5 Steps To Reading A 10k Or Financial Report Daily In 30 Minutes Or Less

How do you read a 10-k if you only have 30 minutes daily or less? Reading the 10-k or other financial docs remains the #1 way to learn about a business and investing. Below is my method if I lack time.

Step 1: Read the biz description. If I don't understand, I throw it in the too-hard pile and move on to the next company. If you don't understand how a company makes money, we will struggle to analyze or value the biz. We don't have to swing at every pitch and can move on.

Step 2: Read the bolded parts of the risk section, looking for non-lawyer items that jump out to me. If something catches my eye, read deeper on the particular risk. Remember that lawyers write 10-ks and spend a lot of time ensuring they cover everyone's butt.

Step 3: Read the MD&A (Management Discussion & Analysis). Here we get a sense of management, what makes them tick, and what's important to them and the biz, plus we get insights into what drove the biz for the past year.

Step 4: Browse through the notes section on the debt and segment info. We are looking for breakdowns of the different segments driving the biz and any debt info that can help determine the investment's risk.

Step 5: Take notes along the way, asking yourself questions you can answer at any further point. Typically, I don't focus much on the financials at this point because to dig into the business, I would have found something interesting to start.

Remember, if you only have a little time, you can focus on one business a week or split up your reading over several days. I used to do this during my lunch breaks at my 9-5.

I hope this helps and would love to hear how anyone tackles this idea or if they have a better method.