what is covered in md a 
the md a section often includes an overview and outlook section this part of the financial statement is used to explain what the future of the organization looks like it is also management s opportunity to explain why variances both positive or negative occurred and what they expect from the market next management also typically discusses liquidity solvency and capital resources management must identify trends demands or long term commitments that may strain capital this section also usually contains information about management s future plans for material major capital expenditures management uses this section to explain the results of operations management can explain unusual events material transactions or significant economic changes the company often uses this opportunity to explain why net revenues and expenses varied from expected or budgeted financial plans the company may also use this section to explain its successes such as how a specific product outperformed during its new launch or how new markets have beat expectations last this section is often used to shine light on management s estimates used for accounting practices some accounting rules require professional judgement management can explain why they valued capital assets inventory or other assets as a certain amount it can also explain how it arrived at estimates for other balance sheet or income statement amounts such as an allowance for bad debt and resulting bad debt expense the md a section is usually buried in the notes to the financial statements these notes are located after the financial statements limitations of md athe md a section of a 10 k primarily uses words to explain a financial position instead of numbers therefore management can use soft or hard language to manipulate how financial performance has been going or is expected to occur whereas financial reporting via generally accepted accounting principles gaap have strict rules a company can choose how to represent itself using the md a section 