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This essay reviews the contents of the Financial Times newspaper over the period of one week in August 2005, and examines the sources of information alluded to by commentators in relation to company performance.

The analysis has shown that the London based Financial Times newspaper sources its data from a wide variety of sources, and cites information from a number of different and varied city institutions. However, the paper appears to be generally non-specific in its articles when identifying its various sources and commentators, presumably due to press confidentiality constraints.

This often makes the information appear to be sourced directly from the paper itself, although in many instances these further sources are alluded to. In relation to specific company performance, and the raw data used in the articles, much of this is uncited and presumably drawn from published company accounts or specialist providers of company information.

In undertaking this analysis, the variety of information used and the 'sophistication' of the analysis undertaken by the Financial Times, has been considered using the following criteria:

• Whether there is any discernable bias present and its potential affect on the article. This makes it important to consider the author's motives, and the key question they are seeking to address.
• What type of data and information has been used by the journalists in reaching their conclusions
• The degree of sensitivity to other viewpoints and counter arguments

The analysis has shown that the Financial Times appears to offer a reasonably high degree of sophistication in its analysis of company performance. It often provides the reader with background information relating to how problems or situations have arisen, followed by a statistical analysis of where this now leaves the company from a financial perspective.

An example of this type of analysis was seen in the August 23rd edition of the paper, which contained a two page article examining the problems facing the company Rentokil. The article looked both at the background of Sir Gerry Robinson, who's seen as a potential trouble-shooter, followed by an analysis of the company's financial situation, with the data for this article was sourced from the third party data provider Thomson DataStream. The analysis of Sir Gerry presented a light hearted view of the man as an individual, and emphasised his corporate successes. The financial analysis of Rentokil offered a more sophisticated breakdown of the company performance, including total return indices relative to the FTSE 100, and graphs showing the operating profit by business in 2004. It also shows trends in turnover and pre-tax profit from 2000.

The use of specialist financial data has seen throughout the articles reviewed, and this is unsurprising giving the paper's target audience and its positioning as a financial commentator.

In an earlier article on August 21st about the possibility of a Rentokil takeover, there is further use of undisclosed sources: 'one analyst expressed surprise that some Rentokil shareholders had started to think about replacing the management before listening to any defined strategy'. There is no indication of who this analyst is or where they are from.

A further example of this can be seen in the August 23rd article 'Inmarsat profits up as tsunami fuels demand', which contained non specified comments that 'analysts also believe that Inmarsat could be in a position to be part of a coast to coast mobile service in the US'.

The information in articles was often sourced through direct interviews with senior members of the companies concerned. For example, in the article entitled BA caterer sets deadline for deal or collapse on August 21st 2005, the information was gathered directly from Eric Born, the UK managing director of Gate Gourmet. This article also used information from the US ratings agency 'Standard and Poor's' to highlight the company's precarious position, stating that 'its credit rating was reduced to D, the lowest junk rating. It is assumed that the reader is sophisticated enough in their financial knowledge to understand the implications of such a rating without the need for further explanation.

Another source of information identified by the research was polling companies such as MORI, whose data was used as the background to articles, and to back up commentators arguments. For example, the August 21st article entitled 'Investors order private opinion polls on companies', explored how MORI had tracked 'the changing levels of customer favourability displayed towards Tesco, J Sainsbury, Vodafone, British Airways and Marks & Spencer'. This article reported the facts of MORI's findings, with little comment beyond these findings, and without seeking to identify or correct any potential bias alluded to in the findings.

The trend towards unbiased commentary is seen throughout the articles examined, with a concentration on presentation of facts and commentary by interested parties. It is generally clear to the reader, where issues of bias by interview parties may exist, although the articles do not attempt to counterbalance or highlight this potential bias. This is in accordance with the often personal views expressed, although many of these views are cited from individuals who are presented as reliable and authoritative commentators. For example, the comments included in an article on August 17th entitled 'Nestle delivers sweater than forecast sales' from David Lang of Investec, who stated that 'these are pretty solid results, although the ten basis point rise in margin is not very exciting'. Once again, this use of technical language is expected to be readily understood by the reader, and the rest of the article continues in similar vain offering a reasonably sophisticated breakdown of individual market segment growth.

Another example can be found in the August 19th article 'Thorntons in £123m offer talks'. In this article an analyst at Seymour Pierce is used to present his opinion that the offer being discussed represented a fair price, without any justification as to why this position has been reached. The FT makes extensive use of commentary from investment houses and financial analysts. One such example is taken from an article on August 22nd entitled 'Candover sells Swissport to Ferrovial for 646m Euros'. In this article Tomas Pintoe, an analyst at Kepler Equities was used to comment on potential synergies within Ferrovial's assets. This article is also interesting because it uses three separate journalists, based in London, Zurich and Madrid respectively. It also quotes the sources of the company's investment advice in Geneva, London and Spain respectively.

In general, despite the information and commentary within articles not being subject to any correction of bias, there were some articles in which the author drew attention to possible counter arguments where statements had been made by potentially biased parties. For example, in the August 22nd article 'Bidders make a mad dash for supermarket chains', an article exploring the apparent increase in interest in supermarket property. This article contains commentary from various estate agents, and data sourced from Knight Frank. Since Knight Frank is an estate agent, the article drew attention to the counter argument that the trends identified and the views expressed were not all positive from an investment perspective.

Much of the data used throughout the FT's company performance section is sourced directly from press releases and annual/interim accounts from the companies being featured. The later trend analysis is then built by using third party data providers such as Thompson DataStream. The combination of third party investor analysis, company sourced data, information rich interviews, third party data providers and the Financial Times' own data provision, provides a vast sea of information in the public domain. Whilst much of this information contains an element of bias, the methods through which the Financial Times analyses and presents the information, generally allows for a useful and multi - angled analysis. However, in many instances the sophistication and expected financial literacy of the target audience can hide sources of potential bias from those less familiar with the foundation of calculations, or the backgrounds of those presenting commentary.

In conclusion, the research has found that the Financial Times contains a huge variety of different sources of information with respect to company performance. In most cases this information is presented in a clear and useful format, and adds greater depth to the stories contained within the article. However, the analysis has also found that in order to make the best use of this information, and to identify potential areas of bias, the degree of sophistication often requires the reader to possess a good knowledge of financial analysis.

Bibliography

Financial Times, August 21st 2005, BA caterer sets deadline for deal or collapse by Kevin Done, Aerospace Correspondent

Financial Times, August 23rd 2005, News of possible approach sends Rentokil shares racing ahead by Philip Staffordand Robert Orr

Financial Times, August 21st 2005, Rentokil shares leap as Robinson considers bid by Lisa Urquhart

Financial Times, August 22nd, Candover sells Swissport to Ferrovial for 646m Euros by Mary Watkins in London, Haig Simonian in Zurich and Mark Mulligan in Madrid

Financial Times, August 21st, Investors order private opinion polls on companies by Sundeep Tucker, investment correspondent

Financial Times, August 17th 2005, Nestle delivers sweeter than forecast sales by Lucy Killgren in London

Financial Times, August 22nd 2005, Bidders make a mad dash for supermarket chains by Jim Pickard

Financial Times, August 23rd 2005, WH Smith sees profits in line with forecasts by Mary Watkins in London

Financial Times, August 19th 2005, Thorntons in £123m offer talks by Elizabeth Rigby, retail correspondent

Financial Times, August 23rd 2005, Inmarsat profits up as tsunami fuels demand by Lucy Killgren in London

Financial Times, August 17th 2005, HP up 13% on better figures by Scott Morrison in San Francisco

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