MD&A

DEFINITION

Management's Discussion and Analysis (Item 7 in a 10-K, Item 2 of Part I in a 10-Q) is the section where management walks through the financial statements in plain English — explaining revenue drivers, margin changes, segment performance, cash flow, capital allocation, known trends, and material uncertainties. SEC rules require MD&A to identify trends or events that are reasonably likely to have a material impact on future results.

WHY IT MATTERS FOR RETAIL INVESTORS

If you only read two parts of a 10-K, read Risk Factors and MD&A. MD&A is where you learn what management thinks is going on — and the difference between this year's MD&A and last year's reveals what shifted. Pay attention to new line items added to MD&A; companies usually start describing something only when it has become material enough to require disclosure.

RELATED TERMS

• 10-K
• 10-Q
• Risk Factors
• Forward-Looking Statements