Centre for Civic Education (CCE) and SHARE Foundation have publicised a Journalism guide for an adequate understanding of financial reports, which is intended for journalists but it can be useful to all those who want to better understand this issue although they do not have developed knowledge in finances.
The informed public is of great importance for society, and in that context, improvement of journalists’ financial literacy plays an important role. By analysing the financial statements of companies and drawing objective conclusions, journalists can contribute to better informing of citizens of Montenegro.
A growing number of accounting rules and disclosure requirements have made financial statements rather complex documents useful for understanding the current economic status of a particular company. At the same time, there is a large number of those who have a problem with “decoding” such documents. They are not familiar to many terms while interpreting them is difficult for anyone who is not financially literate. Financial reports, with all their components, are mostly done in an expert language that is unfamiliar to the ordinary person. For journalists who lack formal training in finance or accounting, this type of statement is difficult to read and understand, therefore, they often and quickly give up on potentially interesting issues that may be of public interest.
The publication contains guidelines on how to monitor cash flow by reading the balance sheet and income statement, as well as cash flow statements, but also how to conduct an initial evaluation and perform ratio analysis. Part of the guide also provides advice on which web sites and databases journalists can explore, and in particular points to the strength of the arguments that journalists have when using official data.
Bearing in mind that there are media that do their job in the languages of minority people, the Guide will also soon be translated into the Albanian language.
A Journalism guide for an adequate understanding of financial reports was published within the framework of the project “Support to local media – first-hand stories! Support to investigative journalism and media literacy at the local level in Montenegro” conducted by B film Montenegro, CCE, SHARE Foundation and Institute for Business and Financial Literacy. The project is funded by the EU via Delegation of the European Union to Montenegro and co-financed by the Ministry of Public Administration of the Government of Montenegro.
Damir NIKOCEVIC, Development Coordinator