Structure

The key to
writing with clarity and
power

Organizing thoughts into

words, sentences and
paragraphs
Words, the atoms of structure
l Verbs and nouns
l Concrete vs abstract
l Specific vs vague
l Simple vs complicated
l Familiar vs unfamiliar
l Layman's terms vs jargon

Business & Finance Writing Winter 2010 2

 Verbs and nouns
l Strong verbs = strong sentences =
clarity
 The Platinum Futures fund
outperformed stocks.
A fund t hat is com posed of Plat inum
fut ures had perform ance t hat was
bet t er t han t hat for st ocks.

Business & Finance Writing Winter 2010 3

 Verbs = Communication
Power
l Use active verbs
 The swap trading book is the one
that was closed by the broker on
Friday.
The swap t rading book is t he one t hat
was closed by t he broker on Friday.


The broker closed t he swap t rading

book on Friday.
Business & Finance Writing Winter 2010 4
 Nouns
Importance
Forty billion yen in bonds were sold

today by Nippon Steel Corp.



Nippon St eel Corp. sold 40 billion yen

in 10-year bonds t oday.

Business & Finance Writing Winter 2010 5

 Make it concrete
Concrete
  Abstract
 

rain weather
debt leverage

money funds

compatible synergistic

borrowing costs interest rates

low price cheap

Business & Finance Writing Winter 2010 6

 Make it specific
l Vague l Specific
l Financial health l Creditworthiness
lA lot l The most in 10
l Fast years
l Top industrial l 300 kph
stocks l Nippon Steel, IHI,
l Komatsu and
their rivals
l
l Sales tripled in two
 Growth industry years.
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 Concrete makes it simple,
specific
l Poorweather may affect rice
farmers’ earnings and leverage.
lLess-t han-usual rain m ay reduce
farm ers’ profit and force t hem t o
borrow m ore m oney.

Business & Finance Writing Winter 2010 8

 Make it simple
l Simple Com plicat ed
l stocks Equit y
l Bonds invest m ent s
Fixed incom e
l Faster
Increased rat e of
l Arrested speed
l t aken int o police
l agreed cust ody
Concluded an
agreem ent
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 Make it familiar

l Familiar l Unfamiliar
l Profit l Retained earnings
l Storm l Weather event
l Skills l Career
l Central bank development
l Salary and benefits l Monetary authority

l Think l Remuneration

l Write l Cogitate
l Compose
l
Business & Finance Writing Winter 2010 10
 Homework
l Write a 200-word story on a financial topic of your
choice. Focus on using active verbs, nouns and
concrete language.
l The point is to see the link between word
choice and sentence structure. By relying on
active verbs and concrete language to convey
the information, we are forced to write clearer,
more effective sentences.
l Don’t worry about content, per se. You can
even make up the facts of the story, or take
them from an analyst report or data in a
newspaper or financial Web site. The point is
to choose theBusiness
right words and right structure. 11
& Finance Writing Winter 2010
Bankers versus Consultants

Business & Finance Writing Winter 2010 12

 Building blocks of story
l Dramatic structure
--What, why
--Evidence
--Why we should care
--What may happen in the future

Business & Finance Writing Winter 2010 13

 Prosecutors sought three years in prison and a ¥30
million fine Wednesday in a Tokyo District Court trial session for a
former defense consultant charged with evading some ¥99 million
in income taxes. 
 Naoki Akiyama, 60, former executive director of the Japan-
U.S. Center for Peace and Cultural Exchange, made use of his
position to exert influence on the selection of contractors for a
government project to dispose of abandoned chemical weapons in
China, prosecutors said.
 The defendant evaded taxes on payments from companies
that Akiyama recommended to the then-Defense Agency and
other official bodies, they said. 
 The companies he recommended include defense equipment
trading firm Yamada Corp., Kobe Steel Ltd. and Hitachi Ltd. 
 Akiyama hid some ¥314 million in consulting fees from four
companies over four years to 2006, according to prosecutors.
 He has pleaded not guilty to tax evasion but admitted to a
charge of document falsification in a case unrelated to tax
evasion. 
 Akiyama was well connected to politicians and defense
contractors both in Japan and the United States.” 
Business & Finance Writing Winter 2010 14


l Thin on background information.
l Reader forced to assume “consulting
fees” were, in fact, bribes and,
thus, had to be hidden from tax
officials and there’s no mention
that the “abandoned chemical
weapons in China” were left in
China by the Imperial Japanese
Army in 1945.
l
l

Business & Finance Writing Winter 2010 15

l Akiyama is the most senior member
of the administration to be indicted
in a corruption case.
l (You must read this because it is
evidence that the entire
administration may be corrupt and
may lose votes.)
l Akiyama is the third senior
administration official to be
indicted in a corruption case.

Business & Finance Writing Winter 2010 16

l Kobe Steel and Hitachi are the two
biggest providers of defense
equipment to the government.
Akiyama’s indictment is the first
time the companies have
cooperated with prosecutors in a
corruption case.
l (The case may affect the
government’s defense
procurement. The case shows a
change in the way companies are
behaving.
Business & Finance Writing Winter 2010 17
l President Barack Obama was expected Thursday to propose giving bank
regulators the power to limit the size of America’s largest banks and the scope of
their risk-taking activities, an administrative official said.
l The President, for the first time, would be throwing his weight publicly behind that
approach and presumably asking that it be included in legislation now in
Congress dealing with financial regulation.
l He would prohibit proprietary trading of financial securities by commercial banks,
including mortgage-backed securities. Big losses in the trading of those securities
precipitated the credit crisis of 2008 and the federal bailout.
l   The president was scheduled to speak at an appearance at the White House with
Treasury Secretary Timothy F. Geithner, an administration official who asked not
to be identified said Wednesday. The proposal was to come after a meeting with
Paul A. Volcker, the former Federal Reserve Board Chairman, who as the
chairman of the president’s Economic Recovery Advisory Board has been
campaigning for months for legislation that would separate commercial banking
from proprietary trading. A similar discussion is percolating in Europe, led by
Mervyn A. King, head of the Bank of England.
l   The president’s announcement would be the third time in a week for his weighing
in on the battle hearing up in Congress over tightening regulation of financial
institutions to avoid the sort of abuses that contributed to the near meltdown on
Wall Street.
l   Last week, he proposed a new tax on about 50 of the largest banks to raise
enough money to recover the losses from the financial bailout, which ultimately
could cost $117 billion. This week, he served notice to senior lawmakers that he
wanted an independent agency to protect consumers as part of any financial
overhaul legislation.
l
Business & Finance Writing Winter 2010 18
l The proposal represents the Obama administration’s first attempt
to directly limit the amount of risk financial institutions can
take and may curtail or even eliminate some types of trading
that helped foment the financial crisis of 2007-2008.
l (You need to read this because it is the biggest effort so far to
prevent another financial collapse.)
l
l Banking industry leaders have vowed to oppose the proposal,
saying it would make the nation’s financial industry less
competitive with banks based outside the country without
achieving a meaningful reduction in risk. Republican Senator
Joe Lieberman said he would fight “to the end” to prevent
legislation that would “slowly, but surely destroy America’s
financial system from within.’’
l (You need to read this because it may be a threat to the country’s
financial system and economy and is likely to cause a major
political battle.)
l
l

Business & Finance Writing Winter 2010 19

l From story about JAL bankruptcy:
l Under the government-supported rescue plan, creditors will be asked to forgive
Y730bn in debt, the airline will withdraw from 31 unprofitable routes and dispose
of non-core subsidiaries and other assets.
l
l
l The decision to cut only 31 routes prompted analysts and investors to speculate
that the government is not prepared to make the larger-scale cuts needed to
return the airline to profitability.
l
l The decision to slash 31 routes suggests the government is prepared to make the
kind of cost cuts needed to return the airline to profit, analysts and investors said.
l
l JAL’s failure as Japan’s government-controlled airline poses the first major test of
Prime Minister Yukio Hatoyama’s promise to shift political power away from the
nation’s bureaucrats, boost transparency and hold government appointees more
accountable for failure.
l
l
l
l  
l print)
l  
l

Business & Finance Writing Winter 2010 20

From story about retail sales results:


l But in the days after the storms, consumers flocked to stores, enabling
retailers to recover some lost sales. In fact, post-storm shopping helped
the day after Christmas — which is typically the third-best performing
day of the season — ascend to the number No. 2 spot this year.
ShopperTrak said consumers spent $7.9 billion on Dec. 26, up from $7.8
billion last year. Sales the Saturday before Christmas, the third-biggest
day this season, were $6.9 billion
l
 The increase on the day after Christmas shows price cuts at retailers
were effective in boosting sales, a sign consumers are still willing and able
to spend for discounted merchandise.

Business & Finance Writing Winter 2010 21

 poison pill
l Describes a range of tactics used by public
companies to avoid a hostile takeover.
l One example is the issuance of a preferred
stock that gives shareholders the right to
redeem their shares at a premium after the
takeover.
A strategy used by corporations to
discourage a hostile takeover by another
company. The target company attempts to
make its stock less attractive to the acquirer.
There are two types of poison pills:
A "flip-in" allows existing shareholders
(except the acquirer) to buy more shares at a
discount.
The "flip-over"
Business & allows stockholders
Finance Writing Winter 2010 to buy 22
the acquirer's shares at a discounted price after
 due diligence
Com m erzbank AG, Landesbank Baden-
l Offers to purchase an asset are
Wuert t em berg and DSGV, t he savings banks associat ion, handed in
offers for Landesbank Berlin Holding AG, t he biggest lender in
usually dependent on the results of
t he Germ an capit al, said t hree people w it h knowledge of t he sale.
The t hree banks m et t oday's deadline aft er conduct ing due
due
diligence, according t o t he people, w ho did not give det ails and
declined t o be ident ified because t he bids are not yet public.
diligence analysis. This includes
reviewing all financial records plus
anything
else deemed material to the sale.

Business & Finance Writing Winter 2010 23

 Private equity
l Private equity
   Equity
Perm ira, which said it capital that
expect s t he offer t o stis
art made
by July
available toe-equit
companies orino follows
and be com plet ed by Sept em ber, is act ing t hrough it s Red & Black
Lux SARL unit . The privat y int erest in Valent
investors,
TowerBrook but
Capit al Part ners
Lt d. in February.
LP'snot
t akeover of shoem aker Jim m y Choo

quoted on a stock market. The

funds raised through private equity
can be used to develop new
products and technologies, to
expand working capital, to make
acquisitions, or to strengthen a
Business & Finance Writing Winter 2010 24

company's balance sheet.

 goodwill
l Goodwill
The com pany booked abt out 1.1 t rillion yen ($9.4 billion) in
An account
goodwill, or t he am that
ount itcan
paid be found
above t he min the
arket assets
value of
portion
Vodafone ofnet
K.K.'s a company's
asset s, from it sbalance
purchase in sheet. Goodwill
April, t he
can
Nikkei often report
Financial ariseed,when
cit ing one
Kazukocompany is bank's
Kim iw ada, Soft
purchased
account by Soft
ing m anager. another company.
bank bought VodafoneIn for 1.8 t rillion yen.
an acquisition, the amount paid for the
company over book value usually accounts for
the target firm's intangible assets.  Goodwill is
seen as an intangible
asset on the balance sheet because it is not a
physical asset such as buildings and
equipment. Goodwill typically reflects the value
of intangible assets such
as a strong brand name, good customer
relations, good employee
Business relations
& Finance Writing Winter 2010 and any 25

patents or proprietary technology.

 Greenmail
l A spin-off of the term "blackmail", greenmail occurs when a large
block of stock is held by an unfriendly company or raider, who
then forces the target company to repurchase the stock at a
substantial premium to destroy any takeover attempt.
   Nippon Steel Corp.'s poison-pill clauses favor management
with few outside checks on its power, the Financial Times said
today in its ``Lex'' column.
    The ``U.S.-style'' defenses are becoming more common in
Japan after the government allowed them last year, the
newspaper said.
    At Nippon Steel, four kinds of bidders, including greenmailers
and
asset-strippers, can be rejected without a shareholder vote, the
newspaper said.
 The defense itself was implemented without stockholder
approval, the column said.
    Many Japanese ``poison pills'' will ``jeopardize'' a company's
ability to act efficiently, the Lex column said.
    Nippon Steel said yesterday it will work with two of its
competitors to stop hostile takeover bids.

Business & Finance Writing Winter 2010 26

 Private equity


   Equity capital that is made available to

companies or investors, but not
quoted on a stock market. The funds
raised through private equity can be used
to
 develop new products and technologies,
to expand working capital, to make
acquisitions, or to strengthen a company's
balance sheet.

Business & Finance Writing Winter 2010 27

 Book value
l
The accounting value of a firm. It has two main
uses:
1. It is the total value of the company's assets
that shareholders would
theoretically receive if a company were
liquidated.

2. By being compared to the company's market

value, the book value can indicate
whether a stock is under- or overpriced.

Business & Finance Writing Winter 2010 28

 Takeover bid


When an acquiring company makes

an offer to the target company's
shareholders to buy the target
company's shares in order to gain
control of the business.
Takeover bids can either be friendly
or hostile.

Business & Finance Writing Winter 2010 29

 Leveraged buyout
l Takeover of a company or controlling
interest in a company using a
significant
amount of borrowed money,
usually 70 percent or more of the
total purchase
price.

Business & Finance Writing Winter 2010 30

 Discount
l The amount below the market price
by which a shareholder is willing to
sell his
stock, or an investor is willing to
offer for it.

Business & Finance Writing Winter 2010 31

 Premium
 The amount above the market price
by which a shareholder is willing to
sell his
stock, or an investor is willing to offer
for it.

Business & Finance Writing Winter 2010 32

Business & Finance Writing Winter 2010 33