Q4 Blog

This past Friday SEC Chairman Christopher Cox announced the launch of the “Financial Explorer” on the SEC Web site to help investors quickly and easily analyze the financial results of public companies. Financial Explorer paints the picture of corporate financial performance with diagrams and charts, using financial information provided to the SEC as “interactive data” in eXtensible Business Reporting Language (XBRL).

Financial Explorer is easily the most impressive XBRL based application that we have seen to date. It does a great job of taking the complex explanation of XBRL and puts it into an easy to read format. Using the XBRL data from each issuer the Financial Explorer generates key financial ratios, graphs, and charts. Information including earnings, expenses, cash flows, assets, and liabilities are all displayed graphically and can easily be compared across competing public companies.

Below is an example of Microsoft’s latest filing (to date, there have been 307 such filings from 74 companies).

The software takes the work out of manipulating the data by entirely eliminating tasks such as copying and pasting rows of revenues and expenses into a spreadsheet. That frees investors to focus on their investments’ financial results through visual representations that make the numbers easier to understand.

Aloca’s Income statement can be found here. Note the small chart icon that represents year over year results, a nice touch that significantly improves the readability of the statement.

“XBRL is fast becoming the universal language for the exchange of business information and it is the future of financial reporting,” said Chairman Cox. “With Financial Explorer or another XBRL viewer, investors will be able to quickly make sense of financial statements. In the near future, potentially millions of people will be able to analyze and compare financial statements and make better-informed investment decisions. That’s a big benefit to ordinary investors.”

Financial Explorer is open source, meaning the code that runs it is free to the public. As interactive data becomes broadly accepted there will be many more applications like Financial Explorer that will help investors and issuers communicate more efficiently and more effectively than ever before.

Is your company filing in XBRL or considering it? Let us know what you think by leaving a comment below.

Technorati Tags: Q4 Web Systems, Q4, Investor Relations, IR Web Sites, Corporate Disclosure, XBRL, Interactive Data, Corporate Reporting, Financial Reporting

Although XBRL has been around for 10 years now ( the history of XBRL ), the adoption and acceptance has only begun to significantly accelerate during 2007 with the support of Christopher Cox and the SEC. As part of the recent SEC draft advisory document “ SEC Advisory on Financial Reporting” there are details on the mandating of XBRL filing (see pages 74 to 87 in the PDF). The full report can be downloaded here (3MB) Read more…

In case you’re not familiar with XBRL – it stands for eXtensible Business Reporting Language. The idea behind XBRL is simple. Instead of treating financial information as a block of text – as in a standard Internet page or a printed document – it provides an identifying tag for each individual item of data. This is computer readable. For example, company net profit has its own unique tag. Read more…