Financial statement analysis

Financial statement analysis (or financial analysis) refers to an assessment of the viability, stability and profitability of a business, sub-business or project.

It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. Based on these reports, management may:

Continue or discontinue its main operation or part of its business;

Make or purchase certain materials in the manufacture of its product;

Acquire or rent/lease certain machineries and equipment in the production of its goods;

Issue stocks or negotiate for a bank loan to increase its working capital;

Make decisions regarding investing or lending capital;

Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.

Goals

Financial analysts often assess the firm's:

1. Profitability - its ability to earn income and sustain growth in both short-term and long-term. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations;

2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term;

3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate obligations;

Both 2 and 3 are based on the company's balance sheet, which indicates the financial condition of a business as of a given point in time.

4. Stability- the firm's ability to remain in business in the long run, without having to sustain significant losses in the conduct of its business. Assessing a company's stability requires the use of both the income statement and the balance sheet, as well as other financial and non-financial indicators.

Methods

Financial analysts often compare financial ratios (of solvency, profitability, growth, etc.):

Past Performance - Across historical time periods for the same firm (the last 5 years for example),

Future Performance - Using historical figures and certain mathematical and statistical techniques, including present and future values, This extrapolation method is the main source of errors in financial analysis as past statistics can be poor predictors of future prospects.

Comparative Performance - Comparison between similar firms.

These ratios are calculated by dividing a (group of) account balance(s), taken from the balance sheet and / or the income statement, by another, for example :

n / equity =ROE

Net income / total assets = return on assets

Stock price / earnings per share = P/E-ratio

Comparing financial ratios is merely one way of conducting financial analysis. Financial ratios face several theoretical challenges:

They say little about the firm's prospects in an absolute sense. Their insights about relative performance require a reference point from other time periods or similar firms.

One ratio holds little meaning. As indicators, ratios can be logically interpreted in at least two ways. One can partially overcome this problem by combining several related ratios to paint a more comprehensive picture of the firm's performance.

Seasonal factors may prevent year-end values from being representative. A ratio's values may be distorted as account balances change from the beginning to the end of an accounting period. Use average values for such accounts whenever possible.

Financial ratios are no more objective than the accounting methods employed. Changes in accounting policies or choices can yield drastically different ratio values.

They fail to account for exogenous factors like investor behavior that are not based upon economic fundamentals of the firm or the general economy (fundamental analysis) .

Financial analysts can also use percentage analysis which involves reducing a series of figures as a percentage of some base amount. For example, a group of items can be expressed as a percentage of net income. When proportionate changes in the same figure over a given time period expressed as a percentage is known as horizontal analysis. Vertical or common-size analysis, reduces all items on a statement to a “common size” as a percentage of some base value which assists in comparability with other companies of different sizes .

Another method is comparative analysis. This provides a better way to determine trends. Comparative analysis presents the same information for two or more time periods and is presented side-by-side to allow for easy analysis.

See also

Fundamental analysis

Business valuation

(source:wikipedia)

Fundamental analysis

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis. The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis.

Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:

to conduct a company stock valuation and predict its probable price evolution,

to make a projection on its business performance,

to evaluate its management and make internal business decisions,

to calculate its credit risk.

Two analytical models

When the objective of the analysis is to determine what stock to buy and at what price, there are two basic methodologies

Fundamental analysis maintains that markets may misprice a security in the short run but that the "correct" price will eventually be reached. Profits can be made by trading the mispriced security and then waiting for the market to recognize its "mistake" and reprice the security.

Technical analysis maintains that all information is reflected already in the stock price. Trends 'are your friend' and sentiment changes predate and predict trend changes. Investors' emotional responses to price movements lead to recognizable price chart patterns. Technical analysis does not care what the 'value' of a stock is. Their price predictions are only extrapolations from historical price patterns.

Investors can use any or all of these different but somewhat complementary methods for stock picking. For example many fundamental investors use technicals for deciding entry and exit points. Many technical investors use fundamentals to limit their universe of possible stock to 'good' companies.

The choice of stock analysis is determined by the investor's belief in the different paradigms for "how the stock market works". See the discussions at efficient-market hypothesis, random walk hypothesis, capital asset pricing model, Fed model Theory of Equity Valuation, Market-based valuation, and Behavioral finance.

Fundamental analysis includes:

Economic analysis

Industry analysis

Company analysis

On the basis of these three analyses the intrinsic value of the shares are determined. This is considered as the true value of the share. If the intrinsic value is higher than the market price it is recommended to buy the share . If it is equal to market price hold the share and if it is less than the market price sell the shares.

Use by different portfolio styles

Investors may use fundamental analysis within different portfolio management styles.

Buy and hold investors believe that latching onto good businesses allows the investor's asset to grow with the business. Fundamental analysis lets them find 'good' companies, so they lower their risk and probability of wipe-out.

Managers may use fundamental analysis to correctly value 'good' and 'bad' companies. Eventually 'bad' companies' stock goes up and down, creating opportunities for profits.

Managers may also consider the economic cycle in determining whether conditions are 'right' to buy fundamentally suitable companies.

Contrarian investors distinguish "in the short run, the market is a voting machine, not a weighing machine". Fundamental analysis allows you to make your own decision on value, and ignore the market.

Value investors restrict their attention to under-valued companies, believing that 'it's hard to fall out of a ditch'. The value comes from fundamental analysis.

Managers may use fundamental analysis to determine future growth rates for buying high priced growth stocks.

Managers may also include fundamental factors along with technical factors into computer models (quantitative analysis).

Top-down and bottom-up

Investors can use either a top-down or bottom-up approach.

The top-down investor starts his analysis with global economics, including both international and national economic indicators, such as GDP growth rates, inflation, interest rates, exchange rates, productivity, and energy prices. He narrows his search down to regional/industry analysis of total sales, price levels, the effects of competing products, foreign competition, and entry or exit from the industry. Only then he narrows his search to the best business in that area.

The bottom-up investor starts with specific businesses, regardless of their industry/region.

Procedures

The analysis of a business' health starts with financial statement analysis that includes ratios. It looks at dividends paid, operating cash flow, new equity issues and capital financing. The earnings estimates and growth rate projections published widely by Thomson Reuters and others can be considered either 'fundamental' (they are facts) or 'technical' (they are investor sentiment) based on your perception of their validity.

The determined growth rates (of income and cash) and risk levels (to determine the discount rate) are used in various valuation models. The foremost is the discounted cash flow model, which calculates the present value of the future

dividends received by the investor, along with the eventual sale price. (Gordon model)

earnings of the company, or

cash flows of the company.

The amount of debt is also a major consideration in determining a company's health. It can be quickly assessed using the debt to equity ratio and the current ratio (current assets/current liabilities).

The simple model commonly used is the Price/Earnings ratio. Implicit in this model of a perpetual annuity (Time value of money) is that the 'flip' of the P/E is the discount rate appropriate to the risk of the business. The multiple accepted is adjusted for expected growth (that is not built into the model).

Growth estimates are incorporated into the PEG ratio, but the math does not hold up to analysis.[citation needed] Its validity depends on the length of time you think the growth will continue. IGAR models can be used to impute expected changes in growth from current P/E and historical growth rates for the stocks relative to a comparison index.

Computer modelling of stock prices has now replaced much of the subjective interpretation of fundamental data (along with technical data) in the industry. Since about year 2000, with the power of computers to crunch vast quantities of data, a new career has been invented. At some funds (called Quant Funds) the manager's decisions have been replaced by proprietary mathematical models.

Criticisms

Economists such as Burton Malkiel suggest that neither fundamental analysis nor technical analysis is useful in outperforming the markets.

(source;wikipedia)

Government revenue

Government revenue is revenue received by a government. Its opposite is government spending. Government revenue is an important part of fiscal policy.

Revenue may be from various taxes or non-tax revenue (such as revenue from government-owned corporations or sovereign wealth funds).

Revenue Collections for December Up over Last Year

Gov. Bob McDonnell announced Thursday that December revenue collections increased by 9.5 percent over the prior year when adjusted for the December 2009 one-time tax amnesty program.

This is the ninth month out of the last ten in which state revenue collections exceeded the previous year’s amount. It is the second month in a row in which year over year revenue growth was greater than nine percent.

The revenue increase was primarily driven by withholding (+3.9 percent), corporate income (+3.4 percent) and sales tax (+8.6 percent - adjusted for tax amnesty) collections. Adjusted for the accelerated sales tax program, total state revenues grew 4.1 percent through December, slightly lagging the economic-base forecast of 5.2 percent growth.

Because a number of factors can influence the flow of payments and monthly growth rates this time of the year, December and January receipts must be considered together to get a clearer picture of revenue growth.

Speaking about the latest revenue report, McDonnell notes, “In a tough economy we are beginning to see real signs of progress and recovery. We have added 67,900 net new jobs in the Commonwealth since last February, the third greatest amount nationally.

"We have just posted two months of back to back nine-percent revenue growth, in the midst of a string of nine out of the last ten months featuring increases in state revenue. These are positive demonstrations of economic progress.

"However, this is still a difficult and uncertain economy. Over 280,000 Virginians are still unemployed. Clearly there is much more work to be done before all Virginians can find the good work they deserve. That is why we are focused this session of the General Assembly on utilizing savings and reprioritizations in our state budget to invest in job-creating core functions of government like higher education, economic development, transportation and government reform.

"Progress is being made, but we still have a long ways to go before economic prosperity and vitality have truly returned to every corner of the Commonwealth.”

CNN's Larry King exits after 25 years

Larry King 

Profile Facts-NEW YORK — Two presidents, four television news anchors and a 10-year-old son who looked ready to take dad's place behind the microphone turned out to bid Larry King farewell as he pulled the curtain down on his CNN talk show Thursday after 25 years.

King, 77, was serenaded by Tony Bennett singing "The Best is Yet to Come" via remote from Louisiana.

King had announced this summer he would leave, ushered out by a struggling network. Once the dominant voice in cable television news, King has faded in a sea of sharp talkers. British talk-show host and "America's Got Talent" judge Piers Morgan takes over the 9 p.m. Eastern time slot in January.

"You're not going to see me go away, but you're not going to see me on this set anymore," King said. "I don't know what to say except to you, my audience, thank you, and instead of goodbye, how about so long?"

Except for an agreement to host four specials a year at CNN, it's not clear what his work future holds. He's talked of doing comedy, or going back to some radio work.

A parade of guests stopped by, including news anchors Katie Couric, Diane Sawyer, Barbara Walters and Brian Williams, who were in CNN's New York studio. President Barack Obama delivered a taped message, and former President Bill Clinton made his 29th appearance on the show, via remote from Little Rock, Ark.

"You say that all you do is ask questions," Obama said. "But for generations of Americans, the answers to these questions have surprised us, they've informed us, and they've opened our eyes to the world beyond our living rooms."

California Gov. Arnold Schwarzenegger appeared to thank King for moving his show from Washington to Los Angeles, and to declare it "Larry King Day" in his state.

King's wife Shawn and sons Chance and Cannon appeared on set. Chance, in particular, injected some levity with a dead-on impersonation of his father, including the Brooklyn accent.

King has conducted some 50,000 interviews in a broadcasting career where he worked for decades in radio before joining CNN in 1985. He's recorded more than 6,000 shows for CNN.

Before Fox News Channel and MSNBC even existed, King was cable news' top-rated program. Politicians, entertainers, leaders of industry and the faces of news stories hot in the moment all sat across the table from King. Some critics said he often seemed ill-prepared and tossed softballs, while King described his style as "minimalist," with the goal of getting his guests to talk.

Fred Armisen of "Saturday Night Live" delivered a King impersonation — Larry interviewing Larry — dressed in the same bright red suspenders and polka dot tie. Armisen's "Larry" asked what question King had asked more than any other. King replied: "Why?"

"The best question of all is 'why?' because it can't be answered in one word and it forces people to think," he said.

On the bottom of the screen, CNN ran messages from friends and celebrities like, "Jenny McCarthy: I'll miss your sexy ass."

Despite the evident warmth, there were some cringe-worthy moments that indicated the time was right for King to exit.

Regis Philbin appeared and sang two lines of a song, expecting King to pick up on it and join him, but King was stumped. Dr. Phil was cut off, almost in mid-sentence, because King said time was too short. The Clinton interview was marred with uncomfortable silences and talk-overs because there was a brief delay in what King said and what Clinton could hear.

King referred to Clinton, without explanation, as a fellow member of the "zipper club," and the control room had to prevail upon the host to explain a few minutes later that it was a reference to the fact both men had undergone open heart surgery.

"I'm glad you clarified that!" Clinton said to King, who has had seven wives.

King was joined at his table by Ryan Seacrest and Bill Maher, who have both filled in for King during breaks in the past. Maher tried not to let the show quickly become maudlin.

"This is not Larry's funeral," he said. "He's hopefully going to be in our living rooms for a lot of years to come. This is the end of a show, not the end of a man."

Rival MSNBC saluted King by buying an ad in USA Today on Thursday, calling King "one of a kind." ''Larry, thank you for everything you've done to advance cable news," the ad read.

Others were less nostalgic: The Los Angeles Times website posted videos of King's most embarrassing moments, including when he asked an incredulous Jerry Seinfeld whether NBC had canceled his top-rated comedy.

It's been a muted exit for King, with CNN touting Morgan's upcoming show in ads more than King's. Even as the end neared, King finished fourth in his time slot for Tuesday's interview with the Judds, behind Fox News Channel's Sean Hannity, MSNBC's Rachel Maddow and CNN sister network HLN's Joy Behar. King interviewed Barbra Streisand on Wednesday night.

CNN is owned by Time Warner.

(source:afp)

Reuters

Reuters Group Limited, Reuters Group PLC (2008), now a subsidiary of Canadian corporation Thomson Reuters (2008) ( /ˈrɔɪtərz/) is a United Kingdom-based news service and former financial market data provider that provides news reports from around the world to news media. News reporting once accounted for less than 10% of the company's income. Its main focus was on supplying the financial markets with information and trading products. These included market data, research and analytics, as well as computer-based trading systems. Among other services, the most notable was analysis of 40,000 companies, debt instruments, and 3 million economic series. Competitors included Bloomberg L.P. and Dow Jones Newswires.

History

 Beginnings

The 23 November 1878 Reuters Telegram telling of the Battle of Ali Masjid.

Reuters Docklands Technical Centre, London

Paul Julius Reuter noticed that, with the electric telegraph, news no longer required days or weeks to travel long distances. In 1850, the 34-year-old Reuter was based in Aachen — then in the Kingdom of Prussia, now in Germany — close to the borders with the Netherlands and Belgium. He began using the newly opened Berlin–Aachen telegraph line to send news to Berlin. However, there was a 76-mile (122 km) gap in the line between Aachen and Brussels, Belgium's capital city and financial center. Reuter saw an opportunity to speed up news service between Brussels and Berlin by using homing pigeons to bridge that gap.

In 1851, Reuter moved to London. After failures in 1847 and 1850, attempts by the Submarine Telegraph Company to lay an undersea telegraph cable across the English Channel, from Dover to Calais, promised success. Reuter set up his "Submarine Telegraph" office in October 1851 just before the opening of that undersea cable in November, and he negotiated a contract with the London Stock Exchange to provide stock prices from exchanges in continental Europe in return for access to the London prices, which he then supplied to stockbrokers in Paris. In 1865, Reuter's private firm was restructured, and it became a limited company (a corporation) called the Reuter's Telegram Company. Reuter had been naturalised as a British subject in 1857.

Reuter's agency built a reputation in Europe for being the first to report news scoops from abroad, such as Abraham Lincoln’s assassination. Almost every major news outlet in the world now subscribes to Reuters' services, which operates in over 200 cities in 94 countries in about 20 languages.

The last surviving member of the Reuters family founders, Marguerite, Baroness de Reuter, died at age 96 on 25 January 2009, after having suffered a series of strokes.

Initial public offering (IPO)

Reuters was financed as a public company in 1984 on the London Stock Exchange and on the NASDAQ in the United States. However, there were concerns that the company's tradition for objective reporting might be jeopardised if control of the company later fell into the hands of a single shareholder. To counter that possibility, the constitution of the company at the time of the stock offering included a rule that no individual was allowed to own more than 15% of the company. If this limit is exceeded, the directors can order the shareholder to reduce the holding to less than 15%. That rule was applied in the late 1980s when Rupert Murdoch's News Corporation, which already held around 15% of Reuters, bought an Australian news company that also owned stock in Reuters. Murdoch was subsequently compelled to reduce his holdings to less than 15%.

Further protecting Reuters from owner actions that might threaten its independence is Reuters Founders Share Company Limited, formed in 1984 as part of the share float. This company's stated mission is to protect the integrity of the company's news output. It holds one "Founders Share," which can veto all other shares if an attempt is made to alter any of the rules relating to the Reuters Trust Principles. These principles set out the company's aims of independence, integrity, and freedom from bias in its news reporting. Subsequent to the forming of Thomson Reuters the trust principles continued, with the RFSC now holding a Founders Share in each of Thomson Reuters Corporation and Thomson Reuters PLC.

Post-IPO Expansion

Reuters grew rapidly after its 1984 IPO, widening the range of its business products and global reporting network for media, financial and economic services. In 1988, Reuters formed a joint-venture with the Chicago Mercantile Exchange to build an automated futures trading system named "Globex" at a cost of over USD$100 million. Key product launches include Equities 2000 (1987), Dealing 2000-2 (1992), Business Briefing (1994), Reuters Television for the financial markets (1994), 3000 Series (1996) and the Reuters 3000 Xtra service (1999). In the mid-1990s, the Reuters company engaged in a brief foray in the radio sector — with London Radio's two radio stations, London News 97.3 FM and London News Talk 1152 AM. A Reuters Radio News service was also set up to compete with the Independent Radio News. In 1995, Reuters established its "Greenhouse Fund" to take minority investments in start-up technology companies, initially in the USA, only. In October 2007, Reuters Market Light, a division of Reuters, launched a mobile phone service for Indian farmers to provide local and customised commodity pricing information, news, and weather updates.

Thomson merger

On 15 May 2007, Canada's The Thomson Corporation merged with Reuters in a deal valued at US $17.2 billion. Thomson now controls about 53 percent of the new company, named Thomson Reuters. The chief of Thomson Reuters is Tom Glocer, the former head of Reuters. An earlier rule of 15-percent maximum ownership was waived; the reason as given by Pehr Gyllenhammar, the chairman of the Reuters Founders Share Company, as that the "future of Reuters takes precedence over the principles. If Reuters were not strong enough to continue on its own, the principles would have no meaning." citing the recent bad financial performance of the company. The acquisition was closed on 17 April 2008.

Journalists

Reuters employs several thousand journalists, sometimes at the cost of their lives. In May 2000, Kurt Schork, an American reporter, was killed in an ambush while on assignment in Sierra Leone. In April and August 2003, news cameramen Taras Protsyuk and Mazen Dana were killed in separate incidents by US troops in Iraq. In July 2007, Namir Noor-Eldeen and Saeed Chmagh were killed when they were fired upon by a US military Apache helicopter in Baghdad after having been mistakenly identified as carrying weapons.During 2004, cameramen Adlan Khasanov in Chechnya and Dhia Najim in Iraq were also killed. In April 2008, cameraman Fadel Shana was killed in the Gaza Strip after being hit by an Israeli tank using flechettes.The first Reuters journalist to be taken hostage in action was Anthony Grey. Detained while covering the Cultural Revolution in Peking in the late 1960s, it was said to be in response to the jailing of several Chinese journalists by the colonial British Government in Hong Kong. He was considered to be the first political hostage of the modern age and was released after almost 2 years of solitary confinement. Awarded an OBE by the British Government in recognition of this, he went on to become a best selling author.

Fatalities

Name Nationality Location Date

Kurt Schork American Sierra Leone 24 May 2000

Taras Protsyuk Ukrainian Iraq 8 April 2003

Mazen Dana Palestinian Iraq 17 August 2003

Adlan Khasanov Chechen Chechnya 9 May 2004

Dhia Najim Iraqi Iraq 1 November 2004

Waleed Khaled Iraqi Iraq 28 August 2005

Namir Noor-Eldeen Iraqi Iraq 12 July 2007[10]

Saeed Chmagh Iraqi Iraq 12 July 2007[10]

Fadel Shana Palestinian Gaza Strip 16 April 2008

Hiro Muramoto Japanese Thailand 10 April 2010

Acquisitions & Investments

* Action Images — In September 2005, Reuters purchased North London-based Action Images, a collection of sports photography of more than 8 million images, of which 1.7 million are online.

* Application Networks — In June 2006, Reuters acquired Application Networks, Inc., a provider of trade and risk management software based on JRisk, and agreed to acquire Feri Fund Market Information Ltd (FERI FMI) and its fund database subsidiary, FI Datenservice GmbH (FID).

* AVT Technologies — In December 2002, Reuters announced that it would acquire AVT Technologies, a specialist in foreign exchange transaction technology. Concurrent with the deal, Reuters established an Automated Dealing Technologies business unit, headed up by Mark Redwood, CEO of AVT Technologies.

* Bridge Information Systems — On 28 September 2001, it completed the largest acquisition in its history with a partial acquisition of Bridge Information Systems Inc. Also during the year, the Group acquired 100% of Diagram fip SA and 92% of ProTrader Group LP. In October 2001, the Group disposed of its majority stake in VentureOne Corp.

* ClearForest — In June 2007, Reuters acquired ClearForest, a provider of Text Analytics solutions, whose tagging platform and analytical products allow clients to derive business information from textual content.

* EcoWin — In November 2005, Reuters acquired EcoWin, a Gothenburg (Sweden) based provider of global fianancial, equities, and economic data.

* Factiva — In May 1999, Reuters entered a joint venture with rival Dow Jones & Company to form Factiva, a business news and information provider. In December 2006, Reuters sold its 50% share in Factiva to Dow Jones, who is now sole owner.

* Instinet — In May 2001, Instinet completed an IPO on NASDAQ; Reuters sold its majority stake in Instinet to The Nasdaq Stock Market in 2005.

* Multex.com Inc. — In March 2003, Reuters acquired Multex.com, Inc., a provider of global financial information.

* TIBCO Software — In July 1999, TIBCO Software completed an IPO on NASDAQ; Reuters retains a substantial proportion of the shares. Reuters announced, in early 2000, initiatives designed to migrate core business to an internet-based model.

Corporate locations

The Reuters Building in Canary Wharf, London Borough of Tower Hamlets

Thomson Reuters Building at Times Square, Midtown Manhattan

From 1939, corporate headquarters was in London's famous Fleet Street in a building designed by Sir Edwin Lutyens. In 2005, Reuters moved to a larger building in the more modern Canary Wharf. The Reuters Building at 30 South Colonnade is near the One Canada Square tower, Jubilee Park and Canary Wharf tube station. The open space below the Reuters building has since been renamed Reuters Plaza.

The company's North American headquarters is the Reuters Building at 3 Times Square, New York. It is on Seventh Avenue between 42nd and 43rd Streets, and was constructed from 1998 to 2001. Asian headquarters is located in Singapore, having moved there from Hong Kong ahead of the British handover to China in 1997. It has two offices in Singapore, one in the city centre at One Raffles Quay, and another at 18 Science Park Drive next to the National University of Singapore.

Criticism and controversy

 Policy of objective language

Reuters has a strict policy towards upholding journalistic objectivity. This policy has caused comment on the possible insensitivity of its non-use of the word terrorist in reports, including the September 11 attacks. Reuters has been careful to only use the word terrorist in quotes, whether quotations or scare quotes. Reuters global news editor Stephen Jukes wrote, "We all know that one man's terrorist is another man's freedom fighter, and that Reuters upholds the principle that we do not use the word terrorist." The Washington Post media critic Howard Kurtz responded, "After the 1995 Oklahoma City bombing, and again after the attacks on the World Trade Center and Pentagon, Reuters allowed the events to be described as acts of terror. But as of last week, even that terminology is banned." Reuters later apologised for this characterisation of their policy, although they maintained the policy itself.

The 20 September 2004 edition of The New York Times reported that the Reuters Global Managing Editor, David A. Schlesinger, objected to Canadian newspapers' editing of Reuters articles by inserting the word terrorist, stating that "my goal is to protect our reporters and protect our editorial integrity".

However, when reporting the 7 July 2005 London bombings, the service reported, "Police said they suspected terrorists were behind the bombings." This line appeared to break with their previous policy and was also criticised.Reuters later clarified by pointing out they include the word "when we are quoting someone directly or in indirect speech," and the headline was an example of the latter. The news organisation has subsequently used "terrorist" without quotations when the article clarifies that it is someone else's words.

 Photograph controversies / Anti-Israel Bias

2006 Israel-Lebanon conflict photographs controversies

Adnan Hajj photographs controversy

Reuters was accused of bias against Israel in its coverage of the 2006 Israel-Lebanon conflict, in which the company used two doctored photos by a Lebanese freelance photographer Adnan Hajj. On 7 August 2006, Reuters announced it severed all ties with Hajj and said his photographs would be removed from its database.

In 2010, Reuters was criticised again for anti-Israeli bias when it cropped out activists' knives and a naval commando's blood from photographs taken aboard the Mavi Marmara during the Gaza flotilla raid.In two separate photographs, knives held by the activists were edited out of the versions of the pictures published by Reuters. The live arms wielded by the Israeli forces who had boarded the ship were not cropped out.

(source:wikipedia)