QUESTION: I own a few shares of stock in each of a dozen companies. Since I am retired, I devote quite a lot of time to reading all the reports the companies send and going to the annual meetings. In other words, I am fairly familiar with reading financial statements. But I still don't feel that I can spot financial trouble spots that the companies are trying to play down. I decided to write because last week I was in a friend's office and noticed a brochure on a coffee table that purported to show people how to read financial statements. It didn't help at all. What I really need is a book or brochure or video tape that will tell me how to read behind the numbers. Do you know of any such thing, preferably free?--D. D.
ANSWER: Even board members of companies have been known to report that they don't feel completely informed about the company's financial health. One former director of a Southern California technology company, for example, reports that he was appalled to discover the true breadth and depth of the company's problems when he agreed to take over as chief executive.
But with that in mind, there is a booklet that may give you some ideas about where to look for skeletons in a company's financial closet. And it is free.
To get a copy of "What Else Can Financial Statements Tell You?" write to the American Institute of Certified Public Accountants, Order Department, P.O. Box 1003, New York, N.Y. 10108-1003.
Q: Your recent column on employees wasting time at work raises a related question. Do you know how many entire days employees waste on average by calling in sick when they really just want a day off?--F. E.
A: Various studies conducted within the past year by employer groups and business consultants generally agree that the average employee calls in sick when he or she is not sick between seven and 12 days every year.
One consulting group that specializes in cost analysis, Runzheimer International, estimates that this sick-leave abuse costs employers $7 billion in sick-time compensation alone. And that's not the half of it. This casual absenteeism also costs U.S. employers another $20 billion a year, Runzheimer estimates, in lost productivity and in the expense of hiring and training temporary replacements for these "sick" workers.
January and February, by the way, are the two worst months for sick-time abuse, Runzheimer says.
Q: Do you have any idea whether lenders refinance more mortgages a year than the number of new ones they make?--S. C.
A: The mix changes as interest rates rise and fall, of course. Consumers are much more likely to seek refinancings during periods of relatively low interest rates, as is currently the case.
An informal survey of a few major mortgage lenders shows that mortgage refinancing is again on the upswing after peaking last spring or summer. Lenders report that refinancing accounted for between 40% to 50% of all new mortgage loans at that time, which they say is an exceptionally high ratio.
By the end of the summer, refinancing applications started to dwindle, to about one-third of new mortgage loans. But with some mortgage rates now down into single digits for the first time in more than a decade, lenders say the refinancing rate is now heading back up toward the 40% level. And some are predicting that if interest rates remain at their current levels into the summer months, refinancings may actually exceed the number of new loans later this year.
Debra Whitefield cannot answer mail individually but will respond in this column to financial questions of general interest. Do not telephone. Write to Money Talk, Los Angeles Times, 780 Third Ave., Suite 3801, New York, N.Y. 10017.