1 min read
While you can use other reports for financial analysis, the 10-K is highly recommended to review the financial, legal and risk information about your vendor. The 10-K is formatted identically for all publicly traded companies, and is more detailed than just the audited financials.
Here are 3 areas to look out for in your vendor 10-K's:
- What are the risk factors? These should be reviewed in detail with special note to any regulatory action that might have occurred.
- Legal proceedings or law suits. Determine if there are any legal proceedings or law suits pending and if there are, what is the estimate of the anticipated settlement charges?
- An auditor’s opinion. Do read both the auditors opinion on the financials AND their assessment of the adequacy of internal controls. Also pay special attention to their comments on comprehensive income.
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