Processing Knowledge

The quality of financial research done by the KPOs and other financial researchers such as S.G. Analytics depends heavily on the quality and quantity of data on which the research is being performed. One of the most useful source of data for financial analysis is the corporate filings, which gives a detailed view of the financial health of an organization. Regulations for corporate filings have have been leveraged by government agencies such as the Securities and Exchange Commission to ease the process of mining this data. One such filing system is the Electronic Data Gathering Analysis and Retrieval (EDGAR) system. In case of the SEC, an important regulatory filing required (for listed companies) is 10-k form which is to be submitted annually.

Mining Data:

The submitted forms are freely available on the SEC website. For example, the form submitted by General Motors corp is available at the following link. As you can see, filing such forms and getting some useful data from such forms is a non-trivial tasks. Many KPOs such as S.G Analytics have currently mastered the art of not only filing such forms but also mining them for investment research. The need for number crunching has also enabled analysts to make the parsed data available for research. However, as in the case of raw data, the outcome of this research is heavily dependent on quality of the organization conducting this research.

Conclusion:

A significant drawback of the EDGAR system is that the data is highly stripped down difficult to read compared to annual reports. Many companies have their annual reports available online, however for those who do not have them, the investors have to rely on other sources of data. Thus, the process of sourcing the quality data for financial research has become a lucrative business for KPOs operating from India such as S G Analytics.