Locating Financial Information

Getting Information from the Company Itself

Getting Information from the SEC

Interpreting Financial Information

Assessment


Locating Financial Information

Now that you've found a company that meets your initial research specifications, it's time to find some more specific information about that company's financial condition. Companies of all sizes generate a lot of numbers. In this module, you'll learn how to go about finding a company's financial information.

But finding these numbers is only part of the process. Once you've located a company's numbers, you'll need to interpret them. How a company's numbers are interpreted will be different for different companies and different researchers. In this module, you'll also learn how to make a company's information work for you.

Where can I find sources of financial information about a company?

The three main sources of financial information are
1. the company itself
2. the Securities and Exchange Commission or SEC (for public corporations)
3. third-party sources such as industry analysts and the news media


The sources that will be most valuable to you depend on the company you are researching.

A major factor that will determine what kind of information is available, how much, and from where is the status of the company you are researching -- is it a public or a private company? Public companies are required by law to disclose certain kinds of information to the SEC: private companies are not bound to do so. This does not mean that you will not be able to find detailed information about private companies, but you will have to use different sources and strategies depending on whether your chosen company is public or private.


Guidestar

For private companies that are also nonprofit, Guidestar may be able to help you locate financial data. Guidestar (http://www.guidestar.org) is a nonprofit organization whose website provides information about the operations and finances of thousands of nonprofit organizations in the US and the UK. It is freely available over the web for anyone to search.

	More sources on the Web: Wide access to all federal agencies is available through Firstgov -- very useful for information on recalls, etc., which affect company prospects. uschamber.org has an extensive Business Resources section as well as a Research and Statistics Center. For these resources and more, visit the Resources page.

How accurate is this information?

Do numbers speak for themselves? Sure, but they may say different things to different people -- what was it Mark Twain said about lies, damn lies, and statistics? The important thing to keep in mind when evaluating financial information is the story behind the numbers and the credentials of the source.

What is the source of your information? The SEC presents unbiased, raw data, but when some elements are highlighted, others necessarily move to the background. A company's own website is essentially a marketing tool. It will almost inevitably highlight positive information, and is under no obligation to present negative information. A report about a company in a newspaper may be the result of hard-nosed investigative journalism, or it may be a puffy reworking of a company's press release.

None of which is to say that one source of information is inherently more or less useful or reliable than others. What is important is to keep your reasons for research at the forefront of your mind, and to choose your resources carefully.

In the following sections of this module, we'll examine in more detail the first two sources of information about companies -- the companies themselves, and the SEC. We'll look at finding and interpreting information derived from the news media and industry analysts in Modules 4 and 5.