The Differences Between Annual Report and 10-K Report
Public traded companies in the United States are required to provide files with a host of documents in regard to the Securities and Exchange Commission (SEC) to reveal the information about finance and future plans. The most provided documents are the annual report and 10-K report. These documents are prepared to offer an insight to the investors and shareholders about the company’s progress. However, there are notable differences between the two documents. In effect, the paper will focus on highlighting the key discrepancies between the annual report and 10-K report provided by Avocent company.
Avocent is a company the deals with the manufacturing of information technology products and uses both annual report and 10-K report to determine their financial performance annually. One of the noticeable differences between the two is that; the annual report is always colored, professionally presented, and is attached with a marketable document whose audiences are shareholders. On the other hand, the 10-K report is prepared and presented to the Security and Exchanged Commission in a generic manner. In this report, there are no pictures or charts involved. This is SEC has strict guidelines on what the report should include and how it should be organized. It is not an easy report to fathom. It tends to be lengthy and complex than the annual report.
While the annual report may be considered a shorter version of the 10-K report, its design and intent are distinctly separate. That being said, the investors or shareholders find it to comprehend the information provided in the report. The financial information can be acquired from the balance sheet, income statement, or any other useful financial information details provided. On the other hand, the 10-K report is full of descriptions of the company’s financial activities. The report comprises of risks, legalities market performance, and corporate agreements. The full details of the report are acquired from an analysis of the industry and market place as a whole.
The annual report is always sent to the shareholders each year ahead of the annual meeting and voting of the board of directives. The report plays a critical role in guiding the shareholders in a manner to vote to achieve the intended purpose of the company. Furthermore, the report is vital for the board of directors to discuss the future of the company based on the financial standings of that year. In contrast, the 10-K report is sent to the SEC each year, and the deadline for filing the report is between 60 and 90 days of the company’s fiscal year. This also depends on the size of the company. Moreover, the 10-K report documents are found on the SEC’s website while the annual report documents are found on the company’s website. In this case, the annual report may include company information, financial report, and an informative letter to the CEO. On the other hand, the 10-K report may consist of risks, legalities, and operations related to the company.
It is imperative to note that both reports play a pivotal role in determining the future and performance of companies or organizations. Despite the differences highlighted, the primary intention is to offer an insight into how businesses can be well-handled to meet their intended goals. Further, they act as a reminder that companies should operate within set guidelines.