Math Tools for Journalists: Chapters 5-8

Chapters 5-8 of Math Tools for Journalists continue to explore how reporters use numbers in their journalistic pursuits. Image courtesy of Fresh Bump.

Math Tools for Journalists is a comprehensive book about how journalists use numbers and, more specifically, what knowledge of numbers is vital in order to succeed as a journalist. Chapters 5-8 of the book go over polls and surveys, business, stocks and bonds, and property taxes, some of which at face value may not seem like they would be relevant, but Dr. Wickham reveals in each of the chapters why it is important for journalists to know about these areas of math.

Chapter Five starts out with polls and surveys. It is a no brainer for any reporter that polls and surveys will frequently accompany a news story, and that the usage of polls and surveys can only enrich the journalist’s text. But one of the main things Wickham emphasized in this chapter is numbers can be, and are frequently, skewed in poll results. It is very important to ensure that no bias accompanies a poll, unless that bias is intentional and clearly stated so that readers understand the true meaning of the survey results. Random selection may seem easy and random, but the reality is, true randomness is hard to attain. Wickham also goes over margin of error and confidence levels, which can alter the results of a survey if they are not taken into consideration. She finishes the chapter by discussing the census, and how to properly read the results of a census report, in addition to a quick overview of t-scores and z-scores.

The numbers of business reporting enhance the story to make it more intelligent and more tangible for readers. Image courtesy of Moyal Accounting.

Business is a huge component of news. Every single there, there is at least one article, sometimes a whole section, devoted to the news of business. Since business employs many math skills, journalists should be aware of these skills and know how to employ them in their reporting. Looking at financial statements can tell a journalist about a company’s business transactions. The profit and loss statement of a business shows whether it is making money or not, and the specific breakdown of where money of a business is gaining or losing. Keep in mind gross margin and EBIDTA when calculating P&L statements. Balance sheets will show how financially stable a company is, through assets and liabilities. Being familiar with the ratio formulas is also useful to evaluate a business’ cash situation, profitability, operating efficiency and market value.

The seventh chapter goes over stocks and bonds, which is vital for a journalist to know because these are two important ways that companies raise money. Having knowledge of how stocks and bonds work will assist a journalist in reporting on businesses fairly and intelligently. Knowing the formulas for current yield and bond cost is helpful, as is being able to read and interpret market indexes. Wickham also gives a general overview of the Dow Jones Industrial Average and NASDAQ (National Association of Securities Dealers Automated Quotations), which are both directly related to the business of stocks and bonds.

Figuring out property tax may not seem like a skill a journalist would need, but stories about property tax are frequently very important and newsworthy. Image courtesy of Dahm's Real Estate.

Property taxes comprised the content in Chapter Eight. It is important to have a well-bred knowledge of property taxes because stories about property taxes are often big news and, therefore, a journalist cannot afford to not be well-informed about the subject. After introducing the concept of property taxes, Wickham discusses mill levy, which is taxes to be collected by the government divided by the assessed variation of all property in the taxing district. Wickham then provides formulas for appraisal value and assessed value before finishing the chapter on calculating tax, one of the most important financial skills that any person, journalist or otherwise, should know about.

These four chapters provided a lot of information and formulas for business-related numerical data that journalists will frequently stumble across if they are reporting. Having knowledge of these numbers, what they mean and why they are important will make the reporter not only more educated, but more enriched in his or her journalistic work.

Practice Problems

1. Sally Sue, a reporter for The CommStudent Gazette, wanted to know how many college students drank coffee at least once a day four days a week. What sampling method would this be an example of? Why? (Sally Sue would employ quota sampling when conducting this poll because she is targeting a specific, identified demographic: college students.)
2. A department store bought 10,000 pieces of new merchandise from a buyer at $5.00 for each piece. The shirts were full price at $32.00 in the store for one week, in which 5,291 were sold. Joseph Johnson, the store’s manager, estimates his weekly overhead to be $70,000, which includes employee salaries, utilities and other related expenses. What was the store’s net profit on the new merchandise? (Multiply 10,000 by 5 to get $50,000. Add 50,000 to 70,000 to get $120,000. Next, multiply 5,291 by 32 to get $169,312. Finally, subtract 120,000 from 169,312 to get $49,312, which is the net profit on the new merchandise for that week.)
3. Zadie, a business reporter for her city’s paper, found that a company paid $8,000 for a bond with a $9,750 face value and a 4 percent interest rate. What is the bond’s current yield? (Multiply 4 percent by 9,750 to get $390. Divide 390 by 8,000 to get 0.04875. Move the decimal point over two places to get the answer: 4.9 percent)
4. Michael owns two homes: his home in Raleigh, appraised at $567,000 with a tax rate based on 50 percent of its true value, and his beach home in the Outer Banks, appraised at $390,000 with a tax rate based on 70 percent of its true value. The Outer Banks provides a $15,000 credit for homeowners. What are the assessed values of each home? (For the Raleigh home: multiple 0.5 by 567,000 to get $283,500. For the Outer Banks home: subtract 15,000 from 390,000 to get $375,000, then multiply 375,000 by 0.7 to get $262,500.)