End-Course revision

ts (4) …………………….usually plant and equipment but may include other assets such as aircraft, ships, containers and oil rigs.
Occasions arise where a company (5) …………………….to buy capital plant and equipment but is (6) …………………….to do so even on installments basis. This may be because the company is short (7) …………………….cash, and the position would get worse with the additional purchase of fixed assets; or perhaps the plant carries a high obsolescence risk.
Such a company might consider (8) …………………….the plant or machinery it requires. To do this the company approaches a leasing company which will (9) …………………….the goods from the manufacturer. The manufacturer gets paid (10) ……………………. full by the leasing company, usually after installation at the hirer's premises.
VII. Reading:
 1. Reading one:
 Individuals and groups of people doing business as a partnership, have unlimited liability for debts, unless they form a limited company. If the business does badly and can not pay its debts, any creditor can have it declare bankrupt. The unsuccessful business people have to sell nearly all their possessions in order to pay their debts. That is why most people doing business form limited companies. A limited company is a legal entity separate from its owners, and it is liable for the amount of capital that has been invested in it. If a limited company goes bankrupt, it is wound up and its assets are liquidated (i.e sold) to pay the debts. If the assets don’t cover the liabilities or the debts, they remain unpaid. The creditors simply do not get all their money back. 
 A successful, growing company can apply to a stock exchange to become a public limited company (GB) or a listed company (US). Newer and smaller companies usually join “ over-the-counter “ markets, such as Unlisted securities Market in London or Nasdaq in NewYork. Very successful businesses can apply to be quoted or listed (i.e. to have their shares traded.) on major stock exchanges. Publicly quoted companies have to fulfill a large number of requirements, including sending their shareholders an independently-audited report every year, containing the year’s trading results and a statement of their financial position.
 The act of issuing shares (GB) or stocks (US) for the first time is known as floating a company (making a flotation). Companies generally use an investment bank to underwrite the issue, i.e. to guarantee to purchase all the securities at an agreed price on a certain day, if they can not be sold to the public. Companies wishing to raise more money to expansion can sometimes issue new shares, which are normally offered first to existing shareholders at less than their market price.
1. Find the words from the text which mean the following:
a.	 Having a responsibility or an obligation to do something, e.g. to pay a debt.	
b. 	A person or organization to whom money is owned (for goods or services rendered, or as repayment of loan) 	
c. 	To be insolvent : unable to pay debts	
d.	 Everything of value owned by a business that can be used to produce goods, pay liabilities, and so on	
e. 	To sell all the possessions of a bankrupt business	
g. 	To provide money for a company or other project	
h. To guarantee to buy an entire new share issue, if no one else wants it.	
2. Answer the questions below :
a. 	What topic is the passage concerned with ?
b.	What are the obligations of publicly-quoted company ?
c. 	What is an over-counter market ?
d. 	How do companies raise further share capital ?
2. Reading two
A. Gap-filling:
The rapid development of factoring in recent years has proved its importance to all parties involved, especially to the suppliers who have to supply goods on credit because of the tough (1) ……………………… an inevitability in the free market.
Factoring enables the supplier to (2) ……………………… money from the unpaid invoices, solving the (3) ………………………of capital for their further production.
Another advantage is that they don’t have to employ extra staff to collect payments from their customers and pay interest on the money used by their customers. Moreover, the suppliers can take advantage of factoring services to (4) ………………………their cash flow position, that is to avoid the negative cash flow position by agreeing with a factoring company (usually a bank) the date when they pay money for the unpaid invoices. The suppliers can, then, use this money to (5) ……………………… some fixed payments such as salary and wage payments to employees, business taxes, insurance premium and other fixed debts.
However, the factor would provide factoring services for the (6) ………………………only if they were able to (7) ……………………… the risk of the customers given credits. They need to assess the debtors’ credit status and credit worthiness before they decide to purchase the supplier’s account receivable. The information on credit rating is (8) ……………………… to come by in Vietnam at present. The credit bureaus of banks are not (9) ……………………… enough and do not have the (10) ……………………… credit information on necessary customers. It’s the main reason why the Vietnamese banks have not provided factoring services yet.
B. Answer the questions:
1. How many advantages of factoring to the suppliers are there according to the text? What are they?
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How can the suppliers use factoring to regulate their cash flow position?
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When does a factoring service become feasible?
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Why is factoring not available in Vietnam?
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VIII. Translate these paragraphs:
Payment in advance is undoubtedly the safest way for an exporter to secure settlement but buyers are seldom prepared to pay for goods in advance of shipment, other than for small consignments. The payment is generally made by the buyer through his bank by means of a draft or by international money transfer or express international money transfer in favour of the exporter.
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With L/C, beside the advantage of a credit to the exporter, who knows that he will receive payment provided he complies with its terms, there are benefits to the buyer. He knows that payment will only be made by the advising bank when the exact documents specified have been received – as these are the documents of title, then once they are in the hands of the paying bank, it will only be a matter of time before they are sent to him, allowing him to collect the goods. There is, however, a risk to the issuing bank because the credit only deals with documents and not in goods, so that provided the exporter complies with the terms and conditions of the credit, he will be paid even though the crates supposedly containing the goods have been packed with sawdust and old newspapers.
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3.	 Documentary letters of credit may be of two types: revocable or irrevocable. A revocable credit gives no undertaking to the exporter that payment will actually be made or a bill of exchange accepted because it may be cancelled or amended at any time up to presentation of the documents without the prior knowledge of the exporter. An irrevocable credit does not suffer from this disadvantage and consequently is almost invariably specified in contracts: under such a credit, the issuing bank gives its irrevocable undertaking to make the payment if all the terms of the credit are met, and can only amend or cancel the credit with the consent of all parties.
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IX. Game
Look through the information
Bank X has correspondent relationship with three foreign banks, A, B & C. 
The Bank experiences a delay of 30 days in the payment of confirmed documentary credits by Bank A & a delay of 50 days in the case of Bank C. 
The Bank provides Bank A with a line for confirmation of credit up to $2 million. It provides the bank which pays confirmed documentary credits at sight with a line for confirmation of credits up to $3 million. 
Bank X also provides one of the banks with a line for conformation of credits up to $1 million, and the economy of the latter’s bank country depends on exports of coal. The bank which pays confirmed documentary credits at sight is in a country where the national economy depends on exports of machinery.
Given this information, which of Bank X’s correspondent banks:
pays confirmed documentary credits at sight?
has a line for conformation of credits up to $1 million?
is in the country where the economy depends on oil revenues?
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