Visual 10-K | Apple

Some men read Playboy. I read annual reports — Warren Buffett

Hi there, we hope you enjoyed our Alpha Letter series. We also appreciate your patience over the last two weeks, as we have been busy working on something new.

The idea came from our recent poll — when asked how many of our readers read a 10-K before making their investments, a whopping 75% did not know what a 10-K was, 12% just skimmed it, 9% only read the financials, and only ~4% bothered to read the full report.

For those who don’t know, 10-K is a comprehensive report all public companies¹ in the U.S. must file yearly about their financial performance. It provides valuable information about the company’s financial health, performance, strategy, and management.

However, as Aswath Damodaran highlights here, over time, the SEC has required companies to reveal more & more information², and financial disclosures like 10-Ks have just become data dumps for companies. For example, Goldman Sachs's 10-K is 519 pages, Coca-Cola’s is 309 pages, and Tesla’s is 120 pages.

Another downside of the existing report structure is that 10-Ks don’t provide long-term trends on the company’s financial metrics; at most, 2-3 years of data are analyzed in the report. But, as per Buffett, the best way to find companies with a durable competitive advantage is to look at 10-year trends.

To address both these limitations, we have created a Visual 10-K. Using this, you should be able to gain a deep understanding of how the company works, how it makes money, and how its fundamentals have fared over the last decade, all in one report.

And what company is better to start with than Apple!?

Give it a few seconds, and if the visualization is still not loading in your mail, check it out here.

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1. And some private companies, depending on their holding structure

2. After all, nearly 90 years have passed since the SEC made it mandatory for companies to file a 10-K.