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