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Glossary of SEC filing and stock research terms
What the filings are, what the insider forms report, how the common financial metrics are calculated, and what each part of a RockTurners verdict means. Every filing and form definition links to the SEC or the Code of Federal Regulations, so you can check the rule itself.
Updated
SEC filings and EDGAR
The documents public companies file with the U.S. Securities and Exchange Commission, and the system that publishes them.
- EDGAR
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EDGAR (Electronic Data Gathering, Analysis, and Retrieval) is the SEC’s public filing system. Public companies submit their annual, quarterly and current reports, proxy statements and insider forms through it, and anyone can read them free at sec.gov. EDGAR is the primary evidence source for every RockTurners read: each claim in a verdict cites the filing it came from.
- Central Index Key (CIK)
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The Central Index Key is the permanent number the SEC assigns to every company and person that files on EDGAR. A ticker can change or be reused, but a CIK stays with the filer, so it is the reliable way to tie filings, financial data and insider reports to the same company across years.
- Accession number
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An accession number is the unique identifier EDGAR gives each filing, in the form 0001234567-26-000123: the submitting agent’s CIK, a two-digit year and a sequence number. It names one exact document set, so it distinguishes an original filing from a later amendment and lets a reader open precisely the filing a claim refers to.
- Form 10-K (annual report)
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Form 10-K is the annual report a U.S. public company files with the SEC. It covers the business (Item 1), risk factors (Item 1A), legal proceedings, management’s discussion and analysis (Item 7), and the audited financial statements and notes (Item 8). It is the most complete single picture of a company and the anchor document of most filing-based research.
- Form 10-Q (quarterly report)
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Form 10-Q is the quarterly report filed for each of the first three fiscal quarters. Its financial statements are reviewed but not audited, and it carries a shorter MD&A plus any material changes to the risk factors since the last 10-K. Reading the latest 10-Q beside the 10-K keeps the risk picture from being up to a year old.
- Form 8-K (current report)
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Form 8-K is the current report a company files, usually within four business days, when a material event occurs: a major agreement, an acquisition or disposal, quarterly results, an auditor change, a restatement warning, or a director or officer departure. Each event is reported under a numbered item, such as Item 2.02 for results of operations or Item 5.02 for leadership changes.
- Earnings release (Exhibit 99.1)
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An earnings release is the press release a company issues with its quarterly results. It is usually furnished to the SEC as Exhibit 99.1 to a Form 8-K under Item 2.02, often weeks before the 10-Q. It typically carries headline figures and any non-GAAP measures management prefers, which is why it is read alongside the reported statements rather than instead of them.
- Proxy statement (DEF 14A)
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A definitive proxy statement, filed as DEF 14A, is the document shareholders receive before a meeting at which they vote. It discloses executive compensation, the board’s composition and independence, related-party transactions, and the beneficial-ownership table of directors, officers and large holders. Many 10-K governance items are satisfied by pointing to it.
- MD&A (management’s discussion and analysis)
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MD&A is the section in which management explains, in prose, what drove the results: revenue and cost trends, liquidity and capital resources, known trends and uncertainties, and critical accounting estimates. It is Item 7 of the 10-K and Item 2 of the 10-Q, and it is where the reasons behind the reported numbers are usually found.
- Risk factors (Item 1A)
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Risk factors are the material risks that make an investment in the company speculative or risky, as the company itself describes them. They appear in Item 1A of the 10-K, and each 10-Q discloses any material changes since then in Part II, Item 1A. Reading both gives the current list rather than one that may be months old.
- Executive compensation disclosure
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Executive compensation disclosure is the proxy statement’s account of what the top executives were paid and why: the compensation discussion and analysis, the summary compensation table, equity awards and grants, and any pay-versus-performance comparison. It shows how pay is tied to results, which is one way to read how management’s incentives line up with the company’s.
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A related-party transaction is a deal between the company and a related person: a director, executive officer, nominee, an immediate family member of one, or a holder of more than 5% of its voting stock. Regulation S-K requires disclosure when the amount exceeds $120,000 and the related person has a material interest. The proxy statement is the usual place to find them.
- Amended filing (/A)
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An amended filing corrects or completes an earlier one and carries the original form name with an /A suffix, such as 10-K/A or 8-K/A. An amendment can restate numbers, add a missing exhibit, or supply Part III information omitted from a 10-K. Research that reads a company’s filings has to notice amendments, or it may rely on figures that were later replaced.
- Incorporation by reference
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Incorporation by reference is when a filing satisfies an item by pointing to another document instead of repeating it. Two common 10-K cases: the governance and pay items in Part III, which usually point to the proxy statement, and MD&A and financial statements that point to the annual report to shareholders filed as Exhibit 13. The pointer itself contains none of the substance.
- IPO prospectus (S-1 and 424B4)
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A company going public registers its shares on Form S-1, and its final prospectus is usually filed under Rule 424(b), most often as a 424B4. The prospectus carries the business description, risk factors, MD&A and audited financial statements. Until a newly public company files its first 10-K, the prospectus is the fullest description of the business on record.
- Late-filing notice (NT 10-K, NT 10-Q)
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A late-filing notice is the Form 12b-25 a company files when it cannot file a 10-K or 10-Q on time, appearing on EDGAR as NT 10-K or NT 10-Q. It gives the company a short grace period and states the reason for the delay. The reason matters: a routine scheduling problem and an unresolved accounting question read very differently.
- Foreign private issuer (20-F, 6-K)
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A foreign private issuer is a non-U.S. company that reports to the SEC under its own regime: an annual report on Form 20-F (or Form 40-F for eligible Canadian companies) and interim or current reports on Form 6-K, instead of the 10-K, 10-Q and 8-K. Because the documents differ, RockTurners withholds a verdict for a filer with no 10-K or 10-Q rather than reading its forms as domestic ones.
- Delisting and deregistration (Forms 25 and 15)
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Form 25 is filed to remove a class of securities from listing on a national exchange, by the exchange or by the company. Form 15 is filed to end or suspend a company’s SEC reporting obligations. Together they mark a company leaving the public markets or the reporting system, after which its ongoing filings stop.
- XBRL and company facts
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XBRL is the tagging language that makes the numbers in a filing machine-readable: each figure carries a standard tag, such as us-gaap:Revenues, plus its period and units. The SEC publishes every company’s tagged figures as company facts through free public APIs. Financial metrics in a quantitative screen are computed from this data, so each value traces to a specific filing.
Insider transactions and ownership
The forms that report what officers, directors and large holders own and trade. Each definition says what a form is, never what a transaction means for a stock.
- Insider (Section 16)
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For SEC reporting, an insider is an officer or director of a company, or a beneficial owner of more than 10% of a registered class of its equity. Section 16 of the Securities Exchange Act requires these people to report their holdings and their transactions in the company’s stock on Forms 3, 4 and 5, which are public on EDGAR.
- Form 3
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Form 3 is the initial statement of beneficial ownership. A person who becomes an officer, director or more-than-10% holder files it within ten days, listing the company’s securities they own at that point. It sets the starting position that later Form 4 and Form 5 filings change, so it is the baseline for reading any insider’s later activity.
- Form 4
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Form 4 reports a change in an insider’s holdings. It is due before the end of the second business day after the transaction, and it records the date, the number of shares, the price, a transaction code and the insider’s holdings afterward. Because it is filed quickly, Form 4 is the most current public record of what insiders have done with their shares.
- Form 5
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Form 5 is an insider’s annual statement, due within 45 days after the company’s fiscal year ends. It reports holdings and transactions that were not reported earlier on Form 3 or Form 4, chiefly small or exempt transactions eligible for deferred reporting. An insider with nothing to report for the year files no Form 5 at all.
- Form 4 transaction codes
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Every Form 4 transaction carries a one-letter code that says what kind of event it was. Common codes: P for an open-market or private purchase, S for an open-market or private sale, A for a grant or award, M for an option exercise, F for shares withheld to pay tax, and G for a gift. The code separates discretionary trades from compensation mechanics.
- Open-market purchase
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An open-market purchase is an insider acquiring shares with their own money, reported on Form 4 under transaction code P. It is distinct from shares received as pay (code A), shares from an option exercise (code M) and shares withheld for tax (code F). Filing-based research reads these separately, because only some of them reflect a choice to put capital in.
- Rule 10b5-1 trading plan
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A Rule 10b5-1 plan is a written plan, adopted in advance, that fixes the amount, price and timing of an insider’s future trades, or a formula for them. It is an affirmative defense to insider-trading liability, not an exemption, and since 2023 it requires a cooling-off period before the first trade. Trades under a plan are prearranged rather than chosen on the day.
- Beneficial ownership
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A person beneficially owns a security when they have or share the power to vote it or to dispose of it, directly or indirectly, whether or not they are the holder of record. Shares a person can acquire within 60 days count too. This test sets the 5% threshold for Schedules 13D and 13G and the ownership table in the proxy.
- Schedule 13D
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Schedule 13D is the report filed by anyone who acquires beneficial ownership of more than 5% of a class of a company’s registered voting equity and may seek to influence or control it. Since 2024 it is due within five business days. It states who the holder is, how the stake was funded, and the stated purpose of the investment.
- Schedule 13G
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Schedule 13G is the short-form alternative to Schedule 13D, available to holders of more than 5% who do not seek to influence control: qualified institutions such as banks and registered funds acquiring in the ordinary course, and passive investors below 20%. It discloses the size of the stake but not a plan for the company, because the filer certifies it has none.
- Form 144
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Form 144 is the notice an affiliate of a company files before a proposed sale of restricted or control securities under Rule 144, the resale safe harbor. It is required when the sales planned in any three-month period exceed 5,000 shares or $50,000. It records a proposed sale, not a completed one; an insider’s completed sale is reported later on Form 4.
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A share repurchase, or buyback, is a company acquiring its own stock, which reduces the number of shares outstanding. Companies disclose repurchases quarterly in their 10-Q and 10-K, with monthly detail on shares acquired and the average price paid. Read beside dilution from stock compensation, it shows whether the share count is actually shrinking.
Financial metrics
The measures a quantitative screen computes from reported financial data. Definitions are the standard ones, with any RockTurners simplification stated.
- Trailing twelve months (TTM)
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Trailing twelve months is a company’s results over the latest four quarters, built from the last annual report plus the year-to-date figures since it, minus the same period a year earlier. It shows a full year that ends at the most recent quarter rather than at fiscal year-end, so revenue, earnings and cash-flow metrics stay current between annual reports.
- Most recent quarter (MRQ)
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Most recent quarter is the balance-sheet basis: debt, cash, equity, share count and current assets as of the latest quarter-end reported in a 10-Q or 10-K. Balance-sheet items are snapshots on a single date, so the latest one is used directly. Ratios that combine both bases, like debt to EBITDA, pair MRQ balances with TTM flows.
- Market capitalization
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Market capitalization is the market value of a company’s common equity: shares outstanding multiplied by the share price. It sizes a company by what the market currently prices its equity at, not by revenue or assets. RockTurners uses the prior trading day’s official close, so the figure is fixed for the day rather than moving with intraday trading.
- Enterprise value (EV)
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Enterprise value approximates what the whole business is worth to all capital providers: market capitalization plus total debt minus cash. Unlike market cap alone, it accounts for borrowings, so two companies with the same equity value but different debt loads compare fairly. RockTurners uses this simplified form, without adjustments for preferred stock or minority interests.
- Earnings yield (EBIT/EV)
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Earnings yield, as quality-value ranks use it, is operating income (EBIT) divided by enterprise value. It measures how much operating profit the whole business produces per dollar of what it is valued at, debt included. Using EBIT and EV rather than net income and price compares companies fairly across different tax rates and debt loads.
- Price-to-earnings ratio (P/E)
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The price-to-earnings ratio is the share price divided by earnings per share, usually trailing twelve months. It expresses how many dollars the market pays for each dollar of a company’s annual earnings. Because it ignores debt and is distorted by one-time gains or charges, it is read alongside enterprise-value measures and the quality of the earnings.
- EV/EBITDA
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EV/EBITDA is enterprise value divided by earnings before interest, taxes, depreciation and amortization. It values the whole business against a cash-oriented measure of operating profit, which makes companies with different debt loads and depreciation policies easier to compare. EBITDA excludes capital spending, so a capital-heavy business can look cheaper on this measure than its cash flow supports.
- Return on invested capital (ROIC)
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Return on invested capital measures how much after-tax operating profit a company earns on the capital invested in it by shareholders and lenders. Persistently high ROIC is the usual quantitative signature of a durable competitive position. RockTurners marks it not meaningful, rather than unusually high, when equity is negative or the capital base is tiny relative to total assets.
- Return on equity (ROE)
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Return on equity is net income divided by shareholders’ equity: the profit earned per dollar of the owners’ capital. Debt can raise ROE without any improvement in the business, and buybacks that shrink equity can push it very high, so it is read beside leverage and ROIC. When equity is negative, the ratio is not meaningful and is reported as such.
- Return on capital (ROC)
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Return on capital, in the form published quality-value rank methods use, is operating income (EBIT) divided by net working capital plus net fixed assets. It measures the operating profit generated by the tangible capital a business actually needs to run, ignoring goodwill and excess cash. Paired with earnings yield, it combines a measure of quality with a measure of price.
- Free cash flow (FCF)
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Free cash flow is cash from operations minus capital expenditures: the cash a business generates after maintaining and expanding its productive assets. It is harder to flatter with accounting choices than net income, which is why free cash flow compared with net income is a common check on earnings quality, and why dividend coverage is often tested against it.
- Gross margin
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Gross margin is revenue minus the cost of goods sold, as a percentage of revenue. It shows how much of each sales dollar remains after the direct cost of producing what was sold. A gross margin that holds steady through rising input costs is one quantitative footprint of pricing power; a falling one can show competitive pressure.
- Operating margin
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Operating margin is operating income divided by revenue: the share of each sales dollar left after both production costs and operating expenses such as selling, research and administration. It reflects the profitability of the core business before interest and taxes. Its trend across several years says more than any single year’s figure.
- Net current asset value (NCAV, net-net)
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Net current asset value is current assets minus total liabilities: a deliberately conservative estimate of what would be left for shareholders if only liquid assets counted. A company trading below its NCAV is called a net-net. RockTurners computes it without subtracting preferred stock, which overstates NCAV slightly for the few companies that have preferred shares outstanding.
- Net debt to EBITDA
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Net debt to EBITDA is total debt minus cash, divided by trailing EBITDA. It estimates how many years of operating cash earnings it would take to repay the debt, and it is a standard measure of leverage in credit analysis. RockTurners publishes it on borrowings plus finance leases and, separately, with operating leases added.
- Interest coverage
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Interest coverage is operating income (EBIT) divided by interest expense: how many times over the company’s operating profit covers what it owes in interest. A ratio near one leaves little room for a weak year. It complements debt-level measures, because two companies with the same debt can face very different interest costs.
- Debt to equity
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Debt to equity is total debt divided by shareholders’ equity, measured at the most recent quarter. RockTurners counts borrowings plus finance leases as debt, the GAAP definition, and also publishes a lease-adjusted version that adds operating-lease liabilities, the definition many data vendors and rating agencies use. Negative equity makes the ratio not meaningful.
- Payout ratio
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The payout ratio is the share of earnings, or of free cash flow, paid out as dividends. A ratio measured against free cash flow shows whether the dividend is funded by the cash the business actually generates. Above 100%, the company is paying out more than it produces, and the gap is coming from the balance sheet.
- Dividend growth streak
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A dividend growth streak is the number of consecutive years a company has raised its dividend per share. Published dividend research groups companies into tiers by streak length. A streak records past decisions only; whether it can continue depends on coverage by earnings and free cash flow and on the balance sheet behind it.
- Piotroski F-Score
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The Piotroski F-Score is a 0–9 score built from nine yes-or-no tests on profitability, leverage and liquidity, and operating efficiency, each comparing the latest fiscal year with the one before. It was published in 2000 as a way to separate financially improving companies from deteriorating ones among low price-to-book stocks. It is not computed for financial companies.
- Altman Z-Score
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The Altman Z-Score combines several balance-sheet and income-statement ratios into a single number estimating financial distress. RockTurners uses the Z″ variant, designed for non-manufacturers and companies outside the original manufacturing sample. Lower values place a company nearer the distress zone. It describes reported financial condition and is not computed for banks and other financial companies.
- Beneish M-Score
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The Beneish M-Score is a model that combines eight ratios, such as changes in receivables, margins and accruals, into a score indicating whether reported earnings show patterns associated with manipulation. A higher score means more of those patterns. It flags financial statements for a closer read; it does not establish that any manipulation occurred.
- Earnings quality
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Earnings quality describes how well reported net income reflects cash the business actually generates and can repeat. No single metric captures it. Common quantitative checks include free cash flow compared with net income, stock-based compensation as a share of revenue, accrual-based scores such as the Beneish M-Score, and whether the auditor raised a going-concern doubt.
- Non-GAAP measure
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A non-GAAP measure is a figure a company presents that departs from generally accepted accounting principles, such as adjusted earnings or adjusted EBITDA, typically excluding items management considers unusual. SEC Regulation G requires the company to show the closest GAAP measure and reconcile the two. Comparing the reconciliation over several years shows which exclusions recur.
- Going-concern doubt
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A going-concern doubt arises when there is substantial doubt that a company can keep operating for the year after its financial statements are issued. Management must evaluate the question, and the independent auditor must say so in its report when the doubt exists. RockTurners reads the auditor’s report in the latest 10-K, not management’s own risk-factor language.
- Relative strength
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Relative strength ranks a stock’s price performance against every other stock in the universe over the same period, commonly three, six and twelve months, and expresses it as a percentile. It describes how the price has moved relative to peers. Academic research on momentum studies whether that ranking persists; the measure itself says nothing about the business.
How RockTurners reads a company
The vocabulary of the two-stage read: what a framework is, what a verdict measures, and how gaps in the filings are handled.
- Framework
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A framework is a fixed investing discipline expressed in two stages: a quantitative screen that narrows the universe of companies, and an evaluation rubric the AI applies to the survivors’ filings. Each built-in framework is in the tradition of published investing research and is grouped under a lens. The same framework is applied identically to every company it reads.
- Lens
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A lens is a family of frameworks that ask related questions about a company. RockTurners groups its built-in frameworks under value, growth, quality and income lenses: value frameworks ask whether a business is worth clearly more than it trades for, while income frameworks ask whether a dividend record is supported by what the company currently earns.
- Stage 1 (pre-screen)
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Stage 1 is the quantitative pass. It tests every company in the universe against a framework’s fixed criteria, using metrics computed from SEC financial data at the time of the scan, and records every result, pass or fail. No AI is involved. When a metric is missing for a company, the test is generally skipped and the gap is recorded rather than counted as a failure.
- Stage 2 (filing read)
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Stage 2 is the AI read of the companies that pass Stage 1. The model receives the specific filing sections the framework declares, such as 10-K risk factors, MD&A or the proxy statement, and scores each rubric dimension from that evidence alone. Every claim must cite a provided section, and anything the filings do not disclose is marked unknown.
- Verdict
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A verdict is the outcome of a Stage 2 read: a statement of framework fit, meaning how well a company’s filings satisfied one framework’s criteria, as of the filings read. The same company can be a strong match to one framework and no match to another, and both readings are correct. A verdict is never a prediction and never an action to take.
- Gemstone, Geode and Sediment
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These are the three verdicts. Gemstone means a strong match: the filings support the framework’s criteria. Geode means a partial match: some criteria hold while others are mixed or cannot be verified from the filings. Sediment means no match: the criteria are not met. All three describe framework fit, not the merits of the stock.
- Scored dimension
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A scored dimension is one axis of a framework’s rubric, such as pricing power, capital allocation or dividend coverage. Each is scored from the filing evidence, and each has its own minimum, so a high total cannot carry a company past a dimension it fails. The scores and the evidence behind them appear with the verdict.
- Citation
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A citation ties a claim in a verdict to the specific filing section it came from, shown as form, section and date, such as a 10-K’s Item 7 for a given fiscal year. Citations are checked against the sections that were actually provided to the model, and a claim citing anything else is flagged as unverifiable, which can lower the verdict.
- Unknown (honest gap)
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An unknown is a criterion the filings do not address. It is marked unknown rather than inferred or filled in from the model’s general knowledge, and it is listed with the verdict so the reader can see exactly what could not be verified. Enough unknowns cap a verdict, so a company cannot reach a strong match on missing evidence.
- Red flag
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A red flag is a specific disclosed problem that a framework treats as disqualifying or as a reason for caution, such as an auditor’s going-concern doubt, a warning not to rely on prior financial statements, or significant related-party dealings. Each red flag in a verdict names the filing evidence behind it. A confirmed disqualifying flag sets the verdict to Sediment.
- Withheld verdict (Not scored)
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A verdict is withheld, and the company is shown as Not scored, when the available filings cannot support any verdict: the primary documents could not be read, the company files foreign-issuer forms, or the model found the evidence insufficient. Withholding is deliberate. A forced verdict on missing evidence would look confident without being grounded, so none is issued.
Frameworks
The terms above are the vocabulary of the built-in frameworks. Each lens page describes what its frameworks look for at Stage 1 and what they read for at Stage 2, and each framework has its own explainer of the filings it reads. The how it works page walks through a full read, and the anatomy of a verdict shows one annotated.
All terms A to Z
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F
R
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Definitions are general explanations of public filings and standard financial measures, written for reference. They describe what a form or metric is, not what any figure means for a particular security. Metrics named after the researchers who published them are named for attribution only; no methodology on this page is endorsed by or affiliated with them.