Make Sense of Numbers in Writing About Business

Like most people who went on to become journalists, I knew early on that I wasn't going to get along easily with numbers. Algebra made it plain that I wasn't the reincarnation of Max Planck, but I relished writing essays. Here, I thought, is something I could do well.

Odd, then, that my career path led me to business writing, the newspaper specialty that most requires a working familiarity with numbers. My first few years as a business reporter and editor produced countless opportunities to screw up numbers in stories, and as often as not, I seized them.

I'm not talking about calculus here, but about the simplest mathematical challenges. Figuring percentages, for instance: If 493 manufacturing executives expect a recession and 722 don't, what percentage is in each camp?

Go on, confess it. Your brain grinds a gear when you have to calculate something on your own. How many times have you, desperate for help, asked other reporters to backstop you on numbers, and how many times have they confused matters even more?

"We do not expect reporters to be mathematical geniuses," math professor A.K. Dewdney writes in a witty and instructive book titled 200 Percent of Nothing. "But we do expect them to sidestep their mind-numbing fear of mathematics long enough to ask,'Does this make sense? What would I conclude from these numbers?'"

Indeed, you can make more sense of numbers. All we need to do is admit our weakness, analyze our ignorance and set out to fill in our gaps.

Let's take a romp through two of the more confusing areas in which business journalists can find themselves.

Percentages and affiliated problems: In a perfect world, students wouldn't get promoted to middle school unless they could calculate percentages, but, alas, they do. So let's review this crucial calculation. In the case of the manufacturing executives mentioned above, you find the percentage in each camp by adding the two categories and dividing each by that total:

493 + 722 = 1,215

493/1,215 = 0.406

722/1,215 = 0.594

Move the decimals two places to the right (the equivalent of multiplying by 100), et voila -- we see that 40.6 percent expect recession and 59.4 don't.

Let's say that the last time the executives were polled, 38.6 percent expected recession. What's the change since then? It's 2.0 percentage points -- not percent. The difference between the two can flummox some people, so here's some guidance. Use percentage point when you are comparing two different percentages. Use percent to show the relative change in an original amount. If a company's profit margin rises from 10 percent to 12 percent, that's a 2 percentage point increase. If we said it increased 2 percent, we would be saying that the original 10 percent had itself increased by 2 percent -- in other words, by 2/100 of 10 percent, or 0.2 percent. As you can see, there's a big difference.

Still confused? Let this site do the work for you:

Average, mean and median: Too many of us are confused about these terms -- unfortunate, since they form the basis of the statistical stories we write. Let's shed some light on them.

First, consider this set of numbers: 65, 77, 82, 90, 92. The mean is the arithmetic average -- the average we most commonly refer to. To find it, add the numbers and divide by how many there are: (65 + 77 + 82 + 90 + 92)/5 = 81.2. The median is the number in the middle -- in this case, 82.

The use of averages can be deceiving, and reporters need to be hip to the ways in which they can be manipulated. Let's look at a local business' payroll:

President: $100,000

Vice president $75,000

Bookkeeper $12,000

Clerk 1 $12,000

Clerk 2 $8,000

Janitor $6,000

If you add the salaries and divide by their number, the mean, or average, is $35,500 -- a respectable amount. But that result is skewed by the high pay of two people; a more realistic measure would be the median pay, which is that point at which there are an equal number of salaries above and below -- in other words, $12,000.

Those are just two of the most common numeracy problems business reporters and editors face. Entire books have been written about the topic in general, and every business journalist should read at least one of them. Let me single out three:

• A.K. Dewdney's book, subtitled An Eye-Opening Tour Through the Twists & Turns of Math Abuse & Innumeracy. (John Wiley and Sons, 1993). It's available through Amazon.com.



• Numbers in the Newsroom: Using Math and Statistics in News by Sarah Cohen, the Pulitzer Prize-winning database editor of The Washington Post. (Investigative Reporters and Editors, 2001). Available for $25 from the IRE Web site, this is a terrific guide to avoiding the pitfalls of numbers, statistics and polling.



• Math Tools for Journalists, by Kathleen Woodruff Wickham ( Marion Street Press, 2002). Wickham, who teaches journalism at the University of Mississippi, helpfully includes drills and real examples from newsrooms -- both designed to build the confidence of the most numbers-challenged journalist.

Every business journalist should have a basic mastery of numbers. As Dewdney says, we don't have to be geniuses. But we needn't be dunces, either.

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism