Basic SEC Forms and Reports Needed for an Investor
Forex is traditionally called the foreign exchange market, although in fact it is a global platform for CFD trading. And contracts for difference are here not only for currency pairs, but also for shares of the largest corporations, traditionally in most cases located in the United States. And as you already know, the entire stock market is under the de facto oversight of the SEC.
The US stock market is transparent. Financial statements submitted to regulators are published in the public domain. And since you can make good money on publishing quarterly reports, traders are seizing this most auspicious moment. True, the reporting still needs to be able to read. Read on to learn more about the main SEC reports submitted by US companies and how they affect share prices.
SEC reports that affect stock prices
In Russia, accounting standards are complicated. The difference in standards leads to a double perception of information. Even if you take the classic EBITDA formula and calculate it manually according to the Balance Sheet and additional reporting, the result will not be the one that the company will publish on its website. The reason: different approaches to the calculation, but there is no single open center.
The USA is another matter, where everything is relatively clear. True, if you are a resident of the United States. The procedure for filing financial statements is stipulated by the GAAP standard.
- Form 10-K… Filed annually by an issuer that lists securities on any US stock exchange. Includes the following basic data:
- Results of work for the last 3 years, indicating sales volumes, income and the amount of tax paid.
- Balance for the last 2 years.
- Profit and loss statement for the last 3 years.
- Cash flow statement.
The SEC report is filed within 90 days of the end of the fiscal year. After verification by the regulator (several days), the information is published in the public domain.
- Form 10-Q. A quarterly report that has several features:
- It is not certified by auditors, although it is a complete set of accounting data (if you remember Enron, then audit data can turn everything upside down).
- It reflects the forecast data for the next 3 months.
Most traders are guided by this SEC report, since their opinion can be influenced not only by the actual result, but also by the coincidence of the forecast with its implementation. In this report, you should pay attention to information on income, net profit / loss, earnings per share, movement of tangible assets.
- Form 8-K. The SEC report is not tied to a date and is submitted at the request of the commission. But its “sudden appearance” can fundamentally confuse traders’ cards. This form includes information on the most important events that may affect the value of shares: changes in the management team, mergers / acquisitions, litigation. You can find out about the appearance of such a report from the releases.
And in conclusion, advice: if you want to make money in foreign markets – learn English!