10-Q
A quarterly report filed with the SEC by publicly traded companies providing unaudited financial statements and updates on operations and risks.
Example
“Three 10-Qs and one 10-K are filed each year — together providing a complete picture of company performance.”
Memory Tip
10-Q = quarterly report to the SEC. Unaudited, three per year between annual 10-Ks.
Why It Matters
The 10-Q helps investors and analysts monitor how publicly traded companies are performing between annual reports, allowing you to make more informed decisions about buying or selling stocks. If you own shares in a company or are considering investing, reviewing their quarterly reports gives you recent financial data that could affect your investment choices.
Common Misconception
Many people believe the 10-Q is as thoroughly audited and reliable as the annual 10-K report, but the 10-Q contains unaudited financial statements that have only been reviewed by auditors rather than fully audited. This means there is a slightly higher risk of errors compared to the audited annual report, though the information is still required to be accurate.
In Practice
If you own 100 shares of a technology company trading at 50 dollars per share, you might review their 10-Q filing and discover that revenue dropped 15 percent from the previous quarter while expenses increased 20 percent. Based on this quarterly performance data showing declining profitability, you might decide to sell your position before the annual report reveals even worse results, potentially saving yourself from a further 10 to 15 dollar per share decline.
Etymology
Named after the SEC form number. The quarterly update following the annual 10-K.
Common Misspellings
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See Also
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