Enjoyed this video? Then subscribe to the channel right now, and watch the related videos in the how to read an annual report playlist: th-cam.com/video/Kw-1nopchnA/w-d-xo.html
Thank you very much! Please spread the word to friends and colleagues. :-) This video about the 10-K is part of a playlist "How to read an annual report": th-cam.com/video/Kw-1nopchnA/w-d-xo.html
You're welcome! I think you will enjoy the related video about the MD&A (Management Discussion and Analysis) that is part of a 10K and the annual report, as well: th-cam.com/video/LD6YBBtpEcs/w-d-xo.html
First video I have seen from your channel. You do a great job explaining things through, even suggesting where to start; and making it seem all very easy. Already sent this video to all my friends Will definitely have to check your other content.
Thank you very much for the kind words. I think you will enjoy this playlist with various examples on how to read an annual report: th-cam.com/video/Kw-1nopchnA/w-d-xo.html
Hello there. Thank you for this video! I'm sure this is a silly question, but since I'm a developer and not an accountant or business owner, I hope my lack of knowledge in the world of finance can be forgiven. I'm currently writing an algorithm to align fiscal years to the calendar year by performing calendarization. I noticed that 10-K reports show the following line: "For the fiscal year ended...", which is followed by a date. For fiscal years which do not align with the calendar year, does the year in this date indicate the year being reported? Or does it simply indicate the end of the fiscal year, meaning that the year for which the company is reporting is actually the year prior (again, assuming a non-standard fiscal year)? I'm surprised how difficult it is to get a direct answer to this question. My assumption is that it indicates the year being reported on, regardless of the year in which the fiscal year started, but I wanted to be sure.
Hello William! I love your project. These fiscal years that are different from calendar year make my job more difficult. Your main question is "For fiscal years which do not align with the calendar year, does the year in this date indicate the year being reported?". I would tend to answer "yes", but I am not sure whether this is a "hard rule" versus a "fluid convention". If you do a Google search on "sec guidance on fiscal year vs calendar year", you will find a table compiled by West Chester University that sounds logical, but for which I can find an example that agrees with this logic (Apple) and one that disagrees (Walmart). See below. I could not find any guidance on fiscal year directly coming from the SEC. To answer your question, let's look at the latest annual report of Apple. "Form 10-K For the Fiscal Year Ended September 24, 2022". If you go to the financial statements, which are in Item 8 of the report, you will see in the "CONSOLIDATED STATEMENTS OF OPERATIONS" that the past three fiscal years ended on September 24, 2022, September 25, 2021, and September 26, 2020. The "CONSOLIDATED STATEMENTS OF OPERATIONS" then reports the figures for the 12 months leading up to this date. Apple's fiscal year does not even finish at the end of a calendar month! Apple ends its fiscal year on the last Saturday of September. What Apple calls FY22 runs from September 26, 2021 through September 24, 2022. What Apple calls FY21 runs from September 27, 2020 through September 25, 2021. So at least for Apple, nearly 9 months of their fiscal year 2022 overlap with the calendar year 2022, and the remaining 3 months were "borrowed" from calendar year 2021. With Walmart, the overlap between their fiscal year and the calendar year is far less. Walmart's fiscal year 2023 ended on January 31, 2023, so it includes 1 month from calendar year 2023 and 11 months from calendar year 2022. At least they consistently end their fiscal year on January 31st every year! When I look outside the US, there is a company in Japan whose financial results I follow: Mitsubishi Chemical Group Corporation. Their FY2022 runs from April 1, 2022 through March 31, 2023. In other words, their fiscal year ends later than the calendar year, which seems to be the opposite of how US-based companies would do it. Hope this helps! Sorry for not being able to provide a conclusive answer.
@@TheFinanceStoryteller This is extremely helpful information. Yesterday, I found a company called Fresh Del Monte Produce Inc (FDP). They have an interesting 10-K report for 2021 (well actually 2020). In that report, if you look at their last revenue/sales for the past three years, you'll notice that the 2020 year end date is not accounted for, even though 2018 and 2019 are accounted for. It seems that for 2018 and 2019, the year end date aligned with the year being reported, but then suddenly in 2020, the year end date became January 1st of 2021. I believe they even follow the calendar year. I have yet to find a way to conclusively determine what year is actually being reported on in a 10-K. I'm sure the answer is out there somewhere. Your feedback has been enlightening. Thank you!
Happy to help. I just had a look at FDP as well. Go to the section called "CONSOLIDATED STATEMENTS OF OPERATIONS". The years ended on January 1st, 2021, December 27th, 2019, and December 28th, 2018. All of them are Fridays. In Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, they have a note on the fiscal year: Our fiscal year end is the last Friday of the calendar year or the first Friday subsequent to the end of the calendar year, whichever is closest to the end of the calendar year. Fiscal year 2020 had 53 weeks and ended on January 1, 2021. Fiscal year 2019 had 52 weeks and ended on December 27, 2019. Fiscal year 2018 had 52 weeks and ended on December 28, 2018. Apple has their disclosure on how their fiscal year works in the Notes to Consolidated Financial Statements - Note 1 - Summary of Significant Accounting Policies: The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which will occur in the first quarter of the Company’s fiscal year ending September 30, 2023. The Company’s fiscal years 2022, 2021 and 2020 spanned 52 weeks each. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years. Another company that I track, Medtronic, has the fiscal year disclosure in that same note 1 Summary of Significant Accounting Policies section: Fiscal Year-End The Company utilizes a 52/53-week fiscal year, ending the last Friday in April, for the presentation of its consolidated financial statements and related notes thereto at April 29, 2022 and April 30, 2021 and for each of the three fiscal years ended April 29, 2022 (fiscal year 2022), April 30, 2021 (fiscal year 2021), and April 24, 2020 (fiscal year 2020). Fiscal year 2021 was a 53-week year, with the extra week having occurred in the first fiscal month of the first quarter. So I think your quest might take you on a company-by-company basis through the respective 10-K reports, by doing a CTRL-F search in the PDF for "fiscal year" to find the narrative around it. ;-) Rather than a generic rule, it seems to be a case-by-case elective. That certainly doesn't make it easier to standardize it, and put it into an algorithm.
@@TheFinanceStoryteller Yes, it has certainly been very difficult to standardize all the data. Luckily, the developers of the API that I use to gather data seem to know how to reliably determine the fiscal year being reported, although they don't provide much of an explanation for each of the columns in their data sets. The column which seems to align with the fiscal year is actually called calendar year which is actually quite misleading, and it's the exact reason I've begun researching this topic. Initially, I tried gathering, parsing, and cleaning the data provided directly by the SEC, but this proved to be far too difficult. Many countries use their own accounting practices. Then there's GAAP vs. IFRS, and it's all quite messy.
I loved this and was wondering if you could do one of these for a fund?? I’m trying to understand my “Pioneer Fund”. Ticker symbols PIODX, PCODX, PIOKX, PIORX, PYODX”... thanks if you do it. Or point me to a video....
Thank you, Chris! I will add it to my list of topics to think about. In the meantime, maybe my video on ETFs can help you with a bit of the terminology: th-cam.com/video/GBLNKbOgQ4w/w-d-xo.html
that's funny! i remember when this company was pitching their flexible spending accounts and kept referring to them as FSA's meanwhile the name of my company was FSA (financial security assurance)
![How to Read Annual Report of any Company [+Worksheet] | Learn & Understand Annual Report Analysis](http://i.ytimg.com/vi/V28LpTApAww/mqdefault.jpg)
Enjoyed this video? Then subscribe to the channel right now, and watch the related videos in the how to read an annual report playlist: th-cam.com/video/Kw-1nopchnA/w-d-xo.html
These types of videos should be part of a curriculum !! Keep'em coming !
Thank you very much! Please spread the word to friends and colleagues. :-) This video about the 10-K is part of a playlist "How to read an annual report": th-cam.com/video/Kw-1nopchnA/w-d-xo.html
Thank you! There is very little information about 10-K forms on TH-cam. Really appreciate it!
You're welcome! I think you will enjoy the related video about the MD&A (Management Discussion and Analysis) that is part of a 10K and the annual report, as well: th-cam.com/video/LD6YBBtpEcs/w-d-xo.html
First video I have seen from your channel. You do a great job explaining things through, even suggesting where to start; and making it seem all very easy. Already sent this video to all my friends
Will definitely have to check your other content.
Thank you very much for the kind words. I think you will enjoy this playlist with various examples on how to read an annual report: th-cam.com/video/Kw-1nopchnA/w-d-xo.html
Very Nice of you to share that :)
This was so helpful, Thank you for explaining it so clearly
Great to hear that, Rajat! I enjoy sharing my knowledge.
Thank you so much for sharing such useful data! Greatly appreciated.
Very nice to hear that! :-)
Well done! Thanks!
Happy to help! More related videos on various aspects of the 10-K in this playlist: th-cam.com/play/PLKbmcnUUQMllEvFvqN-AIcXt8dj6LH-IQ.html
Hello there. Thank you for this video! I'm sure this is a silly question, but since I'm a developer and not an accountant or business owner, I hope my lack of knowledge in the world of finance can be forgiven. I'm currently writing an algorithm to align fiscal years to the calendar year by performing calendarization. I noticed that 10-K reports show the following line: "For the fiscal year ended...", which is followed by a date. For fiscal years which do not align with the calendar year, does the year in this date indicate the year being reported? Or does it simply indicate the end of the fiscal year, meaning that the year for which the company is reporting is actually the year prior (again, assuming a non-standard fiscal year)? I'm surprised how difficult it is to get a direct answer to this question. My assumption is that it indicates the year being reported on, regardless of the year in which the fiscal year started, but I wanted to be sure.
Hello William! I love your project. These fiscal years that are different from calendar year make my job more difficult. Your main question is "For fiscal years which do not align with the calendar year, does the year in this date indicate the year being reported?". I would tend to answer "yes", but I am not sure whether this is a "hard rule" versus a "fluid convention". If you do a Google search on "sec guidance on fiscal year vs calendar year", you will find a table compiled by West Chester University that sounds logical, but for which I can find an example that agrees with this logic (Apple) and one that disagrees (Walmart). See below. I could not find any guidance on fiscal year directly coming from the SEC.
To answer your question, let's look at the latest annual report of Apple. "Form 10-K For the Fiscal Year Ended September 24, 2022". If you go to the financial statements, which are in Item 8 of the report, you will see in the "CONSOLIDATED STATEMENTS OF OPERATIONS" that the past three fiscal years ended on September 24, 2022, September 25, 2021, and September 26, 2020. The "CONSOLIDATED STATEMENTS OF OPERATIONS" then reports the figures for the 12 months leading up to this date. Apple's fiscal year does not even finish at the end of a calendar month! Apple ends its fiscal year on the last Saturday of September.
What Apple calls FY22 runs from September 26, 2021 through September 24, 2022.
What Apple calls FY21 runs from September 27, 2020 through September 25, 2021.
So at least for Apple, nearly 9 months of their fiscal year 2022 overlap with the calendar year 2022, and the remaining 3 months were "borrowed" from calendar year 2021.
With Walmart, the overlap between their fiscal year and the calendar year is far less. Walmart's fiscal year 2023 ended on January 31, 2023, so it includes 1 month from calendar year 2023 and 11 months from calendar year 2022. At least they consistently end their fiscal year on January 31st every year!
When I look outside the US, there is a company in Japan whose financial results I follow: Mitsubishi Chemical Group Corporation. Their FY2022 runs from April 1, 2022 through March 31, 2023. In other words, their fiscal year ends later than the calendar year, which seems to be the opposite of how US-based companies would do it.
Hope this helps! Sorry for not being able to provide a conclusive answer.
@@TheFinanceStoryteller This is extremely helpful information. Yesterday, I found a company called Fresh Del Monte Produce Inc (FDP). They have an interesting 10-K report for 2021 (well actually 2020). In that report, if you look at their last revenue/sales for the past three years, you'll notice that the 2020 year end date is not accounted for, even though 2018 and 2019 are accounted for. It seems that for 2018 and 2019, the year end date aligned with the year being reported, but then suddenly in 2020, the year end date became January 1st of 2021. I believe they even follow the calendar year. I have yet to find a way to conclusively determine what year is actually being reported on in a 10-K. I'm sure the answer is out there somewhere. Your feedback has been enlightening. Thank you!
Happy to help. I just had a look at FDP as well. Go to the section called "CONSOLIDATED STATEMENTS OF OPERATIONS". The years ended on January 1st, 2021, December 27th, 2019, and December 28th, 2018. All of them are Fridays. In Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, they have a note on the fiscal year: Our fiscal year end is the last Friday of the calendar year or the first Friday subsequent to the end of the calendar year, whichever is closest to the end of the calendar year. Fiscal year 2020 had 53 weeks and ended on January 1, 2021. Fiscal year 2019 had 52 weeks and ended on December 27, 2019. Fiscal year 2018 had 52 weeks and ended on December 28, 2018.
Apple has their disclosure on how their fiscal year works in the Notes to Consolidated Financial Statements - Note 1 - Summary of Significant Accounting Policies:
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which will occur in the first quarter of the Company’s fiscal year ending September 30, 2023. The Company’s fiscal years 2022, 2021 and 2020 spanned 52 weeks each. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
Another company that I track, Medtronic, has the fiscal year disclosure in that same note 1 Summary of Significant Accounting Policies section:
Fiscal Year-End The Company utilizes a 52/53-week fiscal year, ending the last Friday in April, for the presentation of its consolidated financial statements and related notes thereto at April 29, 2022 and April 30, 2021 and for each of the three fiscal years ended April 29, 2022 (fiscal year 2022), April 30, 2021 (fiscal year 2021), and April 24, 2020 (fiscal year 2020). Fiscal year 2021 was a 53-week year, with the extra week having occurred in the first fiscal month of the first quarter.
So I think your quest might take you on a company-by-company basis through the respective 10-K reports, by doing a CTRL-F search in the PDF for "fiscal year" to find the narrative around it. ;-) Rather than a generic rule, it seems to be a case-by-case elective. That certainly doesn't make it easier to standardize it, and put it into an algorithm.
@@TheFinanceStoryteller Yes, it has certainly been very difficult to standardize all the data. Luckily, the developers of the API that I use to gather data seem to know how to reliably determine the fiscal year being reported, although they don't provide much of an explanation for each of the columns in their data sets. The column which seems to align with the fiscal year is actually called calendar year which is actually quite misleading, and it's the exact reason I've begun researching this topic.
Initially, I tried gathering, parsing, and cleaning the data provided directly by the SEC, but this proved to be far too difficult. Many countries use their own accounting practices. Then there's GAAP vs. IFRS, and it's all quite messy.
It's an art as well as a science. 😉
I loved this and was wondering if you could do one of these for a fund?? I’m trying to understand my “Pioneer Fund”. Ticker symbols PIODX, PCODX, PIOKX, PIORX, PYODX”... thanks if you do it. Or point me to a video....
Thank you, Chris! I will add it to my list of topics to think about. In the meantime, maybe my video on ETFs can help you with a bit of the terminology: th-cam.com/video/GBLNKbOgQ4w/w-d-xo.html
If you are here because you think a 10k is long race you clicked on the wrong video.
Good one! :-) I once delivered training at a company where the acronym PO meant Profit Objective (annual plan/budget) instead of Purchase Order.
that's funny! i remember when this company was pitching their flexible spending accounts and kept referring to them as FSA's meanwhile the name of my company was FSA (financial security assurance)
Thank you
You're welcome! I have a few related videos on various aspects of the annual report in this playlist: th-cam.com/video/LD6YBBtpEcs/w-d-xo.html