Math Tools for Journalists: Chapters 5-8

May 5, 2009 at 1:48 pm Leave a comment

How a journalist should analyze polls, surveys, business, stocks and bonds and property taxes.

By Patrick McCabe

No one, not even journalists can escape the math world. Math is a great tool for a journalist to present cold hard facts using numbers and journalists use a variety of math tools in their pieces.

Polls and Surveys

 While both polls and surveys are based on representative samples of a population polls are an estimate of public opinion based on one question or topic that is being presented while surveys look at variety of questions.pie

When evaluating polls remember the following:

  • Name and background of polling organization
  • Who paid for the poll
  • How and when the poll was conducted
  • The exact wording of the question asked
  • The size of the sample and response rate
  • The sample method
  • The margin of error
  • The relationship recent events may have had on the poll results

Remember these tips will help any reporter who chooses to use polls when reporting on a story. These tips can also help a reporter using samples but they should remember that a sample looks to represent a population while a poll aims for approximately 400 participants.

Business

The world of business often produces major news and is chalked full of math. Examples of business news include financial statements, profit and loss statements, balance sheets and ratio analysis. These documents provide a number of tools journalists can use when reporting on a businesses financial status or big financial endeavors.

Tips for dealing with financial statements:

  •  Numbers are often written in “thousands” or millions,” deleting the last zeros. Watch out for this because it can trick you.
  • Figures in parentheses are negative.
  • Compare net figures over time, it is more newsworthy to report changes over time than to report one years numbers.

These tips will help you analyze financial statements that are trying to trick a ill informed reporter.

Stocks and Bonds

Stocks and bonds are how most businesses make money. Bonds are also used by the government to raise funds. Understanding these money making tools is important for all journalists.investing-stocks-bonds-2

Stocks are sold by companies to share holders. Once a share holder is in possession of stock they become a part owner in the company but because there are so many stocks sold each year shareholders often represent a tiny portion of ownership.

Stocks change worth overtime. The more people want a stock the higher its price will go and the higher the shareholders worth will be. Mutual funds are also an option for stock enthusiasts but mutual funds invest in a variety of companies with a “mutual” interest as opposed to one specific company.

A bond is simply a loan form an investor to the government or other selling organization that earns interest over a period of time. Bonds are generally low-risk investments.

The bond owner pays “face value” for a bond and receives an annual interest rate. At the completion of the bond the owner will also receive the face value.

FOR EXAMPLE:

A bond is purchased for $1,000 with a 5 percent interest rate and a maturity date of 30 years. The bond owner will receive $50 each year and after 30 years will receive the $1,000 face value.

Bonds can be tricky because their value fluctuates with supply and demand.

Property Taxes

Property taxes are the largest source of income for local government, school districts and other municipal organizations. A property tax rate is determined by taking the total amount of money the government needs and dividing that by the total number of property owners. How much each owner pays is based on the value of their property. While most districts only take into account real property like real estate, homes and buildings, some also tax valuable assets. 

 

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