10.1 Business and financial reporting

Business and financial reporting is a crucial aspect of journalism. It involves analyzing complex data, understanding economic indicators, and finding engaging story angles to inform readers about the financial world.

Reporters must navigate financial statements, economic trends, and diverse sources to create compelling narratives. From investigating corporate wrongdoing to explaining market shifts, this field demands both analytical skills and storytelling prowess to make financial news accessible and impactful.

Financial Statements for News

Analyzing Financial Statements

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• Financial statements include the balance sheet, income statement, statement of cash flows, and statement of shareholders' equity
  • Each statement provides unique insights into a company's financial health and performance
• Key financial ratios and metrics can be calculated from financial statements to assess liquidity, profitability, efficiency, and solvency
  • Examples include current ratio, debt-to-equity ratio, gross profit margin, and return on assets
• Significant changes or trends in financial statement line items can indicate potential news stories
  • Revenue growth, expense increases, or fluctuations in cash flow

Management Discussion and Auditor Reports

• Management's discussion and analysis (MD&A) section of financial reports provides context and explanations for financial results
  • Includes forward-looking statements and risk factors that may be newsworthy
• Auditor's reports and footnotes to the financial statements can reveal important information
  • Accounting policy changes, legal issues, or going concern doubts

Economic Data for Audiences

Understanding Economic Indicators

• Economic indicators provide insights into the overall health and direction of the economy
  • GDP, inflation rate, unemployment rate, and consumer confidence index
• Understanding the business cycle and its stages helps contextualize economic data and trends
  • Expansion, peak, contraction, and trough
• Monetary policy decisions by central banks can significantly impact financial markets and the broader economy
  • Interest rate changes or quantitative easing
• Government fiscal policies can affect economic growth, employment, and income distribution
  • Tax reforms, spending programs, and budget deficits/surpluses

Communicating Economic Data

• Translating complex economic concepts and jargon into plain language and relatable examples is crucial for engaging a general audience
  • Explaining terms like "quantitative easing" or "yield curve inversion" in simple terms
• Visualizing economic data through charts, graphs, and infographics makes complex information more accessible and understandable for readers
  • Line charts showing GDP growth over time or pie charts displaying budget allocations

Engaging Business Story Angles

Human Interest and Investigative Stories

• Human interest stories focusing on individuals or communities affected by business decisions, economic trends, or financial events create an emotional connection with readers
  • Profiling a small business owner struggling during an economic downturn
• Investigative reporting that uncovers wrongdoing, corruption, or unethical practices in the business world generates significant public interest and impact
  • Exposing a company's environmental violations or labor abuses

Trend Analysis and Broader Implications

• Trend stories that identify emerging industries, technologies, or consumer behaviors provide valuable insights and investment ideas for readers
  • Covering the rise of electric vehicles or the growth of e-commerce
• Comparative analysis of companies within the same industry or sector highlights competitive advantages, market share battles, and potential investment opportunities
  • Comparing the financial performance and strategies of major tech giants (Apple, Google, Microsoft)
• Stories that explore the broader societal, environmental, or political implications of business activities appeal to readers' values and concerns
  • Examining the impact of a corporation's supply chain on local communities or the environment

Business and Financial Sources

Building Relationships and Attending Events

• Building relationships with company executives, industry experts, and financial analysts through regular communication and face-to-face meetings leads to valuable insights and story ideas
  • Scheduling quarterly check-ins with a company's CFO or investor relations team
• Attending industry conferences, trade shows, and networking events provides opportunities to connect with potential sources and stay informed about the latest trends and developments
  • Participating in a fintech conference or a renewable energy trade show

Utilizing Public Records and Protecting Sources

• Utilizing public records, such as SEC filings, court documents, and government databases, uncovers newsworthy information and supports investigative reporting
  • Searching for insider trading disclosures or bankruptcy filings
• Maintaining confidentiality and protecting the identity of sources, when necessary, is essential for building trust and encouraging ongoing cooperation
  • Using secure communication channels and keeping detailed records of interactions
• Verifying information provided by sources through multiple, independent channels ensures accuracy and credibility in reporting
  • Corroborating a whistleblower's claims with documentary evidence or other witness accounts
• Continuously expanding and diversifying one's network of sources helps maintain a steady flow of story ideas and fresh perspectives
  • Cultivating sources across different industries, sectors, and geographic regions