By: Montana Timpson
With the dawn of 2021 upon us, stakeholders and the public alike prepare for a wave of last year’s highly anticipated annual earnings reports. Though there are many exceptions, a large majority of U.S. companies define their fiscal year-end simultaneously with the calendar year-end, and, as SEC guidelines require, we expect to see all relevant final earnings announced within 90 days of the New Year.
Understanding Annual Earnings Reports
An annual earnings report is a financial summary issued to shareholders by a public company that shows expenses, earnings, and overall profit over the span of a company’s fiscal year.
Annual earnings reports are intended to give shareholders, analysts and the public a recap of the company’s activities and financial performance in the fiscal year preceding. Earnings announcements are carefully watched, with positive or poor performance reports often linked to immediate (even if only temporary) swings in the stock’s value. Under SEC proxy rules, reporting companies are required to post their proxy materials, including their annual reports, on their company websites, allowing the public access to company reports.
Along with company earnings, annual reports might include results of operations, market segment information, new product plans, subsidiary activities, and research and development activities on future programs.
SEC requirements dictate that each public U.S. company file yearly earnings reports on a 10-K Form, which is submitted directly to the U.S. Securities and Exchange Commissions. Information required in Form 10-K includes a company’s history, organizational structure, financial statements, earnings per share, subsidiaries, and executive compensation.
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