Business Literacy

PRSA Certificate in Principles of Public Relations

April 26, 2014

America’s Investor Class• 54 percent of Americans own stocks, mutual

funds and bonds; 73 percent college graduates; 83 percent post grads

• Internet Trading Tools; IRAs, 401Ks

• Longer life spans; higher health care costs; college tuition

24-Hour Global Markets

• NYSE-NASDAQ; US • FTSE (“Footsie”) UK• DAX (Germany)• CAC-40 (France)• Nikkei (Japan)• Hang Seng (Hong Kong)

24-Hour Financial News• Wall Street Journal, Financial Times, Investor’s

Business Daily• Fortune, Forbes, Business Week, Barron's• CNBC, Fox Business, Bloomberg TV• The “Money Honey” and “Mad Money”

• AP, Dow Jones, Reuters, Bloomberg, TheStreet.com• Bloggers, Social Media and Chat rooms• PR Newswire, Business Wire, Internet Wire

Introducing the NYSE

• NYSE – Founded 1817• “The Big Board”• $16.6 trillion Market Cap • 2,308 listings• Venerable Companies• Ringing the Bell• Pounding the Gavel

Introducing the NASDAQ

• Founded in 1971

• “Electronic Exchange”

• $4.45 trillion market cap

• 2,709 listings• National Association of Securities Dealers

Automated Quotations (NASDAQ)

SEC Disclosure Rules

• Annual Report to Shareholders (10-K)• Quarterly Earnings Reports (10-Q)• Major Unplanned Announcements (8-K)

– Upside / Downside Guidance Variations– Mergers and Acquisitions– Restructurings

• Annual Meeting of Shareholders• Prospectus for Planned IPO (S-1)

Sarbanes Oxley 2002

Public Company Accounting Oversight Board (PCAOB)

● Auditor Independence

● CEO and CFO Certification of Results

● Criminal Offenses for Fraud/Records Tampering

SEC Fair Disclosure

• Regulation FD provides that when a company discloses “material” nonpublic information to certain individuals or entities — such as stock analysts or shareholders — the company must make public disclosure of that information. In this way, the new rule aims to promote the full-and-fair disclosure.

• (Media Exempted)

What Are The World’s Most Dangerous Questions?

• “How’s Business?”

• Selective Disclosure?

• What is “Material?”

Quick Market Definitions

• GAAP: Generally Accepted Accounting Principles

• EPS: Earnings Per Share

• IPO: Initial Public Offering

• Market Capitalization: Share price x Number of Shares Outstanding = Value

• SEC: Securities Exchange Commission

Q2 2014 Financial StatementMicrosoft (NASDAQ: MSFT)

• Revenues: $24.51 billion• COGS: $8.28 billion• Gross Margin: $16.23 billion• SG&A: $5.51 billion• R&D: $2.74 billion• Operating Margin: $7.96 billion• Taxes: $1.32 billion• Net Income (Loss): $6.55 billion