sec-annual-comparison

SEC Annual Comparison

Compare key metrics and risk factors between current and previous year 10-K filings for public companies using the Octagon MCP server.

Prerequisites

Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See references/mcp-setup.md for installation instructions.

Workflow

1. Identify Analysis Parameters

Determine the following before querying:

• Ticker: Stock symbol (e.g., AAPL, MSFT, GOOGL)
• Years (optional): Specific fiscal years to compare
• Focus Areas (optional): Financials, risks, segments, strategy

2. Execute Query via Octagon MCP

Use the octagon-agent tool with a natural language prompt:

Compare key metrics and risk factors between <TICKER>'s current and previous year 10-K filings.

MCP Call Format:

{
  "server": "octagon-mcp",
  "toolName": "octagon-agent",
  "arguments": {
    "prompt": "Compare key metrics and risk factors between CRM's current and previous year 10-K filings."
  }
}

3. Expected Output

The agent returns structured year-over-year comparison including:

Financial Metrics:

• Revenue: $31.353B (FY2023) vs $26.492B (FY2022) - 18.59% growth
• Net Income: $208M (FY2023) vs $1.444B (FY2022) - significant decline
• Total Assets: $98.849B vs $95.209B
• Total Liabilities: $41.755B vs $37.076B

Key Changes:

• $1.2B impairment of customer relationships and acquisition assets
• Increased goodwill from acquisitions (Slack, Acumen, Vlocity)
• Debt at $10.682B, covenant compliant

Risk Factors:

• Operational, regulatory, financial, market volatility risks
• Industry competition risks

Data Sources: octagon-financials-agent, octagon-sec-agent

4. Interpret Results

See references/interpreting-results.md for guidance on:

• Understanding year-over-year trends
• Identifying significant changes
• Evaluating risk factor evolution
• Assessing strategic shifts

Example Queries

Full Annual Comparison:

Compare key metrics and risk factors between CRM's current and previous year 10-K filings.

Multi-Year Trend:

Compare AAPL's financial performance across the last 3 fiscal years from 10-K filings.

Risk Factor Evolution:

How have TSLA's risk factors changed between FY2024 and FY2023 10-K filings?

Segment Comparison:

Compare revenue segment breakdown between GOOGL's FY2024 and FY2023 10-K filings.

Strategic Changes:

Compare the business description and strategy sections between MSFT's current and prior year 10-K.

Margin Analysis:

Compare gross margin and operating margin trends between NVDA's FY2024 and FY2023 10-K filings.

Comparison Framework

Financial Metrics

Category	Key Metrics
Revenue	Total revenue, growth rate, segment breakdown
Profitability	Gross profit, operating income, net income
Margins	Gross margin, operating margin, net margin
Balance Sheet	Assets, liabilities, equity, cash, debt
Cash Flow	Operating, investing, financing, free cash flow
Per Share	EPS, book value, dividends

Operational Metrics

Category	Key Metrics
Customers	Count, retention, concentration
Employees	Headcount, productivity
Geographic	Revenue by region, asset location
Segments	Business unit performance

Risk Factors

Category	What to Compare
Business	Competitive, operational, strategic
Financial	Liquidity, debt, currency
Regulatory	Compliance, legal
Market	Economic, industry
Technology	Innovation, disruption

Strategic Elements

Category	What to Compare
Mission	Corporate purpose
Strategy	Growth initiatives
Investments	R&D, CapEx, M&A
Markets	Geographic, product expansion

Year-over-Year Analysis

Financial Trend Assessment

Metric	Positive Trend	Negative Trend
Revenue	Growing, accelerating	Declining, slowing
Margins	Expanding	Contracting
Earnings	Increasing	Decreasing
Cash Flow	Strengthening	Weakening
Debt	Declining	Increasing

Key Ratios to Track

Ratio	Calculation	What It Shows
Revenue Growth	(Current - Prior) / Prior	Top-line momentum
Gross Margin	Gross Profit / Revenue	Pricing power, costs
Operating Margin	Operating Income / Revenue	Operational efficiency
Net Margin	Net Income / Revenue	Bottom-line profitability
ROE	Net Income / Equity	Shareholder returns
Debt/Equity	Total Debt / Equity	Financial leverage

Change Analysis

Change Type	Significance
>20% improvement	Major positive development
5-20% improvement	Solid progress
±5%	Stable/flat
5-20% decline	Concerning deterioration
>20% decline	Material negative change

Risk Factor Comparison

Types of Changes

Change	What It Means
New risk added	Emerging concern
Risk removed	Issue resolved or de-emphasized
Language expanded	Increased concern
Language reduced	Diminished concern
Position changed	Priority shift
Specificity added	Crystallizing risk

Priority Assessment

Position	Prior Year	Current Year	Interpretation
Top 5	Top 5	Top 5	Persistent priority
Lower	Lower	Top 5	Elevated concern
Top 5	Top 5	Lower	Reduced priority
None	None	Added	New risk
Present	Present	Removed	Resolved

Business Description Changes

What to Track

Section	Changes to Note
Products	New offerings, discontinued products
Markets	Geographic expansion, exits
Customers	Target market shifts
Competition	New competitors, changed positioning
Strategy	New initiatives, changed priorities
Technology	Platform changes, R&D focus

Strategic Shifts

Indicator	Examples
New emphasis	Repeated new terms
Removed emphasis	Topics no longer discussed
Changed language	Different framing
Quantification	New metrics disclosed
Commitment	Specific targets stated

Segment Performance Comparison

Revenue Analysis

Segment	Prior Year	Current Year	Growth	Mix Change
Segment A	$X	$Y	Z%	+/- pp
Segment B	$X	$Y	Z%	+/- pp

Segment Health Indicators

Indicator	Positive	Negative
Growth	Accelerating	Decelerating
Margin	Improving	Declining
Share of Total	Increasing (if healthy)	Declining
Investment	Increasing	Divesting

Multi-Year Trend Analysis

3-5 Year Comparison

Track over extended periods:

• Revenue CAGR
• Margin trajectories
• Balance sheet evolution
• Risk factor patterns
• Strategic consistency

Inflection Points

Signal	What Changed
Growth acceleration	New product, market
Margin expansion	Scale, efficiency
Cash flow improvement	Working capital, CapEx
Risk emergence	New competitive threat
Strategic pivot	Changed direction

Analysis Tips

1. Start with financials: Numbers provide objective comparison base.

2. Read both MD&As: Management commentary reveals context.

3. Track risk factor order: Position indicates priority.

4. Note new disclosures: First-time mentions often significant.

5. Compare segment detail: Business unit changes reveal strategy.

6. Check footnote changes: Accounting policy shifts matter.

Use Cases

• Investment research: Understand company trajectory
• Due diligence: Track performance evolution
• Competitive analysis: Compare across competitors
• Risk monitoring: Identify emerging concerns
• Earnings analysis: Context for quarterly results