Business & Company Research Guide

Company Financials

Why Lawyers Want Company Financials

  1. Case Preparation: Financial statements provide crucial evidence in legal cases, helping lawyers understand the financial health and operations of a company.
  2. Due Diligence: In mergers and acquisitions, lawyers need to review financials to assess the value and risks associated with a transaction.
  3. Compliance and Regulatory Issues: Lawyers ensure that companies comply with financial regulations and standards, which requires a thorough understanding of their financials.
  4. Litigation Support: Financial data can be used to support claims or defenses in court, such as in cases of fraud, bankruptcy, or shareholder disputes.

Information Needed from Company Financials

  1. Income Statements: To analyze a company's profitability over a specific period.
  2. Balance Sheets: To understand the company's assets, liabilities, and equity at a given point in time.
  3. Cash Flow Statements: To track the flow of cash in and out of the company, which is crucial for assessing liquidity and financial stability.
  4. Notes to Financial Statements: These provide additional context and details about the financial data, including accounting policies and potential liabilities.

How Lawyers Find Company Financials

  1. Public Filings: For publicly traded companies, financial statements are often available through regulatory bodies like the SEC's EDGAR database.
  2. Company Websites: Many companies publish their financial reports in the investor relations section of their websites.

You can run a basic Web search for the company name and Investor Relations:

Google Web Search
  1. Financial Databases: Platforms like S&P CapitalIQ, D&B Hoovers and FactSet provide comprehensive financial data and reports. These subscription databases are not available at UC Law SF, however, we do have access to Bloomberg Law, which provides some company financials in their Company Profiles. We also have access to Reuters Knowledge Direct, in Lexis, which provides detailed financial statements about the company.

You can get a lot of financial information for free from these websites:

  1. SEC filings that provide information on company financials:
    • Form 10-K: This is an annual report that provides a comprehensive overview of a company's business and financial condition, including audited financial statements.
    • Form 10-Q: This is a quarterly report that includes unaudited financial statements and provides a continuing view of the company's financial position during the year.
    • Form 8-K: This form is used to report significant events that shareholders should know about, such as acquisitions, bankruptcy, or changes in executive management. It often includes financial information related to these events.
    • Proxy Statements (Form DEF 14A): These are filed in advance of shareholder meetings and can include financial information, especially regarding executive compensation and other significant financial matters.
    • Form S-1: This is used for initial public offerings (IPOs) and includes detailed financial information about the company seeking to go public.
    • Form S-3: This form is used for secondary offerings and also includes financial statements and other relevant financial data.

SFPL Databases

The main difference between these two databases seems to be formatting. The family tree portal on Intellect seems to be less accurate, because it refers to individual stores as members of the family tree, whereas Mergent Online gives you the corporate family tree. However, for private companies, Mergent Intellect provides a family tree, whereas Mergent Online likely will not. 

The information about executive compensation is clearer, more comprehensive and possibly more up to date on Mergent Intellect. For executives of public companies, in Mergent Intellect, you can easily see and compare the base salary as well as the bonuses and stock awards from the previous year. Mergent Online's data is generally older and more difficult to review. There seem to be many more individual employees listed in Mergent Intellect versus Mergent Online. The main benefit of Mergent Online is that it provides more options for predefined reports on the companies with the caveat that some of the data in the reports may be older than the report that you can pull from Mergent Intellect.