Exam Ju 2

Question 1

Trade Credit include 4 types which are :

Answer 1

Open-book credit (without a written agreement)

Promissory Note (written promise drawn up by the customer)

Trade Draft (written promise drawn up by the supplier

Hire purchase ( deposit + regular instalments)

Question 2

Short term

Bank loans 2 types which are:

Answer 2

Secured loan : backed by collateral which is an asset such as property

Unsecured loan : the bank may protect itself by requiring the borrower to maintain a compensating balance, which is a percentage of the loan kept on deposit at the bank while the loan is outstanding

Question 3

Long term financing are:

Answer 3

Medium term loans : 1 to 10 years

Long term loans : + 10 years

Leasing

Bonds

Equity capital

Question 4

Uk secured bonds are called :

Answer 4

Debentures

Question 5

Short term financing (4 trucs)

Answer 5

Trade Credit (4 types)

Bank loans (2 types)

Commercial Paper

Factoring

Question 6

Merger def:

Answer 6

A merger is said to take place when two or more companies agree to combine

Question 7

Merger may take two forms:

Answer 7

Merger through absorption:

an absorption is a combination of two or more companies into an existing company

Question 8

Merger may take two forms:

Answer 8

Merger through consolidation:

A consolidation is a combination of two or more companies into a new company

Question 9

3 types of mergers:

Answer 9

Horizontal merger:

A combination of two directs competitirs, with similar products and market

Question 10

3 types of mergers:

Answer 10

Vertical merger:a combination of two or more companies involved in different stages of production or distribution of the dame product

Question 11

3 types of mergers:

Answer 11

Conglomerate merger:

A combination of companies engaged in unrelated lines of business activity

Question 12

Acquisition (def)

Answer 12

An acquisition can be defined as the act of gaining a majority stake in the target company by an acquiring company

Question 13

Acquisition may take two forms:

Answer 13

Unfriendly acquisition:
A hostile takeover occurs when the acquiring corporation attempts to take over the target corporation without the agreement of the target corporation’s board of directors.

Question 14

Acquisition may tale two forms:

Answer 14

Friendly acquisition:

A friendly takeover occurs when one corporation acquires another with both board of directors approving the transaction.

Question 15

Balance sheet

Answer 15

The balance sheet is a snapshot of a company’s assets, liabilities and shareholders’ equity on a specified date.

Question 16

Income statement

Answer 16

The income statement is a report that shows how much money a company earned over a specific time period.

Question 17

Benefices non repartis (reserves)

Answer 17

Retained earnings

Question 18

Reinvestir l’argent dans le business

Answer 18

To plough back the money into the business

Question 19

Payer au comptant

Answer 19

Up-front

Question 20

Payer des mensualités

Answer 20

Regular instalments

Question 21

IPO. Definition

Ipo1

Answer 21

IPO is the process by which Private Limited Companies go public.

An IPO is the first sale of stock by a private company to the public.

Question 22

Why do company go public ?

Ipo 1

Answer 22

To raise cash

Growth and Expansion

Better rating, so you can get cheaper money

-more liquidity

Question 23

The Underwriting process

How to get in on an IPO ?

Ipo 2

Answer 23

Underwriting is the process of raising money by either debt or equity

Question 24

Cooling off period

Ipo 2

Answer 24

Delai de rétractation

Delai de reflexion

Question 25

Red herring

Ipo 2

Answer 25

Prospectus containing all the information about the company except for the offer price and the effective date which aren’t known at that time

With the ref herring in hand, the underwriter and company go on a road show and attempt to hype and build up interest for the issue.

Question 26

The lockup Period

Ipo 3

Answer 26

Period in which investors are not allowed to sell their shares

90 days is the minimum period

Question 27

Flipping

IPO 3

Answer 27

Flipping is reselling a hot IPO stock in the first few days to earn a quick profit

Question 28

Il y a eu une augmentation spectaculaire des ventes de 25% atteignant 9 millions

Answer 28

There was a dramatic rise in sales of 25% to 9 millions

Question 29

Les ventes ont augmenté de 10% atteignant 9 millions

Answer 29

Sales went up by 10% to 9 millions

Question 30

La tendance haussière a continué, atteignant 1,95 millions en 1987

Answer 30

The upward trend continued reaching 1,95 millions in 1987

Question 31

Il y a eu une hausse constante entre 1960 et 1972, suivi d’une baisse brusque

Answer 31

There was a steady rise from 1960 and 1972, followed by a sharp decline

Question 32

What are the three main company reports ?

Answer 32

The Chairman letter to the shareholder

The business review

The financial review and MD&A

Question 33

Chairman letter to the shareholder

Answer 33

Content: a broad overview of the firm’s operations throughout the year

Form: letter

Question 34

Business review

Answer 34

Content:
recent developments
Trends
Objectives

Form: narrative

Question 35

Financial review - MD&A

Management Discussion and Analysis

Answer 35

Company performance in monetary terms

Content: all significatives y to y changes

Form: narrative and charts and graphs