Sid Cato -- March 2004 Quiz Answers

(Answers for March 2004)

1. You've pretty much withdrawn your concern about the state of annual reports, in no small part because of the early arrivals for 2003. True or false?
Answer: False. Early-arriving annuals, turned out by companies on a fiscal-year basis, tend to be relatively poor—by comparison, that is, to those of companies on a calendar year. The current, 2003 crop is no exception: Overall, reports average a 4.7% Cato Positive Index (which monitors three dozen AR elements). At the very same stage of the evaluation process a year earlier, the CPI was 5.9%. (I could have told you that, even without comparing year-to-year figures.) At year's end among 2002 books, the average CPI was 10.1%. Pardon the cliché, but hope springs eternal.

2. You've altered your stand concerning the annual report—that it's best left to professional communicators, rather than conservative corporate types. True or false?
Answer: False again. I'm convinced that those to make our annual list of world's best, scoring at least 100 of a potential 135 points, inevitably are the handiwork of journalists. I recall telling the CFO of a corporation of which I was an officer: "I don't cobble up numbers; you don't write prose."

3. "Is the print annual report dead?" no longer appears a concern. True or false?
Answer: On the contrary, it sometimes seems a losing battle—to help maintain a high standard for this key communications platform. Thank goodness there remains a cadre of hard-nosed communicators, as I like to think I am, who fight for a document that communicates a company's story well, and completely. People, for instance, who know enough to identify all employees pictured in the annual, just as all officers and all directors are identified. (To allow employees to remain anonymous, faceless masses, indicates conclusively what kind of company they're employed by.)

4. Despite the decreasing number of publicly held companies, not only here but abroad, you don't appear to lose producers desiring to attend your annual conference. True or false?
Answer: True, pretty much. Year after year, we continue to attract officer-level professional communicators, oftimes, newcomers to the assignment their bosses want brought up to speed. What amazes me is that many attendees at our conference come back for more, year after year. Many tell me our conference serves to jump-start the process, get the producers to focus on the task at hand, challenging indeed—and, most assuredly, not a job for amateurs.

5. You've long attacked EBITDA—at least, companies that employ that financial measurement, which you no longer consider deceptive. True or false?
Answer: False. I doubt if I'll ever sign off on EBITDA, which I insist makes it possible for bad actors to play games with their results. My case was made—again!—in the 2003 book of Switzerland's Roche Group. Roche fell back on that device, bad enough—but chose to interpret it slightly differently: as "Earnings before exceptional items and interest and other financial income, tax, depreciation and amortization, including impairment." That's an addition to the standard (if opposed) definition.

6. Finally—finally! You've stopped poking fun at Walt Disney's cloddish CEO, currently taking heat from former directors (one bearing the name on the door) plus beau coup pension-fund managers. True or false?
Answer: Poor guy: He's on the hot, hot, hot seat, his cushy job in jeopardy. At least his lengthy letter to shareholders did not—for the first time in years—include references to his family. Who, he was pleased, year after year, to point out, "Beg me not to embarrass them." But embarrass them he has done over the years. If Michael Eisner didn't exist, someone would have had to invent such a big-footed boob, an ex-ABC usher. Maybe his mother, wife and kids got a pass this year, but his letter—well, he just had to overcome his inherent modesty and use 10 first-person references. That's so outrageous I double-checked my facts to be sure I counted correctly. (Are you certain Eisner exhibited such immodesty, especially with all the flack he's taking currently? Yep, 10 it is.)

Return to March 2004 quiz page

Test your knowledge by taking previous monthly quizzes


	1.	You've pretty much withdrawn your concern about the state of annual reports, in no small part because of the early arrivals for 2003. True or false? *Answer:* False. Early-arriving annuals, turned out by companies on a fiscal-year basis, tend to be relatively poor—by comparison, that is, to those of companies on a calendar year. The current, 2003 crop is no exception: Overall, reports average a 4.7% Cato Positive Index (which monitors three dozen AR elements). At the very same stage of the evaluation process a year earlier, the CPI was 5.9%. (I could have told you that, even without comparing year-to-year figures.) At year's end among 2002 books, the average CPI was 10.1%. Pardon the cliché, but hope springs eternal.

	2.	You've altered your stand concerning the annual report—that it's best left to professional communicators, rather than conservative corporate types. True or false? *Answer:* False again. I'm convinced that those to make our annual list of world's best, scoring at least 100 of a potential 135 points, inevitably are the handiwork of journalists. I recall telling the CFO of a corporation of which I was an officer: "I don't cobble up numbers; you don't write prose."

	3.	"Is the print annual report dead?" no longer appears a concern. True or false? *Answer:* On the contrary, it sometimes seems a losing battle—to help maintain a high standard for this key communications platform. Thank goodness there remains a cadre of hard-nosed communicators, as I like to think I am, who fight for a document that communicates a company's story well, and completely. People, for instance, who know enough to identify all employees pictured in the annual, just as all officers and all directors are identified. (To allow employees to remain anonymous, faceless masses, indicates conclusively what kind of company they're employed by.)

	4.	Despite the decreasing number of publicly held companies, not only here but abroad, you don't appear to lose producers desiring to attend your annual conference. True or false? *Answer:* True, pretty much. Year after year, we continue to attract officer-level professional communicators, oftimes, newcomers to the assignment their bosses want brought up to speed. What amazes me is that many attendees at our conference come back for more, year after year. Many tell me our conference serves to jump-start the process, get the producers to focus on the task at hand, challenging indeed—and, most assuredly, not a job for amateurs.

	5.	You've long attacked EBITDA—at least, companies that employ that financial measurement, which you no longer consider deceptive. True or false? *Answer:* False. I doubt if I'll ever sign off on EBITDA, which I insist makes it possible for bad actors to play games with their results. My case was made—again!—in the 2003 book of Switzerland's Roche Group. Roche fell back on that device, bad enough—but chose to interpret it slightly differently: as "Earnings before exceptional items and interest and other financial income, tax, depreciation and amortization, including impairment." That's an addition to the standard (if opposed) definition.

	6.	Finally—finally! You've stopped poking fun at Walt Disney's cloddish CEO, currently taking heat from former directors (one bearing the name on the door) plus beau coup pension-fund managers. True or false? *Answer:* Poor guy: He's on the hot, hot, hot seat, his cushy job in jeopardy. At least his lengthy letter to shareholders did not—for the first time in years—include references to his family. Who, he was pleased, year after year, to point out, "Beg me not to embarrass them." But embarrass them he has done over the years. If Michael Eisner didn't exist, someone would have had to invent such a big-footed boob, an ex-ABC usher. Maybe his mother, wife and kids got a pass this year, but his letter—well, he just had to overcome his inherent modesty and use 10 first-person references. That's so outrageous I double-checked my facts to be sure I counted correctly. (Are you certain Eisner exhibited such immodesty, especially with all the flack he's taking currently? Yep, 10 it is.)