Exam Ju 2 Flashcards
Trade Credit include 4 types which are :
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)
Short term
Bank loans 2 types which are:
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
Long term financing are:
Medium term loans : 1 to 10 years
Long term loans : + 10 years
Leasing
Bonds
Equity capital
Uk secured bonds are called :
Debentures
Short term financing (4 trucs)
Trade Credit (4 types)
Bank loans (2 types)
Commercial Paper
Factoring
Merger def:
A merger is said to take place when two or more companies agree to combine
Merger may take two forms:
Merger through absorption:
an absorption is a combination of two or more companies into an existing company
Merger may take two forms:
Merger through consolidation:
A consolidation is a combination of two or more companies into a new company
3 types of mergers:
Horizontal merger:
A combination of two directs competitirs, with similar products and market
3 types of mergers:
Vertical merger:a combination of two or more companies involved in different stages of production or distribution of the dame product
3 types of mergers:
Conglomerate merger:
A combination of companies engaged in unrelated lines of business activity
Acquisition (def)
An acquisition can be defined as the act of gaining a majority stake in the target company by an acquiring company
Acquisition may take two forms:
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.
Acquisition may tale two forms:
Friendly acquisition:
A friendly takeover occurs when one corporation acquires another with both board of directors approving the transaction.
Balance sheet
The balance sheet is a snapshot of a company’s assets, liabilities and shareholders’ equity on a specified date.
Income statement
The income statement is a report that shows how much money a company earned over a specific time period.
Benefices non repartis (reserves)
Retained earnings
Reinvestir l’argent dans le business
To plough back the money into the business
Payer au comptant
Up-front
Payer des mensualités
Regular instalments
IPO. Definition
Ipo1
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.
Why do company go public ?
Ipo 1
To raise cash
Growth and Expansion
Better rating, so you can get cheaper money
-more liquidity
The Underwriting process
How to get in on an IPO ?
Ipo 2
Underwriting is the process of raising money by either debt or equity
Cooling off period
Ipo 2
Delai de rétractation
Delai de reflexion
Red herring
Ipo 2
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.
The lockup Period
Ipo 3
Period in which investors are not allowed to sell their shares
90 days is the minimum period
Flipping
IPO 3
Flipping is reselling a hot IPO stock in the first few days to earn a quick profit
Il y a eu une augmentation spectaculaire des ventes de 25% atteignant 9 millions
There was a dramatic rise in sales of 25% to 9 millions
Les ventes ont augmenté de 10% atteignant 9 millions
Sales went up by 10% to 9 millions
La tendance haussière a continué, atteignant 1,95 millions en 1987
The upward trend continued reaching 1,95 millions in 1987
Il y a eu une hausse constante entre 1960 et 1972, suivi d’une baisse brusque
There was a steady rise from 1960 and 1972, followed by a sharp decline
What are the three main company reports ?
The Chairman letter to the shareholder
The business review
The financial review and MD&A
Chairman letter to the shareholder
Content: a broad overview of the firm’s operations throughout the year
Form: letter
Business review
Content:
recent developments
Trends
Objectives
Form: narrative
Financial review - MD&A
Management Discussion and Analysis
Company performance in monetary terms
Content: all significatives y to y changes
Form: narrative and charts and graphs
