How to Extract Data from 10K Forms: A Step-by-Step Guide

In the context of financial disclosures, the 10K form holds a prominent position. It’s an annual report submitted by US public companies to the Securities and Exchange Commission (SEC). This comprehensive document provides a detailed overview of a company’s financial performance, operations, and potential risks.

Key components of a 10K include:

• Audited financial statements: These offer a snapshot of the company’s financial health. They include the balance sheet, income statement, and cash flow statement.
• Management’s Discussion and Analysis (MD&A): This section provides insights into the company’s performance, strategies, and future outlook.
• Risk Factors: A transparent assessment of the challenges the company might encounter.

The 10K is a vital resource for investors, analysts, and accountants. It aids in informed decision-making, shapes financial models, and drives strategic planning.

However, manually extracting valuable data from these voluminous filings is time-consuming and challenging. Automated data extraction solutions offer a practical alternative. They streamline the process, reduce the chance of errors, and provide access to hidden insights. By leveraging these tools, businesses gain a competitive advantage.

In this blog we will learn about challenges faced while manually extracting data from 10K. We will also explore how to automate it with KlearStack and its numerous benefits.

Common Challenges in Extracting Data from 10K Forms

The extraction of data from 10K forms is fraught with challenges that significantly impact the accuracy, efficiency, and the success of financial analysis and decision-making. Following are the most pressing obstacles:

• Overwhelming Volume and Complexity: 10K forms are extensive documents, spanning hundreds of pages filled with intricate financial data, legal terminology, and nuanced disclosures. Manually extracting specific information from this labyrinthine structure is an arduous and time-consuming task, leading to fatigue and oversight.
  
• Manual Extraction Errors: The manual process of locating, interpreting, and transcribing data is inherently prone to human errors. Typos, missed data points, and misinterpretations easily occur, compromising the integrity of the extracted information and leading to flawed analysis and misguided decisions.
  
• Structured vs. Unstructured Data: 10K forms present a mix of structured (tables, financial statements) and unstructured data (textual descriptions, disclosures). Extracting meaningful insights from unstructured data requires sophisticated techniques that go beyond simple data parsing, adding another layer of complexity to the extraction process.
  
• Inconsistent Formatting: The lack of standardization across 10K filings poses a significant challenge. Each company present its data in a unique format, with variations in table structures, terminology, and levels of detail. This inconsistency necessitates manual adjustments and increases the risk of errors during extraction.
  
• Evolving Regulatory Landscape: Regulatory changes and updates to accounting standards alter the structure and content of 10K forms. Manual extraction processes struggle to keep pace with these changes, leading to outdated and inaccurate data.
  
• Scalability Issues: Analyzing multiple 10K forms or handling frequent updates becomes increasingly impractical with manual methods. The sheer volume of data quickly overwhelm human capabilities, hindering efficiency and limiting the scope of analysis.
  
• Data Security Concerns: Manually handling sensitive financial data raises concerns about data security and confidentiality. The risk of data breaches or unauthorized access increases with manual processes, leading to severe consequences for both individuals and organizations.

The Benefits of Automating 10K Data Extraction

Automating the extraction of data from 10K forms offers a multitude of benefits. It addresses the challenges associated with manual processes. Let’s explore how these tools revolutionize the way financial professionals interact with this critical information source.

• Time Savings and Efficiency: Automated extraction tools parse large volumes of data with remarkable speed. What might take hours or even days to accomplish manually can be completed in minutes. This frees up valuable time for analysis and decision-making. The efficiency gains are substantial, allowing professionals to focus on extracting insights rather than wrestling with data extraction.
  
• Accuracy and Error Reduction: Manual extraction is prone to human errors, such as typos, missed data points, and misinterpretations. Automation significantly reduces the risk of such errors. This ensures data integrity and reliability. The result is more accurate analysis and informed decision-making, built on a solid foundation of trustworthy data.
  
• Customization and Flexibility: Modern automated tools offer extensive customization options. Users can define specific data points they wish to extract, tailoring the process to their unique needs and analysis objectives. This targeted approach eliminates the need to sift through irrelevant information. It allows users to focus solely on the data that matters.
  
• Structured and Unstructured Data Mastery: Unlike manual extraction, automated tools seamlessly handle both structured and unstructured data. They can extract numerical values from tables and financial statements. Additionally, they can glean insights from textual descriptions, footnotes, and disclosures. This comprehensive capability ensures no valuable information is left untapped.

Key Fields to Extract from a 10K Document

While the 10K encompasses a vast array of information, certain fields are particularly valuable for financial analysis and decision-making. Automated extraction tools allow users to target these key fields efficiently, enabling a more focused and insightful analysis.

Let’s explore some of the most important fields to extract from a 10K document:

• Business Overview: A concise summary of the company’s products or services, target market, and competitive environment.
  
• Risk Factors: An in-depth analysis of potential risks, both internal and external, that could impact the company’s operations and financial performance.
  
• Management Discussion and Analysis (MD&A): A narrative explanation of the company’s financial performance, including insights into its strategies and future plans.
  
• Financial Statements: Detailed, audited financial statements, including the balance sheet, income statement, and cash flow statement.
  
• Executive Compensation: Information on how much the company’s top executives are paid, providing insights into corporate governance and compensation practices.
  
• Legal Proceedings: Details on any significant legal proceedings involving the company, which could have material implications for its future.
  
• Selected Financial Data: Key financial metrics and ratios, such as revenue, net income, earnings per share, and return on equity.
  
• Footnotes to Financial Statements: Additional explanations and disclosures that provide context and nuance to the financial statements.
  
• Market Risk Disclosures: Information on the company’s exposure to market risks, such as interest rate fluctuations, foreign currency exchange rates, and commodity pric
  
• Auditor’s Report: An independent assessment of the company’s financial statements by its external auditor, offering assurance on their accuracy and reliability.
  
• Stock Performance: Historical stock price data and information on dividends, stock splits, and other corporate actions.
  
• Corporate Governance and Leadership: Details on the company’s board of directors, executive officers, and corporate governance practices.

Why KlearStack is the Best Tool for Extracting Data from 10K Forms

In the pursuit of efficient and accurate data extraction from 10K forms, KlearStack stands out as a powerful solution. It addresses the complexities and challenges of manual processes, providing a seamless and intelligent approach to gaining valuable financial insights.

Let’s explore the key features that make KlearStack the superior choice for 10K data extraction:

• Template-less Solution: KlearStack’s advanced OCR technology eliminates the need for rigid templates. It extracts data accurately from any document layout, regardless of variations between companies or regulatory changes. This saves valuable time and resources, as there’s no need for constant model retraining.
  
• Multi-lingual Support: With support for over 50 languages, KlearStack transcends language barriers. It enables seamless extraction from 10K forms filed by multinational companies or those operating in diverse markets.
  
• Bulk Document Processing: Efficiency is paramount in today’s fast-paced business environment. KlearStack excels at processing large volumes of 10K documents simultaneously, significantly reducing processing times and accelerating your analysis.
  
• Line-item Data Extraction: Capture every crucial detail, from financial metrics to risk factors, with KlearStack’s line-item extraction capabilities. This ensures accuracy for financial analysis, risk assessment, and informed decision-making.
  
• Multi-page Data Extraction: 10K forms are often lengthy and span multiple pages. KlearStack extracts data seamlessly across all pages, ensuring no critical information is missed, and providing a holistic view of the company’s financial and operational landscape.
  
• Self-Learning Algorithm: KlearStack’s AI-powered engine continuously learns and improves from the data it processes. This translates to increased accuracy over time and reduced reliance on manual intervention.
  
• Seamless Integration: Integrate KlearStack effortlessly with your existing ERP and accounting systems. This eliminates manual data entry, streamlines workflows, and boosts productivity.
  
• Document Classification: Automatically categorize and organize 10K forms based on their content or specific criteria. This simplifies document management and facilitates efficient retrieval and analysis.
  
• Automated Document Splitting: Separate 10K filings from any accompanying attachments, such as exhibits or financial statements. This streamlines data analysis and ensures a focused approach.
  
• Rich Document Audit Engine: Define rules to validate the extracted data, flagging exceptions for review. This robust audit mechanism helps ensure accuracy and minimizes the risk of errors.
  
• Rules-based Workflows: Automate the routing and processing of 10K documents based on predefined rules. This eliminates manual intervention, accelerates workflows, and improves overall efficiency.

8 Steps Guide to Extract Data from 10K forms

KlearStackhelps you extract data quickly and easily.  It saves thousands of hours and delivers output with up to 99% accuracy. Here is a step-by-step guide to extracting data using KlearStack:

Step 1: Register/login to the software

• Once you successfully register with KlearStack as a user, you will get access to the login credentials. Upon entering these, read the terms and conditions carefully, and tick the check box. After this, you can log in to the dashboard, where all the wonders of data extraction start!

Step 2: View the dashboard to upload the documents

• Once logged in, you will see the dashboard from where different documents can be uploaded. From here, you can add and process various documents, including bank statements, tax-related documents, bills, purchase orders, receipts, and over 12 other document types.

KlearStack also has an excellent feature that allows bulk processing of the documents, which means you can upload multiple documents and it will process all of those simultaneously giving you speedy and meticulous results.

Step 3: Upload the Document

• Click on the ‘Add new’ tab. KlearStack allows you to upload documents in different formats such as Electronic PDF, Word, Excel, JPG, BMP, TIFF, PNG or Image, scanned PDF, and ZIP.

Step 4: Select the document type

• Here you can browse your document and upload from sources available.You also have an option to select if the document is for a B2B or B2C transaction. This ensures better categorization and storage of your data and streamlines your further process of data collection when it comes to final reporting.
• Click on Done to proceed.

Step 5: View the added document

• Your most recently uploaded document will appear on top. Uploaded documents with their extracted data appear here, providing a quick snapshot of all necessary information at any given time

Step 6: Click to check the extracted data

• For detailed information you can click on the uploaded document, you will see all the fields on one part of the screen and the uploaded document on the other. Here you can scroll and check all the extracted data.

If you wish to understand where the information has been picked from, simply click on that particular field and it will get highlighted on the uploaded document. If the information is incorrect, you can edit it here. This will retrain the model for future use. Once done, click on ‘Save’.

Step 7: Click on approve

• Once you’ve verified the details are correct, click on “Approve.” The models are trained to capture data quickly and accurately.

Step 8: View the document on the dashboard

• Once approved, go back to the dashboard and you will see your document there with the approval sign. Here you will be able to see all the documents and data extraction done from each.

Make informed decisions faster with 100% data accuracy

The challenges of manual 10K data extraction are undeniable. Hours spent sifting through complex filings, the constant risk of errors, and the struggle to keep pace with regulatory changes is hindering your progress and leaving valuable insights undiscovered.

Don’t let these obstacles limit your success. KlearStack’s automated 10K data extraction solution offers a transformative path forward. Leverage the efficiency, precision, and competitive edge that come with seamless access to critical financial data. KlearStack empowers you to make informed decisions faster.

Move beyond manual limitations and optimize your 10K data insights with KlearStack.Stay ahead with the latest trends and techniques in data extraction. Book a DEMO Call now to troubleshoot your problems and increase efficiency by 500%, while saving 80% on document data entry and auditing costs.