Sid Cato -- June 2002 Quiz Answers

(Answers for June 2002)

1. Some folks who hear you speak, or read your observations, do get it. True or false?
Answer: True. But most don't, year after year—which continues to amaze me, though I guess it shouldn't, given my familiarity with corporations and the games executives play. But some—specifically, DQE's Jerry Lucci—do, obviously. He attended a workshop on annual reports I conducted 15 or so years back—in Pittsburgh, then world's foremost annual report city. He has tried valiantly through the years, this time appears destined to make it to the upper echelons.

2. Be honest: What you're really focusing on is good design in annuals. True or false?
Answer: False. A report can achieve "world-class" status, scoring at least 100 of a potential 135 points, with poor design. But it certainly makes my task easier when I find a report that combines an inviting appearance with the three dozen ingredients I advocate a report contain.

3. So far among 2001 reports, the percentage to do well is declining something awful. True or false?
Answer: Untrue, I'd have to say, though to date the showing is a bit off from a year earlier. Among 2000 reports, 12 percent scored at least 100 points. That stands currently at 10 percent. Not a falloff that's "something awful," and I do believe the showing will improve as more good ones are evaluated. Those whose producers navigated the wicked corporate waters can be found at www.sidcato.com/topprod01.html

4. But aren't 2001 reports substantially worse? True or false?
Answer: Well, in this respect, that's true. To date, 2001s are averaging a 6.4 percent positive rating. At year's end among 2000 reports, they averaged a 10.6 percent Cato Positive Index, half again so positive.

5. When you talk about a report being such-and-such positive, you really mean you liked it, or not. True or false?
Answer: False. A report's positive or negative nature involves presence or absence of the three dozen indicators of a report's positive or negative nature. I dutifully log in a report and its contents, and sometimes I'm surprised at how well a report I didn't much care for does in this competition. My lone kicker is Category 15—that's about the only place where I can reward a good performer, or penalize a bad actor. Though my computer programs automatically deduct points for, for example, a letter than runs way longer than the average.

6. Same question asked last month: Companies, as indicated by their 2001 annual reports, aren't feeling terribly ebullient. True or false?
Answer: True, it appears to me. First indicator is the Cato Positive Index, trailing earlier years by a wide margin. Second, I'm seeing more disrespect shown the key corporate communiqué—more legalistic 10-Ks (half again so many, year to year) comprising the main body of the document . One in six companies playing games with the reader—either producing a summary report, or relying in whole or in part on the 10-K—without so identifying its document on the report cover as incomplete, truncated, the stockholder shortchanged. Ofttimes, without fair warning.

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	1.	Some folks who hear you speak, or read your observations, do get it. True or false? *Answer:* True. But most don't, year after year—which continues to amaze me, though I guess it shouldn't, given my familiarity with corporations and the games executives play. But some—specifically, DQE's Jerry Lucci—do, obviously. He attended a workshop on annual reports I conducted 15 or so years back—in Pittsburgh, then world's foremost annual report city. He has tried valiantly through the years, this time appears destined to make it to the upper echelons.

	2.	Be honest: What you're really focusing on is good design in annuals. True or false? *Answer:* False. A report can achieve "world-class" status, scoring at least 100 of a potential 135 points, with poor design. But it certainly makes my task easier when I find a report that combines an inviting appearance with the three dozen ingredients I advocate a report contain.

	3.	So far among 2001 reports, the percentage to do well is declining something awful. True or false? *Answer:* Untrue, I'd have to say, though to date the showing is a bit off from a year earlier. Among 2000 reports, 12 percent scored at least 100 points. That stands currently at 10 percent. Not a falloff that's "something awful," and I do believe the showing will improve as more good ones are evaluated. Those whose producers navigated the wicked corporate waters can be found at www.sidcato.com/topprod01.html

	4.	But aren't 2001 reports substantially worse? True or false? *Answer:* Well, in this respect, that's true. To date, 2001s are averaging a 6.4 percent positive rating. At year's end among 2000 reports, they averaged a 10.6 percent Cato Positive Index, half again so positive.

	5.	When you talk about a report being such-and-such positive, you really mean you liked it, or not. True or false? *Answer:* False. A report's positive or negative nature involves presence or absence of the three dozen indicators of a report's positive or negative nature. I dutifully log in a report and its contents, and sometimes I'm surprised at how well a report I didn't much care for does in this competition. My lone kicker is Category 15—that's about the only place where I can reward a good performer, or penalize a bad actor. Though my computer programs automatically deduct points for, for example, a letter than runs way longer than the average.

	6.	Same question asked last month: Companies, as indicated by their 2001 annual reports, aren't feeling terribly ebullient. True or false? *Answer:* True, it appears to me. First indicator is the Cato Positive Index, trailing earlier years by a wide margin. Second, I'm seeing more disrespect shown the key corporate communiqué—more legalistic 10-Ks (half again so many, year to year) comprising the main body of the document . One in six companies playing games with the reader—either producing a summary report, or relying in whole or in part on the 10-K—without so identifying its document on the report cover as incomplete, truncated, the stockholder shortchanged. Ofttimes, without fair warning.