statements and equity, among others.

Reading a 10-K form needs a lot of attention on the part of the reader. You might want to get through the huge amount of information fast, but instead you will be wasting more time than you would if you actively read through the report. You’ll probably have to go two or more times through it either way.

You can break the 10-K report in four parts. These are: company overview and description, business discussion and financial data, insiders and related parties, and full financial statements and footnotes. The first part contains: company operations, risk factors, unresolved staff comments, properties and legal proceedings. Here you will find the most accessible information such as general information about the company. You will also find some of the most important information in the report under risk factors.

In the second part you will find information related to stock prices and a preview of the financial data found in the later part. Here you can see the highs and lows the stocks went through and some general information about the company’s financial statements. There is also a section where management discusses how the business has been doing. This is an important segment to go through as it may provide valuable information as to how the company is going to fare in the future. You will also find another section on the risk related to interested rates, market exposure, stock price risks, commodity prices and foreign currency exchange rates. Next you will find the audited financial statements. And finally there is a segment that discusses the disagreements or the changes within the accounting department.

In the third part you will find information about the management team, how much money they and the CEO is making, and general information about the leaders of the company. You might be directed to read a proxy document where you will find important information such as the CEO’s family being brought in to do unessential business (not a good sign).

The fourth and final part is the most important one. Here you can find all the financial and legal data related to the company. Some people start with this part right from the get go. Here is where you will find detailed breakdowns, legal company documents, definitions and important information buried in the footnotes.