LEARN THE BASICS
How to research a stock using free public filings
A practical stock research checklist: understand the business, compare financials, trace cash, check risks, and record evidence with a free worksheet.
Decide what you want to understand
Begin with one answerable question, such as why sales grew faster than operating profit. Write it down before opening a report. The aim of this first pass is a short evidence record: what happened, where the evidence is, what might explain it, and what remains unknown. A company can be interesting without the available record supporting a conclusion about its shares.
Identify the company and the reporting period
Match the issuer name and ticker, then open its filings through SEC EDGAR or the source links in Arqaris. For a U.S. domestic issuer, start with the annual 10-K and read subsequent quarterly 10-Q reports and relevant 8-K updates. Foreign issuers may use different forms. Write down the fiscal period, filing date, currency, units, and any amendment. A report downloaded today can describe a much older period.
Describe how the business earns money
Read the business description and segment notes. In your own words, identify the customer, what is sold, and what creates the main costs. Then ask which activity accounts for the largest share of the business. A fast-growing segment can attract attention while a different segment still supplies most revenue or profit. Keep a segment observation separate from a claim about the entire company.
Build a small comparison you can explain
Choose two comparable periods and record revenue, operating income, and operating cash flow. Confirm that each number covers the same time span and business scope. For positive prior revenue, growth is current revenue divided by prior revenue, minus one. Operating margin is operating income divided by revenue. Write the inputs beside each calculation so another reader can reproduce it. Neither a growth rate nor a margin determines whether a stock is attractively priced.
Investigate a difference instead of assigning a score
When profit and cash move differently, read the cash-flow reconciliation and notes. Receivables, inventory, payment timing, and noncash items may explain the gap. Management's explanation is useful evidence of its perspective, but label it as management's explanation. Make a separate note for your interpretation and the observation that would contradict it. Avoid turning an unexplained gap into a claim of fraud or business failure.
Connect risks to a follow-up question
Select a risk that matters to the business you just described. If the concern is customer concentration, look for the concentration disclosure; if it is funding, locate debt maturities and liquidity discussion. Record what the filing quantifies and what it does not. Cash on the balance sheet is a snapshot, while cash flow covers a period. Do not treat a reported cash balance as a complete answer to future funding needs.
Finish with a dated research note
Separate four things in your note: a reported fact, your arithmetic, an interpretation, and an open question. Include the filing link and section for each important claim. End with the evidence you would check next, rather than a buy-or-sell verdict. Revisit the note when a relevant new filing appears. Arqaris's curated articles are dated publications; an interactive report may refresh independently, so check both dates before combining them.
A worked example
Imagine a manufacturer with revenue of $100 million last year and $120 million this year. Operating income moves from $15 million to $16 million, while operating cash flow falls from $14 million to $9 million. The comparison raises questions about costs and cash collection; it does not answer those questions by itself.
| Observation | Calculation or evidence | What to investigate |
|---|---|---|
| Revenue increased 20% | ($120m / $100m − 1) × 100 | Read the explanation of volume, price, and acquisitions |
| Operating profit rose about 6.7% | ($16m / $15m − 1) × 100 | Which costs grew faster than revenue? |
| Operating margin fell about 1.7 percentage points | 15% previously; $16m / $120m ≈ 13.3% now | Read cost and segment notes before assigning a cause |
| Operating cash flow fell $5m | $9m − $14m | Trace the cash-flow reconciliation and payment timing |
These hypothetical figures do not include enough detail to identify a cause or value the business. A stronger note says that margins narrowed and cash flow fell, then names the missing evidence. It does not claim that revenue growth is low quality just because cash flow declined. Banks, insurers, and other specialized businesses require measures suited to their business models.
Questions to take into a report
- Can someone reproduce my calculation from the linked filing?
- Have I separated management's explanation from my interpretation?
- What evidence would change my view, and where would I look for it?
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Primary reading and preparation
Original explanation and arithmetic prepared with automated assistance from the linked primary references. Release checks cover allowed sources, citation links, numeric consistency, and prohibited advice language. Michael Delgado is accountable for corrections. Arqaris does not claim independent human, accounting, or legal review. Check the complete source filing for context. Research and educational purposes only. Not investment advice.
Report an error or unclear explanation · Read our methodology
Keep your own research worksheet
Download the blank text template and fill it in using your preferred notes app. Record the question, source, calculation, interpretation, and next check in one place. No account is required; your completed notes stay in the copy you save.
Download the stock research worksheet (.txt) ↓
Ready to practice? Choose a published company article or search for a company report.