2.10 Summary and Conclusion

The major objective of this chapter was to introduce you to the source company filing that is now available so that you can learn-by-doing to become acquainted with the Interactive Data Disclosure applied to real world companies.  In fact, today this document is so comprehensive and the disclosures are made under the implied penalties and conditions required from two major Acts:  the Regulation Fair Disclosure or Regulation FD of August 2000 and the Sarbanes-Oxley Act of 2002 which overhauled regulation in relation to public company accounting reforms and investor protection.  Both of these acts have ensured that the content and the reports filed with the SEC are more credible than ever before.  Management provides frank assessments of their business and it is the necessary starting place for any analyst who is attempting to understand the nature of the business.   As we discussed in the introduction, the overriding objective that governs disclosures today is transparency.  This includes making it more difficult to re-engineer consolidated financial statements by creating special purposes entities that technically may escape consolidation. 

In this chapter, we described the four major financial statements. In subsequent chapters you will learn how to work with the data.  In the next chapter, you will learn how to measure business efficiency in the context of a company’s business strategy.