business research for “non-business” librarians ola superconference february 4, 2005

Business Research for “Non-Business”

LibrariansOLA Superconference

February 4, 2005Helen KatzManager

Research & Information ServicesOntario Ministry of Finance

Outline

• Business and Management Topics• People• Industry Codes• Companies• Industries

Business and Management Topics

• Terminology• Sources

Terminology

• Dictionaries• Google – define function (still need

to evaluate sources) Example:

Define: initial public offering

Sources of Management Information

• ABI/Inform Proquest – Dialog, Factiva, Lexis, Firstsearch

• Business and Management Practices - Dialog

• Business Periodicals Index (Wilson Business Abstracts) – Firstsearch, Dialog

• Canadian Business and Current Affairs (CBCA) – Dialog, FPInfomart

Proquest - ABI/Inform Classification Codes

9110 Company specific9120 Product specific9150 Guidelines9160 Biographical9510 Multinational companies9520 Small business9540 Nonprofit institutions

People

• Biographical sources• Regulatory filings• News & magazine articles

People

• Company officers• Directors

People Sources

• Company web sites• Canadian Who’s Who / Who’s Who in

Canada• FP Directory of Directors - FPInfomart• Standard & Poor’s Register of

Corporations, Directors, and Executives – Dialog, Lexis

• Annual Information Form, Proxy statement

• News articles from business periodicals, national or local newspapers – FPInfomart, Factiva, Dialog, Lexis

Industry Codes

• NAICS – North American Industrial Classification System

http://www.statcan.ca/english/Subjects/Standard/naics/2002/naics02-index.htm

• SIC – Standard Industrial Classification

Other Industry Codes

• Product Codes• Trade Codes

• International Harmonized Commodity Description and Coding System (HS) is used for classification of foreign trade

Companies

• Public or Private• Large Companies• Financial Information• Regulatory Filings

Basic Company Information

• Company address• Officers and directors• Background/history• Financial• Investment/stock• Corporate families• Bankers/Accountants/Lawyers

Basic Company Sources• D & B Canadian Key Business Directory -

Dialog• D & B Principal International Businesses -

Dialog• Standard & Poor’s Register of Corporations,

Directors, and Executives – Dialog, Lexis• ReferenceUSA Canadian Business Data• Scott’s directories

Specialized directories – by geography or industry

Companies

• Private company does not sell securities (shares) to the public• Federal or provincial registration

• Federal Corporations Data Online• http://strategis.ic.gc.ca/cgi-bin/sc_mrksv

/ corpdir/ dataOnline/search.cgi?lang=e• Public company sells securities to

the public• Has greater disclosure responsibilities

Companies in Canada

• 2,228,572 Canadian companies (June 2003 Business Register)

• 24,052 companies with 100 or over employees

• About 1,400 companies listed on TSX

• Over 2,000 companies listed on TSX Venture Exchange

Large Companies

• Financial Post 500• Canadian Business Investor 500• ROB Top 1000 (Globe & Mail)

Fiscal Year

• Full year of operation• Date to end the year is set for

financial purposes• Often December 31

• for retail – January 31 (or 52 weeks ending early January)

Financial Statements

Six components: Auditor’s Report Earnings Statement Balance Sheet Retained Earnings Statement of Changes in Financial

Position Notes to Financial Statements

Auditor’s Report

• Generally Accepted Accounting Principles (GAAP)• U.S., Canadian, International

• Opinion of auditor

Earnings Statement

• Income Statement, Statement of Revenue & Expense, Profit Statement, Results of Operations

• Operating Income – earned from operations of company

• Other Income – investment income

• Money earned & spent over the course of the fiscal year

Earnings Statement

Revenue from Sale of Goods Expenses incurred from Sale of

GoodsOperating Income

Non-operating IncomeIncome before TaxesIncome TaxesNet Income

Balance Sheet

Three parts:AssetsLiabilitiesShareholders’ Equity

Snapshot at the end of the fiscal year

Assets

What is owned by a company• Cash & investments• Inventories• Property (land & buildings)• EquipmentWhat is owing to the company• Accounts receivable

Liabilities

What a company owes• Payments• Loans• Bonds

Definition of Current Assets and Current

Liabilities

Shareholders’ Equity

• Shareholders’ ownership or investment in company

• Capital stock• Earnings retained (Cumulative

retained profit)

Difference between value of capital stock and market capitalization

Retained Earnings

• Link between Earnings Statement & Balance Sheet

• Cumulative profit

• Also known as Consolidated Statement of Shareholders’ Investment

Retained Earnings

Retained Earnings, Beginning of Period

Net Earnings for the Period

Dividends Declared

Retained Earnings, End of Period

Statement of Changes in Financial Position

• Cash flow statement• Shows how cash is generated &

spent• Certain items are on financial

statement as a cost, but there is no money spent

Statement of Changes in Financial Position

OperationsInvestmentFinancing

Increase (Decrease) in CashCash, at Beginning of PeriodCash, at End of Period

Notes to Financial Statements

• Integral part of financial statements• Explanation and details of information

found in financial statements

Guides to Reading Financial Statements(note that these are all pre-Sarbanes-Oxley)www.prars.com/ibm/ibmframe.htmlhttp://instruction.bus.wisc.edu/corecourses

/..%5Cmcarpenter/readings/financereport.pdf

Annual Report

• Management Discussion & Analysis• Auditor’s Report• Financial Statements• Notes to Financial Statements

• 10 Year Summary (usually)• Promotional/additional material in

annual report

Quarterly Report

• Unaudited financial statements• Comparison to previous quarter and to

same quarter previous year• Interim management discussion &

analysis

• Proforma financial statements• EBITDA (Earnings before interest,

taxes, depreciation, and amortization)

Proxy Statement

• Announcement of annual general meeting

• Selection of board of directors, auditors• Provides details of executive

compensation• Lists major shareholders (over 5% in

U.S.; over 10% in Canada)

Insider Trading

• Rules and regulations for directors and officers of companies regarding the sale or purchase of company stock

Disclosure• Prompt disclosure of material

information• Definition of material

• Sarbanes-Oxley Legislation (U.S.)• Executive certification of disclosure• Shortening of reporting deadlines• Impact on Canadian rules

• Fair Disclosure (FD) regulation (U.S.)• Impact on Canadian regulation

Common Filing Documents

• Annual Report• Management Discussion & Analysis• Annual Financial Statement

• Quarterly Report• Management Information Circular

(Proxy)• Annual Information Form

Financial Ratios

• Mathematical function representing relationship of one number to another

• Used to evaluate company financial statements

Financial Ratios

Types of ratios:• Liquidity• Profitability• Efficiency• Debt• Value

Debt Ratios

• Measures how well a company can deal with its debt obligations

• Examples:• Debt/Equity Ratio• Interest Coverage Ratio

Debt/Equity Ratio• Measures debt outstanding to the

monies invested in & earned by the company

• Leverage ratio - the extent to which the company is financed by debt

Interest Coverage• Measures how much the company earns

in relation to the interest it must pay

Value Ratios

• Measures the worth to investors of a company’s shares or the return on owning them

• Examples:• Earnings per Share• Price-Earnings Ratio (PE Ratio)

Earnings per Share• profit per share

Price-Earnings Ratio• comparison of market price to EPS• higher P/E ratio normally means

company is viewed more favourably by investors

FINANCIAL SOURCES

• www.sedar.com• FP Historical Reports, Investor

Reports, Analyzer (FPInfomart)• Corporate Retriever (Canadian) –

Micromedia ProQuest

Life Cycle of Business Information

• Press release• Wire service• Daily news• Newsletter• Weekly• Monthly

Ojala, Marydee. (1996). “The life cyle of business information.” Database, June/July, p. 79-81.

Industries

• Government Statistics• Associations• Investment Sources• News and Magazine Articles

Industry Search Strategy

1.Government sources - be creative• Statistics Canada, Strategis, Natural

Resources

2.Industry overviews in trade journals3. Trade associations4. Specialized reports on the industry

(either ongoing or special)5. Articles in the press or in periodicals

(databases)6. Consultants, accounting firms7. Competitors8. Experts

Issues

• Specificity of data• that is, is the data available at

the detail you need

• Currency of source• Currency of data

Industry Sources

• Mergent Industry Reports (include Canada)

• Standard and Poor’s Industry Reports• Business & Industry database – Dialog• Tablebase (database) – Dialog• Investext – Dialog, Lexis• Gale Group PROMT – Dialog• Gale Group Trade & Industry - Dialog

Performance Benchmarking

Performance Plus• Uses Small Business Profiles from

Statistics Canada• Most current data is from 2000

http://strategis.ic.gc.ca/epic/internet/inpp-pp.nsf/en/Home

General SourcesWeaver, Maggie. (2001). The Canadian B2B

Research Sourcebook: Your Essential Guide. Ottawa: Canadian Library Association.

Encyclopedia of Business Information Resources. Farmington Hills, MI: Gale Group. Annual.

 Moss, Rita W. (2004). Strauss’s Handbook of

Business Information: A Guide for Librarians, Students and Researchers. 2nd ed. Westport, CT.: Libraries Unlimited.

Helen KatzManagerResearch and Information

ServicesOntario Ministry of Finance

Helen.katz@fin.gov.on.ca