Chapter 5- Polls and Surveys
Polls and surveys offer public opinion. Though they sometimes may be skewed, it is up to the reporter’s jobs to understand how to read polls/surveys and interpret their validity. Polls are an estimate of public opinion on a single topic or question. They’re most frequently used in political circles and are representative of different samples of the population. An important aspect to consider when evaluating polls is random selection. Researchers rely heavily on samples to generate a picture of the population.
Some of the formulas used for sampling are:
- Cluster sampling
- Multistage sampling
- Quota sampling
- Probability sampling
Margin of error indicates the degree of accuracy of the research based on standard norms. This is expressed as a percentage and is based on the size of a randomly selected sample. Confidence level is the level or percentage of which researchers have confidence in the results of their research. The formal definition is the probability of obtaining a given result by chance.The confidence level should always be reported in stories because it gives readers a chance to assess the results for themselves.
The U.S. Census surveyed every household in the United States. It releases adjusted and unadjusted numbers for every level. Journalists should also have basic knowledge of z and t scores since they’re often used in reporting the results of studies.
Example: Researchers are looking to do a cluster sample in Raleigh about what residents think about the HB2 law. Explain how this sample will take place.
The people doing the poll will choose a zip code, 27616, for example. This will give them a cluster sample for the city.
Chapter 6- Business
Due to the many sources of business news that exist, it is importnt to understand and analyze business reports. Financial statements are formal documents available to shareholders, regulatory agencies, and other stakeholders interested in a company’s performance. The profit and loss statement shows whether a company is making money or not. Though different methods exist when determining profit and loss, every business calculates profit by subtracting expenses from income. It is important to note how a company is doing before certain expenses.
It is important to note how a company is doing before certain expenses. The earnings before interest, taxes, depreciation and amortization (EBITDA) is a useful figure to compare companies. It shows how much cash a company is earning without regard to items unrelated to current business.
A balance sheet is a written financial statement of a company’s assets, liabilities, and equity. It basically shows the stability of a company. The common denominator of all balance sheets is that the assets side of the balance sheet always equals the liabilities and equity side.
Assets = Liabilities + Equity
Ratios are calculations that are used by analysts and business owners to evaluate a company’s cash situation, profitability, operating efficiency, and market value. They tend to be used to compare a company against others of the same field. It is important to remember that ratios are only indicators of a company’s strengths or weaknesses. A current ratio is a liquidity ratio that measures the ability of a company to meet its liabilities.
Current ratio = current assets / current liabilities
Quick ratio is a liquidity ratio that measures the ability of a company to meet its current liabilities with cash on hand. Debt-to-asset ratio is similar to the current ratio except it includes all assets and all liabilities. This is a better indicator of the long-term health of a company than a current ratio. The dept-to equity ratio tells us how deeply a company is leveraged by comparing what is owed to what is owned.
Return on total assets is a profitability ratio that measures the return on the investment on all assets. Return on equity is a profitability ratio that measures the return on the investment made in equity. Price-earnings ratio is a value ratio that measures the return on the investment based on stock price.
Example: Sarah designs her own dresses and begins selling them. The cost of making a dress is $150 and she sells them for $275. What is the gross margin?
$275 – $150 =$125
Chapter 7- Stocks and Bonds
Understanding the basic numbers behind stocks and bonds is important for a journalist. Stocks are sold by corporations to raise cash and people buy stocks as investments. Once an individual buys a share of stock in a company, they become a part owner of the company. The more people who want to buy a stock, the higher the price goes. Corporations and governments raise money by selling bonds. A bond is a loan from an investor to their government or other organization selling the bond. Bonds earn interest at a set rate and tend to be low-risk investments.
Journalists may be more interested in calculating the actual cost of a bond issued by a municipality. Stock indexes track the prices of certain groups of stocks, giving investors a snapshot of overall market conditions without having to examine dozens of individual stock prices. The Dow Jones Industrial Average and the NASDAQ are two popular indexes. the Dow Jones Industrial Average is the total value of one share
The Dow Jones Industrial Average and the NASDAQ are two popular indexes. the Dow Jones Industrial Average is the total value of one share each of 30 select stocks divided by a figure called the divisor. The divisor takes into account dividends, splits, spinoffs, and other applicable corporate actions.
NASDAQ is an automated quotation system that reports on trading of domestic stocks and bonds not listed on the regular stock markets.
Jack paid $600 for a $2,000 bond with a 7 percent interest rate. What is his current yield?
Current yield = (7% x $2,000) / $600 = 23.3 %
Chapter 8- Property Taxes
According to Wickham, property taxes are the largest single source of income for local governments, school districts, and other municipal organizations. Understanding how the taxes are calculated is important for journalists since a lot of articles on these type of taxes make the front page. The property tax rate is determined by taking the total amount of money the governing body needs, and dividing that amount the property owners in that taxing district. It is important to note that property taxes are applied to assessed evaluations, not to the actual price a home would sell for on the open market.
A major issue that is to be considered when writing about property tax is the reappraisal. A reappraisal updates real property values to reflect current market value of all taxable properties within a taxing district. Property is often taxed by more than one governing body. It is important to consider the possibility that the percentage used to calculate the assessed value might differ based on the type of property. In order to prevent local governments from playing games with the tax rate, many state laws provide for adjusting the tax rate to prevent local governments from benefiting from significant extra funds in reappraisal years at the expense of the taxpayers.
Appraisal value is based on the property’s use, the property’s characteristics, current market conditions as determined by sales in the immediate area over a specific number of years, and a visual inspection of the property by trained appraisers. The mill levy is applied to assessed valuations.
Assessed value = Appraisal value x rate
Example: Raleigh assesses residential property at 15 percent of the appraisal rate. If one townhouse is appraised at $200,000 what is the assessed value?
$200,000 x .15 = $30,000