Reading a 10-K
Where the numbers in every model actually come from.
Every other module here assumes you already have revenue, EBITDA, net debt and a share count. This one is about where those come from. A 10-K is the annual report a US-listed company files with the SEC, and it is the primary source: not a summary, not an aggregator, not a press release. Learning to navigate one is the difference between an analyst who can build a model and one who can defend it, because the first question anybody senior asks is where a number came from. A 10-K runs to a hundred pages or more, and almost none of it is read front to back. What matters is knowing which five sections carry the figures a valuation needs, and which sentences in the notes quietly change them.
What this course covers
- 01Start with the cover page, not the statements
- 02Read Item 7 before Item 8
- 03Take the three statements, then go straight to the notes
- 04Build net debt from the debt note, not the balance sheet
- 05Find the diluted share count and the option overhang
- 06Check the segment note before you pick peers
What you will be able to do
- Sourcing historical financials for any model, in preference to a data vendor
- Finding the diluted share count, the debt schedule and the lease obligations
- Understanding revenue recognition, segments and customer concentration
- Checking whether a figure a peer reports is defined the same way
Where it does not apply
- Forward estimates: a 10-K is historical, guidance lives in the earnings release and the call
- Non-US issuers, which file a 20-F or report under local rules instead
- Anything time-critical intraday: a 10-K arrives weeks after the quarter it describes
Predict it first
Not markedDanubia Consumer Brands Plc settles an acquisition in stock. The share count goes from 120m to 140m. The businesses are combined, but assume for the moment that the operating forecast in the model is unchanged.
ChangeDiluted shares: 120m → 140m
How this prepares you for the assessment
This is one of 17 courses, and none of them is required for the Verified Valuation Assessment. The credential is earned on two timed drills, graded by the same engine that checks this course, and the drill score decides what it says you are capable of, from Foundation through to Distinction.
- Distinction90%+Works independently across all three core methods.
- Merit75%+Builds the core models with limited supervision.
- Pass60%+Understands the mechanics; works through a model with guidance.
- FoundationcompletedKnows the vocabulary and the shape of each model.