Most business stories involve numbers, and a large portion involve many, many numbers. More business writers than ever can't imagine even beginning such a story without first entering the numbers on a spreadsheet or using a database manager to look for trends. "A business writer who believes he/she is getting everything from the companies is just plain wrong," says one veteran reporter. "It's like saying that sports reporters get all they need from the teams or political reporters get all they need from politicians." It's too easy to say that no one knows the balance sheets better than management, and therefore we should let them do the analysis.
Just substitute "Congress" or "the governor" or "the mayor" for "management" in the last sentence, and the point will be clear: Management knows the financials - but that doesn't mean they tell you everything that shareholders or the public or employees need to know. Here are some ways business reporters can use computer-assisted reporting: Use the annual Home Mortgage Disclosure Act to examine whether banks give mortgages in all the neighborhoods they serve.
HMDA summarizes how lenders responded to home-loan applications by Census tract and by applicants' race, sex, income and requested loan amount. In many cases, reporters find that banks disproportionately deny loans to minorities. Search the patents database, available in part on-line or from the Patent Trademark Office, for patents in your area and get totals from the U.S. Patent Office. What sorts of patents are most common?
Quick hit: Write a spot profile of new patents in your area. Use a spreadsheet to build basic graphics that make it easier to see a company's sales/profits patterns. You can, for example, find out whether a company's newspapers or television stations make a bigger contribution to earnings. Are your airlines on time? Check out the on-time flight database from the FAA and find out which cities are the best and worst routes for your location (in terms of getting there or coming back on time), and which airlines are the best and worst in your city.
Track the health of your local banks. Take banking data (it comes out quarterly) and look at (Liabilities + Loans-on-the-Brink - those that may go bad in 90 days) / assets. The ratio is a quick way to look at the health of banks. USA Today was able to get a great jump on troubles at Chase Manhattan using this method. Use a spreadsheet to analyze tariffs. Mike Fabey did this to look at beer tariffs for the Journal of Commerce.
Use mapping software to examine bank locations. Are banks and S&Ls where most people can conveniently reach them? You may find that most banks are located in upscale office parks or high-rent neighborhoods. Buy the necessary addresses from Sheshunoff, the bank research firm. Or scour the Yellow Pages and enter the data yourself. Once you have a map, and see just how large the unserved area is, go visit it and find out how people get banking services.
You may find they depend on check-cashing "services" and rarely, if ever, can borrow money on reasonable terms. Are your businesses paying back the community? Check the SBA database for the promises businesses made about how many employees they'll add if they get a loan. Did they follow through? Writing about the Orange County bankruptcy, Ron Campbell of The Register used Excel to track the professional fees in the mammoth case - $50 million and counting.
He also used Excel to keep track of dozens of bond issues, each with its own interest rate, tax status, underwriter and financial adviser, and seemingly hundreds of recovery plans. Use data from the Bureau of the Census Web site to see how the age/race composition of your state or region will change over the next 25 years, and report on how that will affect state agencies, the economy, etc. How are your local or regional businesses doing on the Net?
Find out whether this Web thing is hype or whether people are really making money. What are their concerns? Companies usually report several years' results in their annual report or SEC Form 10-K. Put those numbers on a spreadsheet and do some charts. What sources of income have changed in the past few years? Is the company taking on more debt? What about its inventory? In many industries, inventory is a ticking time bomb.
Many companies have adopted "just-in-time inventory." The reason for this strategy is purely financial: to keep from wasting valuable capital on storage for goods you might not be able to sell at a profit. Compile figures from a number of company annual reports or 10-Ks to take a look at an industry segment, using the same sort of calculations. Use the OSHA database to determine the most common accidents and causes for your area.
Use the Internet and other on-line services to research small or obscure companies. Rob Gebelof at The Record in Hackensack, N.J., did that when it researched a company owned by a scientist who had been murdered. Little was known about the company. But by punching it into Altavista, a Net search engine, a reporter found a reference to it on a page maintained by another company. A call to that firm yielded an interview with someone who knew both the victim and his company well.
See how many workers in your area are filing for NAFTA-related benefits compared to the rest of the country. Use a spreadsheet to look at company balance sheets. Most companies do not provide information such as debt ratios, which are vital to understanding a business. Crain's New York set up a system so reporters can type in the basic numbers and get computations on key ratios. Andy Lehren of NICAR, a former Philadelphia business writer, did the same thing as a way to find publicly traded companies worth probing.
Use spreadsheets to analyze Commerce data on the fly. By using stat-USA, you can get U.S. economic data as soon as it's released by Commerce. You can quickly get that information into spreadsheets and go beyond the press releases. Business reporters can turn around quick merger stories using desktop mapping. When one company says its going to swallow another, business reporters should type company locations into a database and analyze the result with a mapping program.
Dave Herzog at The Morning Call in Allentown, Pa., did that when CoreStates announced it was taking over Meridian Bank. The paper highlighted branches within a stone's throw of each other and speculated which might be shuttered, ending up close to the mark. The St. Louis Post-Dispatch used the same technique when one grocery store chain bought another.