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Learning to Invest / Reading Financial Statements


Subject:  Re: most accurate financial statistics on stocks Date:  4/16/2012  4:08 PM
Author:  JustMee01 Number:  3871 of 3978

"Is ALL of the basic financial information found in there? or is there any other form that is pertinent?"

Yes and no.

Company presetnations on their websites have a lot of good information. And much of the metrics that you're looking for like ROE and margins may need to calculated from raw numbers. Sites do that for you, but can make mistakes. Comparing data from Morningstar or Yahoo with your own numbers may help you check your work, so to speak.

For US corporations whose stocks are traded on exchanges, EDGAR is comprehensive. For foreign based multinationals, you'll find some of their information, listed in form 20-F. But, often current reports and proxy statements will not be available. Some people like annual reports. I find them a poor substitute for the 10-K. The results are too edited and the presentations can be favorably slanted. 10-Ks tend to be more like Joe Friday: "just the facts ma'am."

A few Canadian based companies trade on both exchanges and file with both the SEC and the Canadian equivalent of the SEC. The collection of forms for these will be pretty comprehensive at the SEC. For those traded only out of Toronto, you'll need to go to their equivalent (SEDAR).

For some Chinese companies that list here, the 20-F data on EDGAR can be questionable and sometimes late. And current reports are sparse at best.

And even for some US companies that trade over the counter, or worse yet, that only have debt issuances, the amount of infomation on EDGAR can sometimes be sparse. But, for all US traded equities (even those with limited disclosure), EDGAR is the most comprehensive source out there, because its the official depository that everyone else extracts information from.

Getting used to finding your way around EDGAR and learning how to read a 10-Q or 10-K is a useful skill. It's not easy to get used to the docs, but you'll find that each one you read will help you learn how to get through the next more efficiently and effectively. Jsut keep reading and eventually you'll find that you'll start to understand some of it. Tnen you'll get a little more and a little more. It just takes some time...


(And ask questions. Mike and others have answered plenty of questions for lots of people; especially me...)
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