SEC Form ARS

SEC Form ARS: An Overview

U.S. Securities and Exchange Commission (SEC) Form ARS, or the Annual Report to Shareholders, is a document used by a public company to report its latest financial performance to its shareholders shortly before its annual shareholders' meeting.

Form ARS is not required to be filed with the SEC. Instead, it is intended as a direct communication from a company's executives to its shareholders. It summarizes the company's latest financial performance and may also contain hints about its future direction.

In recent years, most public companies have combined or replaced the Form ARS with the Form 10-K, which contains more comprehensive financial information and must be filed with the SEC.

Understanding Form ARS

A typical SEC Form ARS will include a summary of the year's major events and a list of some of its accomplishments and future plans as well as detailed financial information regarding the last year's operations.

This document and the company's proxy statement are essential reading for fundamental analysts who study the ongoing business of a company in order to determine whether it makes a good investment for the future.

An annual report is a document that public corporations must provide annually to shareholders that describes their operations and financial conditions. The front part of the report often contains an impressive combination of graphics, photos, and an accompanying narrative, all of which chronicle the company's activities over the past year and may also make forecasts about the future of the company. The back part of the report contains detailed financial and operational information.

Information Contained in the ARS

The ARS contains financial statements for each period since its last annual meeting and for the previous year as a whole. Financial statements include:

The more comprehensive SEC Form 10-K must also provide an overview of the company's major operations, an outline of known risk factors to the business, specific financial data covering the past five years, and commentary from the management as well as a full financial report.

The breakdown below shows what a Form ARS will typically include:

Stock analysts use SEC Form ARS or Form 10-K to track a company's financial results and form an opinion on its value as an investment.

The ARS may cover additional information as its executives see fit, including reports on the company’s social responsibility policy, a description of its manufacturing operations, and any other details considered useful for shareholders and potential investors.

Presentation of the ARS

The ARS is, to some extent, a public relations (PR) or investor relations (IR) document. As such, it is usually published on high-gloss paper with photos, images, and compelling graphics.

The Form 10-K, on the other hand, is a more detailed version of the Form ARS and is submitted to the SEC, without many of the bells and whistles. That is why many companies forego a separate ARS and provide shareholders only with a copy of its 10-K.