So you want to perform analysis to determine the profitability of a company, then produce a historic chart to show the profitability metrics over time, and then compare this analysis to the analysis of other companies in the industry. The SEC provides all this information on its website but using it is cumbersome and time-intensive. Finding accurate and easy to use financial statement data is a challenge or expensive. Well, maybe not any more… We’ve been waiting for a company to develop a reliable Financial Statement API and it seems FMP Cloud could be the answer.
Why is Financial Statement Data Important?
The information stored in financial statements is crucial to understanding almost every aspect of a company. The income statement shows investors how much profit (or loss) a company has made and where that number comes from. The balance sheet determines the value of a firm’s assets, liabilities, and shareholders’ equity, essentially showing the net worth of a company. The cash flow statement shows the inflows and outflows of cash to the company, a crucial indicator of financial health. These statements (and the retained earnings schedule, PPE schedule, and goodwill and intangible assets schedule) provide the core data to understand how well a company is functioning. Values from across all these financial statements are drawn and used to determine the profitability, liquidity, operating performance, debt, and many other key pieces of analysis. For investors and traders alike, this information is hugely important to making the best decisions.
How Do You Find Financial Statements?
As we mentioned in the introduction, you could search the company on the SEC website. After all, that is where companies officially file their statements. This process requires you to extract the information from the individual filings to build a dataset to work with. As you can imagine, this is incredibly time consuming and could lead to human error. Another option is to Google the company name + financial statements, this should lead you to the company website and the public filing. Again, this is time-consuming and requires developers to write their own script to extract the right information, or manually pull the data. Both of these methods are inefficient and we’ve long hoped for a better way.
A number of companies have entered the race to create an API that neatly extracts and stores financial statement data for your convenience. The issue with many of them is that instead of returning values in number format, they return a value in the text. Financial Modeling Prep(FMP), had a similar free Financial Statement API that returned values in this way. However, in February 2020 they released a premium Financial Statement API that returns financial statement data in number format… It is Changing the Game.
Furthermore, this financial statement API ticks all the boxes that make up a practical API. It has excellent documentation, making it easy to get started with, and the API has been designed with the end-user in mind; The APIs are remarkably simple and they perform well under high pressure. FMP Cloud’s Financial Statement API allows developers to extract the data in JSON or CVS, depending on your preference.
This API is a fantastic solution to the problem of manually pulling data from financial statements on the SEC website or having to deal with converting text values to numeric values. One last perk, the database currently has historical data to 2009 and deeper historical data is being added.
In addition to providing a state of the art API, Financial Modeling Prep is producing content to help students and finance novices understand the world of financial analysis . The education section of their site is being filled with more and more articles that teach people financial analysis is a practical way. We’ve heard a rumbling that a first-class learning platform is being built to provide novices with a learning experience like no other in the industry accurate and easy to use financial statement data. It will guide students through various financial analysis tools and enable them to practice their own portfolio whilst using real-time data. The vision is of a world where anyone can learn the fundamentals of finance and trading to be able to successfully grow their own savings.
The Lowdown
The data contained within financial statements are incredibly important to investors, traders, and anyone looking to understand the nuts and bolts of a company. Finally, there is a solution to the tedious process of manually extracting data from SEC filings, searching google, or converting text returning APIs to usable numbers. FMP Cloud provides a Financial Statement API that gives access to all SEC-registered companies’ financial statements all the way back to 2009. If you want to get a taste of the paid version you can try their free financial statement API tool or just search up a company on their website to download the CVS financial statement files. We are glad to report that there is a great financial statement API in 2020 and that is FMP Cloud.