Most of the data to be used by security analysts will come from four main sources. The two data sources of information for financial analysts can be considered original.
The first is the data that the company reports to its shareholders and journalists. Second data is referred to information that an enterprise must provide to regulatory units, such as a securities commission.
The analyst can also take advantage of the data available to him from various agencies that actually process the data when it becomes available. For example, these services are offered by Standard and Poor’s or Moody’s agencies.
The fourth source of information is the recently created and growing number of electronic databases that come with special software programs.
In addition to these four sources, there are other sources of information such as magazines and government publications that give us important information about specific industries, sectors, and economies.
Reports Available to the Analyst for Analysis
The securities of most companies will be available on the stock exchange if the company has made a public offering of securities. You will be able to make an analysis from three types of reports:
Annual reports (Including 10-K)
Annual reports contain more information than is needed to give investors enough information to be able to make a quality decision. Every company with listed securities must fill out a 10-K form that significantly helps investors understand company data.
In recent times, the gap between 10-k reports and annual reports has narrowed. Although, the annual report is more user-friendly, while the 10-K is intended for investors and analysts. The 10-K can be found on the SEC website, while the annual report should be available on the company’s website.
Some of the information a company is required to document in the 10-K includes it’s business activities history, organizational structure, financial statements of which balance sheet, profit, and loss account, and cash flow with the comparative period.
Current reports (10-Q)
Current reports are available for all publicly listed companies. They can be found on the page of the Securities Commission. One should be careful with them as these are reports that have estimates that are not used in the annual reports. Likewise, the involvement of auditors in these reports is not mandatory.
In report 10-Q you will be able to find a summary income statement for the last quarter compared to the same quarter of the previous year, a summary cash flow statement for the last quarter, a summary balance sheet for the previous quarter, information on acquisitions of other companies, additional information in accounting standards.
Form 8-K is required to be filed by public companies with the SEC pursuant to the Securities Exchange Act of 1934. This form is given to the securities commission after a specific event.
The most important events covered by this report are changes in the ownership of the listed company, takeover or sale of assets, change of auditor, dismissal of the director or partner, other material items.
Database as Sources of Information for Financial Analysts
The goal of every security analyst is to understand and interpret information from data. This includes collecting data, processing the data into a useful format, and interpreting that data.
You can use reporting and adjusted data as sources of information for financial analysts.
Reporting and adjusted data
Reporting databases help analysts in analyzing the company’s past performance, and adjusted data serve as the basis for a consistent picture of a company’s growth and profitability over a period of time.
Best Websites for Finding a Company’s Financial Data
Financial analysts have access to real-time fundamental and technical analysis data on which they can make investment decisions. Many companies offer in addition to financial data and indicators that you can immediately use in financial analysis. This may include historical financial results as well as future predictions.
Below are some of the top websites that allow investors to quickly, and easily find financial data.
- ValueLine – Contains comprehensive financial data derived from annual reports and 10-k reports. You can find detailed calculations of ratios and indicators.
- Sec.gov – This is a large database of financial information provided by the Securities and Exchange Commission. On this site you have the ability to download free all companies’ financial statements including registration statements, prospectus, 10-K forms, 10-Q forms, 8-K forms.
- Yahoo Finance – Provides simple and clear financial information back several years. It also has calculated future predictions as well as some past results. In addition, you will be able to find the latest news related to the stocks that interest you
- Morningstar – Morningstar has large amount of data information on stocks. Morningstar is investment research firm that compiles and analyzes funds, stocks, and other market data.
When analyzing a company, we need the most accurate information possible. The best information about the company’s financial data comes directly from the company and is audited by a trusted audit firm.
There are four main sources of Information for financial analysts:
- Information that the company reports to its shareholders and journalists.
- Data that an enterprise must provide to regulatory units, such as a securities commission.
- Data from various agencies that process original data of companies.
- Electronic databases.
As an analyst, you can make an analysis of a company’s performance from the following three reports: Annual reports (Including 10-K), Current reports (10-Q), and Form 8-K.
There are many online sites through which you can obtain the financial data of the company or even make analyses using their calculated indicators.
When you got your financial data right, the next step is to analyze a company.