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Tutorial to Quickly Detect Changes in the Footnotes

August 15th, 2011

12 Comments

Written by

Jae Jun

You’ve heard and read it over and over again. Management will try to hide information in the footnotes, therefore read the footnotes, read the footnotes, read the footnotes.

But if you are a normal person you don’t like to spend all day, or don’t have the time to spend, reading every fine print in the quarterly and annual reports for each of your companies.

What if I told you there was an easier way?

3 Minutes can Save you 3 Hours

That method is to simply let Microsoft Word compare the documents for you and let you know whether there are any changes.

So simple, it’s brilliant. It’s a lesson from Financial Shenanigans that I’ve been using to make things easier.

This will undoubtedly save you tons of time. After all, you only need to read the differences between each filed report. First see what I’m talking about.

This is just one of the changes that was detected between Dolby’s Q2 and Q3 report. Try to detect this by hand and it will be a nightmare.

Now let me show you how easily this is done.

This tutorial is based on Office 2007, but it also works on word 2000 and 2003.

Step 1: Copy the Reports from SEC

  • Go search for the company filings from the SEC
  • (In my case, I’m looking at DLB and the 10-Q reports)
  • Open the latest Q3 report, select all the text and then copy it. (Press CTRL A or right click and select “select all”)

Step 2: Paste to Microsoft Word

  • Open Microsoft Word and then paste in the document. You’ll end up with a document that looks just like the filing.
  • Save the document. See the animated image below.

Step 3: Do it Again with the Previous Document

  • Now that the Q3 document has been copied, pasted and saved, do it again for the Q2 report.

Step 4: Compare Changes in Microsoft Word

  • Now with any of the documents open, select “Review” in the ribbon and then “Compare”.

  • When you select compare, a window will open.

  • In the original document, select the Q2 document, and in the revised document, select the Q3 document.
  • Deselect all the check boxes because you only want to see the word differences. You can choose to check or uncheck “Tables”.
  • Press ok. The images below will be what you see.

If you liked this tutorial please share it  by liking or tweeting it. If you have other ideas for tutorials, leave your comment below.

About Jae Jun

Jae Jun has written 530 value investing articles.

Jae is the founder of Old School Value and has a mission to empower every investor by providing tools, tutorials and educational material so that they can invest successfully on their own.

Recent posts by Jae Jun

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  • http://ValueInvestorToday.com ValueInvestorToday

    Jae, this is probably one of the single most important and useful tips I’ve seen anywhere. A tool I didn’t even know about. Was this technique shared in the book “Financial Shenanigans”? If it was, I completely overlooked it. I’ve always compared 10-K’s and 10-Q’s but have always done it long handed. Doing in that way, you naturally miss things and have to do it 3 or 4 times which takes even more time. This is going to be really beneficial. Great stuff.

  • http://cocochanel-blog.com Carolyn

    Excellent idea! Thanks for posting. I just tried it with Word 2000, which is what I have, and it works.

  • http://www.oldschoolvalue.com Jae Jun

    @ ValueInvestorToday,
    It was only a couple of lines in the book. Very easy to miss. The author didn’t specifically say you could do it on Word, but nowadays, there is always a way to do things electronically so I searched and found it quickly.

    @ Carolyn,
    Thanks for letting me know. I’ve updated the post accordingly.

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  • Tom

    Jae Jun, this is a great idea, thanks for sharing. Do you know how to save the “compared” document?

  • Tom

    Do you know how to save the compared document?

  • http://www.oldschoolvalue.com Jae Jun

    Yes. Easy as just “file -> save / save as”

  • http://www.bretsatten.com.au Bret

    This is pretty cool and I have never even thought about doing this before. Can’t wait to test this out. I came across your blog the other day and you’ve got some great articles.

  • somrh

    For those that use openoffice.org, you can go to “edit” then “Compare Document…”.

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