EDGAR

Definition

EDGAR, which stands for the Electronic Data Gathering, Analysis, and Retrieval system, is a platform used by the U.S. Securities and Exchange Commission (SEC) to facilitate the electronic submission of financial documents by publicly traded companies. This system plays a crucial role in making corporate information readily accessible to investors and the general public, enhancing transparency in the financial markets.

5 Must Know Facts For Your Next Test

1. EDGAR was launched in 1993 and has since become an essential tool for investors and analysts looking to access up-to-date financial information.
2. Companies are required to submit various forms to EDGAR, including quarterly reports (Form 10-Q) and annual reports (Form 10-K), ensuring regular updates on their financial status.
3. EDGAR allows for advanced search capabilities, enabling users to find specific filings or documents related to particular companies quickly.
4. The system supports greater transparency in the financial markets by allowing investors to review detailed corporate disclosures and performance metrics.
5. EDGAR's database can be accessed for free by the public, promoting informed investment decisions and accountability among publicly traded companies.

Review Questions

• How does EDGAR improve transparency in financial markets?
  • EDGAR enhances transparency by providing easy access to a wealth of corporate financial information submitted by publicly traded companies. By requiring these companies to file regular reports such as Form 10-K and Form 10-Q electronically, investors can readily review a company's financial health and operations. This level of accessibility helps ensure that all investors have equal access to important information that could influence their investment decisions.
• What are the key types of filings that companies submit through EDGAR, and why are they important?
  • Companies submit several critical filings through EDGAR, including annual reports (Form 10-K), quarterly reports (Form 10-Q), and proxy statements. These filings are important because they provide a comprehensive overview of a company’s financial performance, operational changes, and governance practices. Such disclosures enable shareholders and potential investors to assess a company's health and make informed decisions about buying or selling stocks.
• Evaluate the impact of EDGAR on the relationship between publicly traded companies and their investors.
  • EDGAR has significantly transformed the relationship between publicly traded companies and their investors by promoting a culture of transparency and accountability. Through its comprehensive database of filings, investors can perform due diligence by accessing critical information on financial performance, management practices, and risks. This shift fosters trust as investors feel more empowered with knowledge, potentially leading to more engaged shareholder participation and informed investment strategies.

Related terms

SEC: The Securities and Exchange Commission is a U.S. government agency responsible for enforcing federal securities laws and regulating the securities industry.

Form 10-K: A comprehensive annual report that publicly traded companies must file with the SEC, providing a detailed overview of the company's financial performance.

Proxy Statement: A document that companies send to shareholders to provide information on matters to be voted on at a shareholder meeting, including executive compensation and board member elections.