15 Red Flags When Editing Business Stories

Liabilities that can bite you in the assets

Business editing can be tricky. We’ll cover 15 of the most common problems you’ll encounter – or that you’ll cause – when you’re faced with business copy and talk about how to avoid them.

But, hey … don’t think of them as problems. Think of them as part of life’s rich editing pageant.

• Nobody has a

on perfection.

Monopoly images © Hasbro. Used by permission.

Quiz Question #1:

What’s (probably) wrong about this statement?

The proposed purchase severely undervalues the company, said an analyst for Waddell & Reed New Concepts, a mutual fund that has $1.24 million under management.

• Million or billion?– In Sunday's Business section,

Blockbuster Inc.'s debt was labeled incorrectly in a chart. The amounts were in millions, not billions. The company's long-term debt totaled $855.9 million at the end of 2009.

– An item on Friday’s Business cover misstated Apple’s cash reserve. It is $25 billion, not million.

– A story in Thursday’s Business section incorrectly reported Blockbuster Inc.’s debt level. The company’s debt was $963.6 million, not billion.

Quiz Question #2:

How many homes were sold a year ago?

Sales of pre-owned homes dropped 11 percent in January from a year ago, the eighth month in a row of year-over-year declines. Real estate agents sold only 3,073 pre-owned single-family homes in the month.

• Know the math; do the math.• Make sure percentage

increases or decreases are based on what’s being changed from, not what’s being changed to.

• If you’re one of those editors who pride themselves on ignorance of math …

• Shame on you!

Quiz Question #3:

What’s wrong here?

For one year only, the payroll tax taken out of your check for Social Security will be reduced by 2 percent. You’ll see 4.2 percent – instead of 6.2 percent – of the first $106,800 of earnings going to Social Security. That will put an extra $2,136 in the paychecks of the highest earners.

Quiz Question #4:

What’s wrong here?

The almost nine out of 10 people who still pay their home loans on time don’t get a lot of attention these days.

Understandably, it’s the 8.9 percent of Americans with a loan who are behind on their payments who are giving the mortgage business fits.

• Don’t confuse changes in percent with changes in percentage points.

• A change from 2 percent to 3 percent is a change of 1 percentage point, but …

• It’s an increase of 50 percent:– 2 percent of $100 is $2. – 3 percent is $3.– $3 - $2 = $1– $1 / $2 = 0.5, or 50 percent

• Are you talking about an index? – Consumer Price Index– Consumer sentiment index– Stock indexes

• Then you’re probably not talking about percents (or dollars), but points.

• Watch out for this especially in graphics. Artists love to stick in random percent signs.

Quiz Question #5:

Which of these company names is/are correct?

a. General Motors Corp.b. Toyota Motors Corp.c. Campbell’s Soup Co.d. None of the theme. All of them

• Get them right!• What you think you know

can hurt you.

• Get agency names right, too.– Consumer Products Safety Commission?– Securities Exchange Commission??– Commodities Futures Trading Commission???

• No, dammit!• When in doubt, look it up. • If you’re sure you know it, look it up anyway.

• Don’t confuse revenue with net income (earnings).– Revenue: the amount of

money a company receives or will receive for the sale of its goods and services, by renting goods or property, and through investment

– Earnings (profit, net income): revenue minus expenses

From The Financial Writer’s Stylebook by Chris Roush and Bill Cloud

Quiz Question #6:

What’s missing here?

Apple reported a profit of $6 billion, or $6.43 a share, increasing from $3.38 billion, or $3.67 a share. Revenue surged to $26.74 billion, up from $15.68 billion. More than a third percent of the revenue came from the U.S.

• Economic reports should specify whether you’re talking about year-over-year changes or month-to-month changes. Year-over-year usually gives a more accurate picture.

Photo by Flickr user SeanWF

• Stories need to spell out the parameters.– Auto sales: An annualized rate

of 13 million cars in June is different from selling 13 million cars in June (wow!). How many cars were sold in June, anyway?

– Home sales, retail sales, etc.– Job numbers, GDP

• The yearly rate of domestic sales in April – 11.4 million – is expected to be less than the 11.8 million seasonally adjusted annualized pace in March.

• Interesting (perhaps) note: The story I cribbed this from never actually said how many vehicles were sold. The April figure is a projection, but we do know the March number … well, somebody does.

• Home sales: new or “pre-owned”? – Remember that sales of pre-owned

homes far outnumber sales of new homes.

– Small sales volume can make percentage changes look more significant than they are.

• Change in sales volume or home prices? It’s easier to confuse them than you think.

• A front-page headline Wednesday said that sales of pre-owned homes fell in January. The decline was in U.S. prices, not overall sales.

Photo by Flickr user pixelnaiad

Quiz Question #7:

What’s wrong here?

Area home foreclosures for March are down 9 percent from a year ago. With the March filings, more than 16,000 home foreclosure postings have been recorded for the first quarter of 2011, about the same as last year.

• Danger, Will Robinson! Foreclosure postings are not foreclosures. – Many postings are worked

out with lenders without a sale taking place.

– Some properties are posted repeatedly before the situation is resolved.

• You may want to develop some boilerplate, like this:

• Usually about 40 percent or fewer of homes posted for foreclosure each month are actually sold by lenders. In most cases, the foreclosure auction is delayed or the borrower reaches a new agreement with the mortgage holder.

Quiz Question #8:What’s wrong here?

CVS buys Universal American unit$1.25 billion deal will help pharmacy chain double its Medicare drug business

Woonsocket, R.I. – CVS Caremark Corp. said Friday it will pay $1.25 billion to buy Universal American Corp.’s Medicare prescription drug services unit.

CVS said it pursued the deal because as the nation’s population ages, a growing percentage of Americans will get their prescription drug coverage from Medicare.

Universal American said shareholders would get $12.80 to $13 a share in cash and would own a new company operating Universal American’s other businesses.

• Don’t say something has happened when it’s only in the works.

• Particular dangers: mergers and acquisitions, executive changes. – Danger 1: Widgets R Us says it’s buying United

Confabulators. The sale is expected to close two quarters from now after regulatory approval. Widgets has NOT bought Confabulators yet!

– Danger 2: Widgets has offered $25 a share for UC. It has NOT bought the company. Another bidder could show up and take the pot.

• Know your executives. It’s easy to confuse CEO, CFO, COO, especially in headlines.– Hey, don’t you just love that one …

COO?• Know who’s in charge NOW.

Don’t trust information from file photos or archived stories.

• Know your style on names: Ed Whitacre? Ed Whitacre Jr.? Edward E. Whitacre Jr.?

Quiz Question #9:Something’s wrong with this picture.

• Graphics are tricky. – Do the numbers in the

source info match the numbers in the graphic?

– Are arrows pointing the right way? Are they the appropriate color?

– Is a bar chart the right presentation, or should you use a fever line, or maybe a pie chart?

Quiz Question #10:

How would you rewrite this? Or would you?

For the airport’s part, spokesman David Magaña said it will study all of its parking products in coming months to determine whether changes need to be made.

• Keep your ears open for jargon.– Product: Parking is not a

product. A checking account is not a product.

– Concept: A restaurant chain is not a concept; it’s a chain.

– Winding down: GM did not “wind down” Pontiac; it discontinued the brand. The administration is not going to “wind down” Fannie and Freddie. (Heaven knows what it’s going to do.)

• Don’t convict someone in copy who hasn’t been found guilty in court.– Allen Stanford is not “mega-swindler

Allen Stanford.” Not legally, anyway, just yet.

– Bernie Madoff … well, fair game.• You’re not arrested “for fraud.”

You’re arrested on suspicion of fraud, or you’re charged with fraud.

• At least I hope it wasn’t you.

• Watch out for PR masquerading as reporting.

• Laudatory adjectives and unsourced claims of superiority are giveaways.

• Most frequent offenders:– Inane quotes from company

executives– Quotes from sources who have

an interest in the company – if they do, at least say so.

Bonus Screw-up:

Wal-Mart dividend to go up 21 percentWal-Mart Stores Inc. said Thursday that it is increasing its annual

dividend to 21 percent on the back of strong earnings.The world’s largest retailer last month reported a 27 percent increase in

fourth-quarter net incomes as it benefited from cost-cutting and strong sales overseas.

Wal-Mart said it will pay an annual dividend this year of $1.46, up from $1.21. It will pay quarterly dividends of 36.5 cents in April, June, September and January in fiscal 2012, which ends Jan. 31.

The next dividend will be paid on April 4 to shareholders of record on March 11.

•Got it.•Good!