Fourth Class Winter 2010

8/14/2019 Fourth Class Winter 2010

1/31

Writing with numbers Writing with numbers

Adding accuracy, evidence

and context with prices,ratios, forecasts andpercentages


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Number one rules onNumber one rules onnumbersnumbers

lUse numbers that convey the theme.

lAvoid numbers in first sentence

l

Make sure every number pulls thereader toward the context andthrough the story.

lUse numbers that matter

lLook past the first numbers in apress release


3/31

Getting Numbers RightGetting Numbers Right

lTime and money

lPercentage and percentage

pointslNumbers that add meaning

l

SourcinglForecasts


4/31

Key Ratios for StocksKey Ratios for Stocks

lPrice movement in context

lPrice earnings ratio

l

Dividend yieldlEarnings per share


5/31

Currencies numbersCurrencies numbers

lAll major currencies are statedagainst the dollar, except theBritish pound, the Euro, the

Australian dollar and New Zealanddollar.

lBe careful with rises/falls

lWeakening = depreciationlStrengthening = appreciation


6/31

Yielding to Bond NumbersYielding to Bond Numbers

lYields move inversely to prices

lYields are expressed in percentagepoints; changes in yields areexpressed in basis points.

lBond prices are relevant only instories about bond trading;

otherwise, just the yield is fine.


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On AverageOn Average

lMean

lMedian

l

Mode


8/31

Key Numbers for CompaniesKey Numbers for Companies

lNet profit

lOperating profit

lRevenuelLong-term interest bearing

debtlForecasts


9/31

l Apple Concludes Best Quarter & Best Year inCompany History

l CUPERTINO, Calif., Oct. 11 /PRNewswire-FirstCall/ --Apple(R) today announced financial results for its fiscal

2005 fourth quarter ended September 24, 2005,reporting the highest revenue and earnings in theCompany's history.

l

l Apple posted revenue of $3.68 billion and a net quarterlyprofit of $430 million, or $.50 per diluted share. Theseresults compare to revenue of $2.35 billion and a netprofit of $106 million, or $.13 per diluted share, in theyear-ago quarter. Gross margin was 28.1 percent, upfrom 27.0 percent in the year-ago quarter. Internationalsales accounted for 40 percent of the quarter's revenue.

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l Earnings per share benefited by $.12 from several tax

items related to net deferred tax assets, tax reserves,and a revision to the full year tax rate estimated in priorquarters.

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l Apple shipped 1,236,000 Macintosh(R) units and6,451,000 iPods during the quarter, representing 48

percent growth in Macs and 220 percent growth in iPodsover the year-ago quarter.


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l For fiscal 2005, the Company generatedrevenue of $13.93 billion and a net profit of$1.335 billion, reflecting annual growth of

68 percent and 384 percent, respectively,and representing the highest annualrevenue and net profit in the Company'shistory.

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"We're very pleased to report 48 percentyear-over-year growth in Mac shipments inQ4, as well as our 10th consecutive quarterof record iPod sales," said PeterOppenheimer, Apple's CFO.

l "Looking ahead to the first quarter of fiscal2006 which will span 14 weeks, we expectrevenue of about $4.7 billion. We expectGAAP earnings per diluted share of about$.46, translating to non-GAAP EPS of about

$.49."l


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l

l Oct. 11 (Bloomberg) -- Apple Computer Inc. said fourth-l quarter profit rose on sales of iPod music players and back-to-l school demand for Macintosh computers. The shares tumbled as muchl as 11 percent after revenue missed analysts' estimates.l Net income rose to $430 million, or 50 cents a share, froml $106 million, or 13 cents, a year earlier, Cupertino, California-l based Apple said today in a statement. Sales increased 57 percentl to $3.68 billion, compared with estimates of $3.74 billion.l IPod demand also fell short. Shipments of the music playersl climbed to 6.45 million units, missing analyst predictions thatl ranged as high as 8.5 million. Analysts had predicted that thel new pencil-thin Nano, introduced by Chief Executive Officer Stevel Jobs last month, would fuel sales. Instead, Apple said today itl couldn't make the Nanos fast enough to meet demand.l ``They missed the top-line estimates on revenue and theyl missed the overly optimistic estimates on iPod shipments,'' saidl Jim Grossman, who helps manage $63 billion and owns Apple sharesl at Thrivent Financial in Appleton, Wisconsin.l Shares of Apple, which have risen 60 percent this year, felll $5.54 to $46.05 in extended trading. They earlier rose $1.22 tol $51.59 at 4 p.m. in Nasdaq Stock Market composite trading. Thel stock more than tripled last year.l Net income included a tax benefit of 12 cents a share, Applel said. Profit this quarter will be about 49 cents on revenue ofl $4.7 billion, Apple said in the statement. Analysts werel expecting profit of 48 cents on sales of $4.53 billion.l


12/31

Oct. 11 (Bloomberg) -- Daimaru Inc (8234 JP) reported half-yearconsolidated earnings results for the period ended Aug. 31. Figures otherthan EPS are in millions of yen.

Operating Current Net EarningsRevenue Profit Profit Income Per Share

Half-Year Results 396,852 12,250 11,768 6,321 23.79Year Earlier 393,992 10,339 10,109 5,009 18.73Versus Results 0.7% 18.5% 16.4% 26.2%

Company Forecast 394,700 11,300 11,000 5,700Versus Results 0.5% 8.4% 7.0% 10.9%Toyo Keizai Est. 394,700 11,300 11,000 5,700 21.00Versus Results 0.5% 8.4% 7.0% 10.9%Full Year Forecast 816,400 29,500 28,300 15,600 59.19Previous Full Year 809,275 26,136 25,387 14,499 53.99

Versus Forecast 0.9% 12.9% 11.5% 7.6%Old Forecast 814,400 28,500 27,500 5,000 56.28


13/31

1 Microsoft to buy bio software operationSEATTLE (Reuters) - Microsoft Corp (MSFT.O) said on Monday

it would buy some of the assets of Rosetta Biosoftware, partof a Merck & Co Inc (MRK.N) unit which makes datamanagement software for medical researchers, furtheringMicrosoft's push into the expanding healthcare technologybusiness.

As a result of the deal, whose value neither companydisclosed, Microsoft said it would be able to add a numberof new capabilities to its Amalga Life Sciences softwareplatform for medical researchers, including themanagement of genetic, genomic, metabolomic and othertypes of complex data.

Under the agreement, Merck will become a customer of thecurrent version of Amalga Life Sciences for use in itsresearch activities.

2.
http://www.reuters.com/finance/stocks/overview?symbol=MSFT.Ohttp://www.reuters.com/finance/stocks/overview?symbol=MRK.Nhttp://www.reuters.com/finance/stocks/overview?symbol=MRK.Nhttp://www.reuters.com/finance/stocks/overview?symbol=MSFT.O


14/31

Magna Aims to Complete Purchase of GMs Opel Unit bySeptember

June 3 (Bloomberg) -- Magna International Inc., Canadas

biggest auto-parts maker, said it aims to complete thepurchase ofGeneral Motors Corp.s European operations bySeptember, once antitrust regulators approve theacquisition.

The timeframe is very tight, Magna Co-Chief Executive

Officer Siegfried Wolftold reporters today at theRuesselsheim, Germany, headquarters of GMs Adam OpelGmbH division. We dont have a second to lose.

Wolf and Opel labor leaders met today for the first time sinceMagna and Russian partner OAOSberbank reached an

agreement with GM on May 30 to buy the unit. Wolf said hewants to sign a purchase contract with the Detroit-basedcarmaker after a five-week review of Opel and its Vauxhallsister brand in the U.K.

German Chancellor Angela Merkels government approvedMagnas purchase of the GM Europe division under a plan toprovide 1.5 billion euros ($2.1 billion) in loans to keep theunit afloat. As many as 11,000 jobs may be eliminatedacross Euro e includin 2 600 in German followin the
http://www.bloomberg.com/apps/quote?ticker=MG/A:CNhttp://www.bloomberg.com/apps/quote?ticker=GM:UShttp://search.bloomberg.com/search?q=Siegfried+Wolf&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://www.bloomberg.com/apps/quote?ticker=SBER:RUhttp://www.bloomberg.com/apps/quote?ticker=SBER:RUhttp://search.bloomberg.com/search?q=Angela+Merkel&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://www.bloomberg.com/apps/quote?ticker=MG%5CA:CNhttp://www.bloomberg.com/apps/quote?ticker=MG%5CA:CNhttp://search.bloomberg.com/search?q=Angela+Merkel&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://www.bloomberg.com/apps/quote?ticker=SBER:RUhttp://www.bloomberg.com/apps/quote?ticker=SBER:RUhttp://search.bloomberg.com/search?q=Siegfried+Wolf&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://www.bloomberg.com/apps/quote?ticker=GM:UShttp://www.bloomberg.com/apps/quote?ticker=MG/A:CN


15/31

Cisco knocks GM out of Dow Jonesindex

Citigroup and General Motors, once two of the biggestflag-bearers of US business, were on Monday dumped fromthe Dow Jones Industrial Average, the most high-profile USstock market barometer.

They were replaced by Travelers, the insurance companyformerly owned by Citigroup, and Cisco Systems, themaker of networking equipment.

GM, which on Monday filed for bankruptcy, and Citigroup, therecipient of $45bn of US taxpayer aid, are the firstcompanies to leave the Dow since AIG was removed inSeptember. Their shares have lost more than 90 per centsince the start of 2007.

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http://markets.ft.com/tearsheets/performance.asp?s=us:Chttp://markets.ft.com/tearsheets/performance.asp?s=us:GMhttp://markets.ft.com/tearsheets/performance.asp?s=us:TRVhttp://markets.ft.com/tearsheets/performance.asp?s=us:CSCOhttp://markets.ft.com/tearsheets/performance.asp?s=us:CSCOhttp://markets.ft.com/tearsheets/performance.asp?s=us:TRVhttp://markets.ft.com/tearsheets/performance.asp?s=us:GMhttp://markets.ft.com/tearsheets/performance.asp?s=us:C


16/31

l JR East to Buy Kinokuniya Supermarket to Reinforce RetailBusiness

l

l East Japan Railway Co. will acquire the entire stake in ahigh-end supermarket operator Kinokuniya Co. in April toboost sales from non-railway operations. The transactionmarks its first move into supermarket business.

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l JR East operates retail stores in its station shopping mallsand convenience stores, which earn 30% of total sales. Itaims to drive growth through retail operations and raisethe share to 40% by 2017 as the railway business willslow down with aging population. Kinokuniya, founded in1910, has 17 stores in the Tokyo metropolitan area with3 at JR stations.


17/31

The railroad company plans to open stores in its key stations andadjacent commercial facilities as well as larger suburban outlets with the

brand-name of Kinokuniya in addition to the existing stores.The acquisition would prompt Seijo Ishii Co., which operates 10supermarkets in JR station buildings, to explore a new partnership.Odakyu Electric Railway and Tokyu Corporation show an interest in theKinokuniyas competitor to shore up their retail subsidiaries.


18/31

l Kraft of the U.S.A. is poised to take over Cadbury of theU.K. Yet, as Notre Dame Coach Vince Lombardi said, Itaint over till its over! Warren Buffet, who controlsBerkshire Hathaway, controls 9.4% of Kraft, the largest

stake in the American company. Buffet admonishes KraftCEO Irene Rosenfeld and the board not to offer too muchfor Cadbury.

l Buffets noise shoved Cadbury share price down byalmost 10%. Kraft shares were high-priced, but it

brandished lots of cash. Kraft traded yesterday at about$27 to $29 a share. Kraft shares are a very expensivecurrency to be used in an acquisition, Buffet declared.So, in Buffets mind, let them eat dollars. Cadburyshares skidded 3.23% to L7.58 per share on the news.


19/31

l Kraft is cash rich; it recently sold North American Pizza(name?) to Nestle of Switzerland. Nestle, exhausted fromthat deal, slumps out of the bidding for Cadbury.

l Hershey of the USA still hovers as a hostile bidder.

l Voices on The Street buzzed conspiratorial. Buffet andRosenfeld should be on Broadway, quipped one WallStreet broker. They are phony duelists. This only drivesCadburys price down for those two vultures. Hersheydoes not have the harumph for the deal. Hershey, its

credit rating stressed, would have to issue more Hersheyshares to finance the deal. Kraft is cash rich and willprobably issue bonds to clinch the deal.

Kraft may also offer cash instead of shares, Buffet said.The company had reserves of

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20/31

l Billionaire investor Warren Buffet may quash Kraftstakeover bid for Cadbury by insisting Kraft CEO IreneRosenfeld push the price down.

l Buffet, whose Berkshire Hathaway is the biggestshareholder in Kraft with 9.4 percent, yesterday said hewants to be certain Kraft does not overpay.

l Cadbury shares plummeted 10 percent after Buffetsremarks were reported. The U.S.-based foodmaker has

offered Cadbury shareholders 0.75 Kraft shares for eachshare of the U.K.-based confectioner. Cadbury may beforced to accept a lower price as its shares have slid 32percent since 4, when the company reported a wider-than-expected loss.

l Kraft shares are a very expensive currency to be usedin an acquisition, Buffet said.

l Cadbury shares skidded 3.23% to close at 7.58 poundsafter Buffets comments.


21/31

ReinsuranceReinsurance

lThis procedure is used by insurance companies toreduce the risks associated with underwrittenpolicies by spreading risks across alternativeinstitutions. It's like portioning out pieces of a

larger potential obligation in exchangefor some of the money the original insurerreceived to accept the obligation.

The party that diversifies its insurance portfolio

is known as the ceding party. The party thataccepts a portion of the potential obligation inexchange for a share of the insurance premiumis known as the reinsurer.
http://www.investorwords.com/3880/profits.htmlhttp://www.investorwords.com/3880/profits.html


22/31

ActuaryActuary

lA professional statistician working foran insurance company. Theyevaluate your application and

medical records to project how longyou will live
http://www.investorwords.com/4389/savings_and_loan.htmlhttp://www.investorwords.com/4389/savings_and_loan.html


23/31

PremiumPremium

lThe specified amount of paymentrequired periodically by an insurerto provide coverage under a given

insurance plan for a defined periodof time. The premium is paid by theinsured party to the insurer, and

primarily compensates the insurerfor bearing the risk of a payout.


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Whole life insuranceWhole life insurance

lA life insurance contract with levelpremiums that has bothan insurance and an investment

component. The insurancecomponent pays a stated amountupon death of the insured. The

investment componentaccumulates a cash value that thepolicyholder can withdraw orborrow against.
http://www.investorwords.com/832/chartered.htmlhttp://www.investorwords.com/832/chartered.html


26/31

Liability insuranceLiability insurance

lAny type of insurance policy that protectsan individual or business from the riskthat they may be sued and held legally

liable for something such as malpractice,injury or negligence. Liability insurancepolicies cover both legal costs and anylegal payouts for which the

insured would be responsible if foundlegally liable. Intentional damage andcontractual liabilities are typicallynot covered in these types of policies.
http://www.investorwords.com/3178/mutual_savings_banks.htmlhttp://www.investorwords.com/3178/mutual_savings_banks.html


27/31

Mutual companyMutual company

lA company whose profits aredistributed in proportion to theamount of business each

participant does with the company.Examples include federalsavings and loan associations,

state-charteredmutual savings banks, and mutualinsurance companies.
http://www.investorwords.com/3880/profits.htmlhttp://www.investorwords.com/4389/savings_and_loan.htmlhttp://www.investorwords.com/832/chartered.htmlhttp://www.investorwords.com/3178/mutual_savings_banks.htmlhttp://www.investorwords.com/3178/mutual_savings_banks.htmlhttp://www.investorwords.com/832/chartered.htmlhttp://www.investorwords.com/4389/savings_and_loan.htmlhttp://www.investorwords.com/3880/profits.html


28/31

Stock insurance companyStock insurance company

lA life insurance company owned byshareholders who share in itsearnings, as opposed to a mutual

company, which is owned bypolicyholders.
http://www.investorwords.com/2807/life_insurance.htmlhttp://www.investorwords.com/4527/shareholders.htmlhttp://www.investorwords.com/1618/earnings.htmlhttp://www.investorwords.com/3729/policyholders.htmlhttp://www.investorwords.com/3729/policyholders.htmlhttp://www.investorwords.com/1618/earnings.htmlhttp://www.investorwords.com/4527/shareholders.htmlhttp://www.investorwords.com/2807/life_insurance.html


29/31

Credit default swapCredit default swap

lA tradeable contract in which a partyagrees to pay an annual interestrate in exchange for the promise to

pay the face value of a bond orloan should the issuer fail to fulfillits payment obligations, i.e. default.


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Fourth Class Winter 2010

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Transcript of Fourth Class Winter 2010