How Sid Cato assesses writing

Writing is one area of annual reports that’s carefully scrutinized. Bad writing—as exemplified by excessive average words per sentence (AWPS) of more than the 16 professionals strive not to exceed—causes a report to take a double hit. AWPS already is a factor in the Cato Befogging Index (CBI). Additionally, the score dealing with readability of text is reduced a point for every two AWPS over that lid of 16. So 18 AWPS would knock down a score of 10 points to nine, 20 to eight, and so on. Questions we’re asked: "Is it true you evaluate only the first 100 words in the letter to shareholders?" Yes, but any block of 100 words would work equally well. "Do you count, say, ‘Fiscal 2003’ as one or two words?" One. Per cent or percentage—one word or two? One, and not complicated. "Do you count the salutation, ‘Dear Shareholder,’ among the first 100 words?" No. Neither are subheads counted—unless they’re part of the sentence. That very sentence—"Neither are subheads counted—unless they’re part of the sentence"—would be counted as two sentences, since a clever writer could have placed a period after the word "counted" and made "Unless they’re part of the sentence" a separate sentence, however brief. As with "Fiscal 2003," "The XYZ Corporation" would be treated as one word. So would "pro forma." "An add-on activity" would be counted as four words, though. None complicated. Generate, initiative, contribution (or contribute) would be treated as complicated. Sid Cato doesn’t count as complicated such words as these: Revenue or revenues. Dividend, or words like "salary," not in the context of an annual report. Or sales. "Spin-off" would be treated as one word, not complicated. Not complicated, according to my copyrighted (1990-2004) piece entitled "About writing," are: Capital, salary, subsidiary, electric, advertising, customer, environment, utilities, business, consolidated, continue, ratio, several, industry, dividend, economy, company or corporation, inventory, regulation, diversification, previous, quality, history, additional. "Superior" isn’t counted as complicated. Neither is "competitive," its foundation the two-syllable "compete." "Equivalent" is viewed as complicated, and so is "acquisition." The word "marketing" isn’t, but "organization" is. Also not counted as complicated in the context of an annual report are these words: Shareholder, stockholder, average, operate, energy, telephone, consumer, technology, financial, executive, affiliate, disability, premium, government, international, strategy, medical, cumulative, regulate, facilities, consecutive. Five percent (or 5%) is counted as one word. As with $100,000, and five million dollars, which could (and probably would) have been expressed as the numeral, $5,000,000. "Financial Accounting Standards Board" would be treated as a unit (one word), as would "Cato Befogging Index." I don’t view as complicated words like "equity" and "billion." A word like "comprehension," since its root is the three-syllable "comprehend," would—would—count as complicated. But "magical" would not, since its root is the two-syllable "magic." Fog index on the first 100 words of this treatise, in case you’re wondering, is a for-us-high 7.48*. I counted four complex words: "scrutinized," "exemplified," "professional" and "evaluate." I averaged 14.9 words per sentence, also somewhat high for me. (FYI: "Letter to shareholders" was treated as three words.) * Among 1996 reports, ace wordsmith Jim Dulicai, on behalf of Mills Corp., came up with a Cato Befogging Index of a phenomenally low 2.79, accompanied by 6.0 AWPS. The eagle-eyed Mr. Dulicai reminded us that his writing in the 1993 Mobil report was even finer: a 2.25 Cato Befogging Index, along with 5.6 AWPS.