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The Daily Technical #73: Is EBITDA a good proxy for operating cash flow?

How to answer "What is an 8-K and when is it required to be filed?"

December 20, 2024

Good morning. Welcome to the 73rd edition of The Daily Technical. You’re here for one reason so let’s dive in.

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OVERVIEW OF YESTERDAY’S QUESTION
What is an 8-K and when is it required to be filed?

An 8-K is a necessary SEC filing when a company experiences a materially significant event. Known as the "current report," it must be filed within four days to disclose important details to shareholders.

Typical events triggering an 8-K include unannounced acquisitions, asset disposals, bankruptcies, tender offers, or a senior manager's resignation. It also includes SEC investigations. These reports ensure transparency on issues significant to stakeholders.

Common Mistakes

  1. Neglecting to mention the specific timeline within which an 8-K must be filed. It is crucial to remember that companies have four business days to submit this form following a significant event.

  2. Failing to define what qualifies as a materially significant event. Examples include mergers, asset acquisitions, bankruptcy filings, and changes in senior management.

  3. Mixing up 8-Ks with 10-Qs or 10-Ks, which cover periodic rather than event-driven disclosures. Make sure to distinguish between these documents by emphasizing that 8-Ks specifically address material events.

TL;DR

  • An 8-K (known as the “current report”) is an SEC filing for materially significant company events that must be filed within four days.

  • Triggers include acquisitions, asset disposals, bankruptcies, tender offers, senior management resignations, or SEC investigations.

  • Ensures transparency for shareholders.

TODAY’S QUESTION
Is EBITDA a good proxy for operating cash flow?

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THAT’S A WRAP
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Mike Lukasevicz
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