АНГЛИЙСКИЙ
ПЕРЕВОД, РЕФЕРИРОВАНИЕ
И АННОТИРОВАНИЕ. ТЕОРИЯ
И ПРАКТИКА
CONTENTS
PART 1…………………………………………………………………………6
UNIT 1 …………………………………………………………………...…...10
UNIT 2 …………………………………………………………………...…...18
UNIT 3 ………………………………………………………………………..93
UNIT 4 …………………………………………………………………...….135
UNIT 5 ………………………………………………………………...…….148
UNIT 6……………………………………………………………………….211
UNIT 7 …………………………………………………………………...….246
UNIT 8 …………………………………………………………………...….273
UNIT 9 …………………………………………………………………...….288
PART 2 …………………………………………………………………..….302
UNIT 1 ……………………………………………………………………....312
UNIT 2 …………………………………………………………………...….327
UNIT 3 …………………………………………………………………...….345
UNIT 4……………………………………………………………………….364
UNIT 5 …………………………………………………………………...….376
UNIT 6 ……………………………………………………………………....392
UNIT 7 ……………………………………………………………………....402
UNIT 8 …………………………………………………………………...….420
PART 3 ………………………………………………………………….….447
Раздел 1……………………………………………………………………..450
Раздел 2…………………………………………………………………..…455
Раздел 3……………………………………………………………………..473
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Предисловие
Учебник «Экономический английский. Перевод, аннотирование и реферирование
экономических текстов. Теория и практика» подготовлен для использования в рамках курса
«Экономический английский: перевод, аннотирование и реферирование. Компетентностный
подход» и предназначен для студентов III, IV курсов факультета МЭО, магистрантов I
курса, слушателей программ МВА, студентов 2-го высшего образования, студентов,
изучающих английский язык как второй 2-го и 3-го года обучения, представителей
компаний, банков и других организаций, повышающих свою квалификацию в области языка
специальности, преподавателей, осваивающих новый аспект – экономический английский.
Цикл подготовки с использованием данного учебника рассчитан на четыре семестра в
качестве прикладной дисциплины, обучение по которой проводится в тесной связи с
изучаемыми профилирующими дисциплинами, а также с учетом будущей профессиональной
деятельности выпускника (магистра) и соответствия его подготовки критериям и модулям
компетенций, сформулированными российским и международным бизнес сообществом.
В основе процесса обучения лежит компетентностный подход, обеспечивающий
подготовку специалиста, способного решать определенный класс профессиональных задач,
что предполагает наличие совокупности интегрированных качеств личности: знаний,
умений, навыков, способов деятельности.
В соответствии с назначением основная цель курса является комплексной и включает
формирование профессионально значимых компетенций, при этом важной является
коммуникативная цель.
Учебный процесс призван активизировать имеющиеся у каждого студента
интеллектуальные способности, знания и речевой опыт, развивать его личностные
параметры. Обучение подчинено общей задаче подготовки экономиста-международника и
предусматривает совершенствование у студентов компетенций, необходимых для
выполнения конкретных видов профессиональной речевой деятельности, определяемых
квалификационной характеристикой выпускника по направлению МЭО.
Выпускник факультета международных экономических отношений должен уметь:
вести на английском языке беседу, участвовать в дискуссии, выступать публично по
темам в рамках профессиональной и социально-культурной сфер общения, интегрируя
знания по специальности, общему языку, экономическому переводу;
уметь оперировать в ходе дискуссии обширным лексико-грамматическим аппаратом,
вести не только диалог, но и полилог, высказывать свою точку зрения с учетом
социокультурного компонента и принятого речевого этикета;
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выполнять письменный перевод печатных текстов с английского языка на русский и с
русского языка на английский в рамках профессиональной сферы общения;
реферировать и аннотировать на английском и русском языках англоязычные и
русскоязычные печатные и звучащие тексты в рамках профессиональной сферы общения,
а также общественно-политической и социально-культурной направленности;
составлять аналитические обзоры тематических подборок информационных материалов
по специальности, а также на общественно-политические и социально- культурные темы
с последующим комментарием в рамках принятого речевого этикета;
Формирование иноязычной компетентности рассматривается как единый,
взаимосвязанный процесс, позволяющий совершенствовать специфические навыки и
умения.
В процессе обучения экономическому английскому языку в МГИМО (Университете)
студенты совершенствуют навыки работы со справочной литературой на английском языке и
другими информационными ресурсами (словарями, справочниками, энциклопедиями, сетью
Интернет) и знакомятся с последними значимыми изменениями в специальном словарном
запасе и словоупотреблении в англоязычных странах.
В рамках интегративной парадигмы образовательная и воспитательная цели
реализуются параллельно с коммуникативной как за счет отбора учебного материала, так и
применения субъектно-деятельностного подхода к организации обучения, предполагающего
формирование индивидуальных траекторий подготовки выпускников.
Достижение развивающих целей обеспечивается за счет создания обширного банка
упражнений и индивидуальных заданий, направленных на развитие креативности и
выполняемых студентами по выбору. В процессе обучения формируются такие качества
личности как самостоятельность в развитии познавательных интересов, логика и
способность аналитического мышления, ответственность в принятии решений, память,
внимание, языковая догадка, умения и навыки самостоятельной и коллективной работы.
Пособие включает аутентичные материалы, которые подобраны по тематическому
признаку и охватывают основные тенденции в мировой экономической системе. Тексты,
предлагаемые в рамках одной темы отражают различные точки зрения на проблему, носят
полемический характер и могут служить основой для дискуссии. Кроме того, тексты
насыщены переводческими и лексическими трудностями, более глубокая отработка которых
может быть осуществлена с помощью соответствующих упражнений.
Пособие имеет многоуровневую структуру и распределение материала организовано
по принципу «от простого к сложному». Аналогичный подход сохраняется в рамках каждого
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отдельного раздела, поэтому материал может быть использован для обучения слушателей с
разной языковой подготовкой.
Конкретные рекомендации по работе с предложенным учебным материалом
приводятся в методических записках, а также в разделе по теории и практике реферирования.
5
Part 1
6
Цель данного раздела учебника состоит в формировании профессионально значимых
компетенций по европейской системе классификаций: когнитивной, функциональной,
личностной и этической. Организация учебного материала, его тематическое содержание и
виды упражнений позволяют развивать частные компетенции, необходимые для выполнения
профессиональной деятельности в области международных экономических отношений.
В соответствии с квалификационными требованиями к таким компетенциям
относятся:
Умение строить связанные высказывания репродуктивного и продуктивного характера, в
том числе с аргументацией и выражением своего отношения к полученной информации.
Умение делать сообщения и доклады на английском языке по экономической тематике.
Умение вести дискуссию в рамках профессиональной тематики.
Умение синтезировать и продуцировать вторичные тексты различного характера
(рефераты и др.).
Умение читать и понимать литературу по специальности.
Умение проводить творческий анализ и обобщение фактов в письменной форме.
Умение переводить документы, статьи и другие материалы по профессиональной
тематике с английского языка на русский и с русского языка на английский.
● Умение осуществлять перевод "с листа" с английского языка на русский и с русского
языка на английский.
Умение интегрировать специальные и языковые знания и умения, накопленные в период
обучения.
Умение самостоятельно получать знания и решать разнообразные проблемы, принимать
нестандартные решения.
Методическая записка
Первый этап обучения (Часть I) в рамках общего курса данного учебника направлен
на овладение навыками перевода оригинальных английских текстов современной
экономической тематики, освоение терминологии экономического характера, формирование
первоначальных умений вести дискуссию, делать сообщения, анализировать и
систематизировать полученную иноязычную информацию.
Первая часть учебника рассчитана на 30-40 часов аудиторной работы и 40-60 часов
внеаудиторной работы и состоит из 9 разделов (Units), в которых разработаны следующие
темы: «Экономические циклы и основные экономические показатели», «Производство и
сбыт продукции», «Слияние и поглощение», «Рынки и конкурентная борьба», «Биржи и
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основные финансовые инструменты», «Банкротство компаний», «Учет прибылей и
убытков», «Организационная структура компаний» и др.
Чтобы помочь студенту лучше ориентироваться в материале пособия, все 8 разделов
(Units) подчинены единой структуре:
Каждый раздел (Unit) состоит из нескольких секций (Sections). Каждая секция
включает:
1. Предварительное введение в тему данной секции (Lead-in), предназначенное для
самостоятельного изучения студентами с последующим обсуждением на уроке.
2. Слова и словосочетания (Vocabulary Notes) тематического характера, подлежащие
активному усвоению.
Особенностью данной части является то, что в центре внимания находится
терминология фундаментального значения, связанная с самыми различными видами
внешнеэкономической деятельности, причем дается не только перевод термина, но и
его систематизированное объяснение. Все термины и словосочетания предлагаются
для активного усвоения студентами.
3. Предложения для перевода (Vocabulary Practice) с английского языка на русский, целью
которых является усвоение и активизация новой экономический терминологии.
Предложения могут быть использованы как для самостоятельной работы студентов (на
первом этапе обучения), так и для работы в аудитории.
4. Тексты для перевода (Texts to Translate) взяты из современных английских и
американских журналов и газет, подобраны по тематическому признаку и охватывают
основные тенденции мировой экономический системы. Тексты, предлагаемые в рамках
одной темы, отражают различные точки зрения на проблему и носят полемический
характер, что дает возможность для последующей дискуссии. Тексты насыщены
переводческими трудностями, а также лексическими единицами, представленными в
подразделе Vocabulary Notes и Translation Notes, при этом дается ссылка на
соответствующий параграф, где дается подробный комментарий переводческих приемов
и трудностей с аппаратом упражнений. Каждый раздел содержит более легкие тексты
(для устного перевода) и более сложные (для письменного).
5. Перевод с русского языка на английский (Vocabulary Check), который наряду с
контрольной проверочной работой является завершающим этапом изучения каждого
раздела (Unit).
6. Каждый раздел завершается материалом с элементами проблемного обучения (Case
Study), который может использоваться как для индивидуальных презентаций, так и для
группового обсуждения.
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В заключение хотелось бы отметить, что данный порядок работы с материалом уже
был опробован на протяжении нескольких лет и показал хорошие результаты. Но, вполне
естественно, что творческий, индивидуальный подход, учитывая возможности конкретной
группы студентов, помогут преподавателям найти оптимальный путь для достижения
поставленной цели обучения.
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Part 1
Unit 1
WHAT BUSINESS
ARE YOU IN?
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UNIT 1
LEAD-IN
Neither individuals nor societies can have all the things they would love to have. There
simply is not enough of everything to go around. Economists note that there is no limit to the
amount or kinds of things that people want. There is, however, a limit to the resources, things used
to produce goods and services, available to satisfy those wants. Thus, every society is faced with the
identical problem, the problem of scarcity. With this in mind, we can define economics as the social
science that describes and analyzes how society chooses from among scarce resources to satisfy its
wants. Economics may appear to be the study of complicated tables and charts, statistics and
numbers, but, more specifically, it is the study of what constitutes rational human behavior in the
endeavor to fulfill needs and wants.
The development of modern economics began in the 17th century. Since that time
economists have developed methods for studying and explaining how individuals, businesses and
nations use their available economic resources.
Probably the most fundamental of concepts in economics, supply and demand make up the
backbone of market economies. Demand refers to how much (quantity) of a product or service is
desired by buyers. The quantity demanded is the amount of a certain product people are willing to
buy at a certain price. Supply represents how much the market can offer. The quantity supplied
refers to the amount of a certain product producers are willing to supply when receiving a certain
price. The correlation between price and how much of a product or service is supplied into the
market is known as the supply relationship. Price therefore, is a reflection of supply and demand.
Economists have two ways of looking at economics and the economy. One is the macro
approach, and the other is the micro. Macroeconomics looks at the total output of a nation and the
way the nation allocates its limited resources of land, labour, and capital in an attempt to maximize
production levels and promote trade and growth for future generations.
Microeconomics examines the economic behaviour of individual actors such as
businesses, households, and individuals, with a view to understand decision making in the face of
scarcity and the allocation consequences of these decisions. It tends to be more scientific in its
approach, and studies the parts that make up the whole economy. Analyzing certain aspects of
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human behavior, microeconomics shows us how individuals and firms respond to changes in price
and why they demand what they do at particular price levels.
What is business?
Business refers to at least three closely related commercial topics.
The first is a commercial, professional or industrial organization, generally referred to as a
business. The second is commercial, professional, and industrial activity generally. Finally,
business can be used to refer to a particular area of economic activity, such as the record business or
the computer business.
A business often refers to a small organization that is owned and run by one person or a
few people. A business may also be referred to formally as a concern, or a firm. A firm is a
company, especially one providing professional or financial services. A company can also refer to
large organizations. Large companies are referred to as corporations, especially in the United
States. Corporate is used to describe things relating to a corporation, or to corporations in general.
Large companies operating in many countries are multinationals.
Conglomerate is a large business organization that is formed when several different
businesses join together.
A business may be referred to as an enterprise to emphasize its adventurous, risk-taking
qualities and business in general may be referred to in the same way, for example in combinations
such as free enterprise (an economic system in which businesses can compete with each other
without being controlled by government) and private enterprise (that is owned and managed by
independent people or businesses, rather than by the government)
Big business can refer to large business organizations or to any business activity that
makes a lot of money. Small companies are referred to as small businesses or small firms.
Business is also referred to as commerce. With some exceptions (such as cooperatives,
non-profit organisations and generally, institutions of government), businesses exist to produce
profit. Commerce, and its related adjective commercial, are often used to distinguish the business
sphere from other areas such as government or arts, or to distinguish it from non-money-making
activities.
VOCABULARY
resources -запасы, ресурсы, средства; природные богатства
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economy
market economy - рыночная экономика; страна с рыночной экономикой;
развитая капиталистическая страна
market economies - рыночное хозяйство; страны с рыночной экономикой
transition to a market - переход к рыночной экономике, к рынку
economy
demand - спрос
supply - предложение
supply and demand - спрос и предложение
macroeconomics - макроэкономика
microeconomics - микроэкономика (анализирует взаимоотношения между
отдельными хозяйственными единицами: потребителем,
фирмой и т.д.)
total output - валовый выпуск, все производство, вся продукция;
общий объем производства
allocate -размещать, распределять (ресурсы); выделять,
ассигновать (средства)
labour - рабочая сила; труд (противоположность капиталу )
labour force - численность рабочих и служащих (на предприятии,
отрасли промышленности или в стране); трудовые
ресурсы
labour intensity
productivity of labour - трудоемкость, интенсивность труда
- производительность труда
household - домашнее хозяйство
business - бизнес, дело, предпринимательство; коммерческая
деятельность; сделка (обычно выгодная), торговые
операции; деловые круги, деловая жизнь
a business, a firm, - компания, предприятие, фирма
a concern, a company
individual - физическое лицо
activity - деятельность; активность (спроса, рынка)
enterprise - предприимчивость, инициатива; предприятие, фирма,
компания; предпринимательство
free enterprise, - частное предприятие; частное предпринимательство,
private enterprise свободное предпринимательство
corporation - объединение, корпорация, акционерная компания
corporate (амер.),
- корпоративный, акционерный, корпорационный
multinational - многонациональный, международная компания,
транснациональная компания (ТНК)
conglomerate - промышленный конгломерат (объединяет предприятия,
принадлежащие различным отраслям экономики и не
связанные производственной кооперацией)
big business - большой бизнес, монополистический капитал, крупное
предприятие
small and medium- - мaлый и средний бизнес; предпринимательство; малое
sized companies предприятие
(firms, businesses)
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commerce - торговля, коммерция
commercial - торговый, коммерческий; занимающийся торговлей;
прибыльный, приносящий доход, рентабельный
COMPREHENSION QUESTIONS:
1) What is economics?
2) What makes up the backbone of market economies?
3) What is demand? supply?
4) What are the two ways of looking at economics and economy?
5) What do macroeconomics and microeconomics study?
6) What is business? What three related topics does it refer to?
VOCABULARY PRACTICE
Business continues to evolve as markets change. Предпринимательская деятельность
развивается в условиях развития рынка.
We can pool our resources in order to lower costs. Мы можем привлечь наши ресурсы
для снижения издержек.
18,400 new houses will be needed by 2011 to cope with the demand. Для того, чтобы
удовлетворить спрос к 2011 году потребуется..
Our task is to decide the best way to allocate scarce resources.Наша задача найти
оптимальный вариант распределения ограниченных ресурсов.
The decision was made on a purely commercial basis. Решение было принято
исключительно изходя из коммерческой точки зрения.
Mr Gate’s boyhood pastime was computer programming. Today Microsoft, his company,
is the world’s most successful supplier of computer software.
Government in Malaysia has promised to reduce its interference in the economy and rely
on private enterprise to pace economic growth.
In Korea, democracy has slowed some government decision-making. But it has also cut the
power of big business groups and the bureaucracy, in the process creating freer markets and more
opportunities for small businesses.
TEXTS TO TRANSLATE:
1. Business Is Booming Almost Everywhere
14
GIVEN how easy it has been to find something to worry about, be it the plummeting dollar,
war in Iraq or the crookedness of so many corporate bosses, it has been easy to miss one
extraordinarily positive economic trend: for companies around the world, on average, business has
never been better.
Profits tend to grow fastest in the early part of a recovery, when firms use spare capacity to
raise output at little extra cost. As America's economy began to grow again, profits duly shot up.
But, ordinarily, profit growth slows as the cycle matures, firms hire more workers and costs rise.
Intriguingly, this has not yet happened in America, despite three years of strong growth. Last year,
the operating profits of the big, publicly-listed firms that make up the S&P 500 stockmarket index
grew by an estimated 20%. From tech firms such as Google to industrial and financial behemoths
such as General Electric, America's bosses continue to spring pleasant surprises on grateful
shareholders. With most results announced, profits for the fourth quarter ought comfortably to beat
the 15.1% growth, year-on-year, which the market has been expecting, says Thomson Financial, a
research firm.
Things are similarly positive across the Atlantic. In Britain, the huge profits of two oil
firms, BP and Royal Dutch/Shell—Shell's $18.5 billion beat the previous British record set last year
by HSBC, a bank. On the continent, Puma, Europe's third-biggest maker of sportswear, reported a
44% increase in net profit. Then Renault, France's second-biggest carmaker, reported a 43% rise in
net profits to €3.6 billion ($4.6 billion). France's two big luxury-goods conglomerates, Moët
Hennessy, Louis Vuitton and Pinault-Printemps-Redoute, have also had a good year. Together, the
operating profits of the big firms tracked by the S&P Europe 350 index rose by a striking 78% last
year; they are forecast to grow by a further 30% this year. A survey this week of chief executives by
Goldman Sachs found European bosses even more upbeat than their peers in America.
VOCABULARY:
tend to - иметь тенденцию; быть склонным
profits tend to grow… – прибыль, как правило, увеличивается…
shareholder - акционер
15
year-on-year - по сравнению с предыдущим годом (о показателе, величина которого
сравнивается с величиной, имевшей место в соответствующем периоде прошлого
года); в годовом исчислении
TRANSLATION NOTES:
at little extra cost – почти без дополнительных затрат (См. часть Ш, раздел 3, § 10,
п.10.2)
given how easy it has been…- учитывая (принимая во внимание ) то, как легко…
Причастие часто выступает в функции союза или предлога и переводится с опорой
на контекст. Например, причастие given переводится при наличии, если учесть,
учитывая и т.д. (См. часть Ш, раздел 3, § 6, п.6.4)
Standard and Poor's S&P - агентство "Стандард энд Пурз" (крупнейшее рейтинговое
агентство, поставляющее на мировые рынки аналитические услуги и информацию,
составляющее различные индексы, основной из которых - индекс "Стандард энд Пурз
- 500") (См. часть Ш, раздел 2 ,§ 1, п.1.5)
Standard and Poor's 500 Stock Index - индекс "Стандард энд Пурз 500" (взвешенный
по рыночной стоимости индекс акций 500 корпораций (400 промышленных
корпораций, 20 транспортных, 40 финансовых и 40 коммунальных компаний),
зарегистрированных на Нью-Йоркской фондовой бирже
grow by – увеличиваться на
grow to – увеличиваться до
Предлоги by и to переводятся на русский язык как «на» и «до» соответственно, когда
речь идет об увеличении или уменьшении чего-то. Часто предлог by отсутствует, но
подразумевается. Сравните:
Output rose (by) 5%. – Выпуск продукции увеличился на 5%.
Output rose to 1000 units. – Выпуск продукции вырос до 1000 единиц.
16
AvtoVAZ' dominance faces a serious threat as foreign car plants spring up in Russia
IT MARKS THE END OF AN ERA— and has sparked intense speculation about the
future of one of Russia's most important companies. On Oct. 27, Vladimir Kadannikov, 64,
chairman of Russian carmaker AvtoVAZ, retired after leading the company for 17 years. His
departure comes at a time when Russia's car industry is struggling to compete against a wave of
foreign-made cars.
Nothing symbolizes the challenges facing the industry more than AvtoVAZ. With 145
kilometers of production lines, 100,000 workers, and production of around 700,000 Lada cars a
year—some 70% of all Russian car production—its Toliatti-based plant in southern Russia is one of
the largest car factories in the world. Despite their reputation for somewhat shaky reliability, Ladas
are still popular in Russia, where they retail for as little as $4,000. AvtoVAZ retains a 40% market
share in its home market, and last year the company turned a profit of $147 million on revenues of
$5.57 billion.
The bad news is that unless the company can somehow modernize to face an influx of
foreign competition, AvtoVAZ will find it ever harder to stay afloat. "If AvtoVAZ fails to attract a
foreign partner who will bring new technology or a new model, I don't see a future for this
company," says Natalia Zagvozdina, analyst at Moscow investment bank Renaissance Capital.
Despite booming demand for cars, production of Russian-designed models this year is expected to
slump, thanks to Russian consumers' growing love affair with foreign designs. According to
Moscow investment bank United Financial Group, AvtoVAZ' production will drop 4% this year,
with profits falling 34%. In years to come, AvtoVAZ is set to face ever greater competition from
foreign producers, who are increasingly setting up manufacturing plants within Russia itself. Since
2002, Ford, General Motors, and Renault have established factories in Russia, and Toyota,
Volkswagen, and DaimlerChrysler are expected to follow in the coming months.
The Russian government is keen to encourage them. After years of protecting the local car
industry through prohibitive tariffs, it has recently slashed the tariff on imported сomponents from
between 5% and 10% to between zero and 3%. By 2010 foreign manufacturers are forecast to
produce 900,000 cars in Russia, up from 165,000 last year.
True, AvtoVAZ is doing its best to fight back. This year saw the launch of the compact
Lada Kalina, which includes features such as antilock brakes, power steering, and air conditioning,
all rarities in previous Russian models. AvtoVAZ even built an entirely new factory, equipped with
state-of-the-art facilities and employing all new staff to build the Kalina. "Our company is doing
everything possible to increase the competitiveness of our products," says marketing director
Alexander Bredikhin.
17
Slow off the mark
SO FAR THE KALINA, which retails for around $8,000, is finding buyers. But many
industry experts are skeptical. "Alas, the quality still leaves a lot to be desired," says Leonid
Golovanov from Avto-review, a Russian automotive magazine. "The problem is that the car is still
built on the basis of an old platform, with an old engine, gearbox, and so on."
Analysts say that AvtoVAZ is hamstrung by an inability to bring new designs to market in
time. The Kalina was originally designed in the early nineties, but its launch was repeatedly delayed
because of production difficulties. Some analysts say AvtoVAZ should be thinking about
assembling foreign-designed autos, an idea that is anathema to patriotic managers of the old school,
who are proud of Russia's tradition of locally designed cars.
It's an open question whether the departure of Kadannikov will cause AvtoVAZ to shift
gears. Analysts say the company's management is split between traditionahsts of the Kadannikov
mold, and younger, more aggressive types. "They should cut personnel by 50%, let a lot of
management go, and really look hard for a foreign partner to produce something in demand," says
Zagvozdina. That may be a lot to ask. But without a bold new vision, the clock is ticking for
Russia's proud carmaker.
VOCABULARY:
TRANSLATION NOTES:
speculation - предположение(я), догадка(и)
Это слово можно отнести к «ложным» друзьям переводчика, т.к. помимо значения
спекуляция оно имеет значение предположение, догадка. (См. часть Ш, раздел 2 ,§1,
п.1.6)
production will drop 4% this year, with profits falling 34% - в этом году производство
сократится на 4%, причем объем прибыли уменьшится на 34% (См. часть Ш, раздел
3, § 6, п.6.3)
18
описательным путем. Предмет или обстоятельство, совокупность предметов или
обстоятельств, помогающих совершить действие.
facilities for transport – средства передвижения
facilities for studies – необходимые помещения и оборудование
19
to piracy. Despite legal moves against individuals who share music files on the web, sales are set to
fall again this year.
Though Mr Stringer’s success in Hollywood may not qualify him to run a sprawling
conglomerate that still derives the bulk of its revenues from electronics, a dose of foreign
management might go down well at Sony. It worked at Nissan, where Carlos Ghosn, a Brazilian-
born Frenchman, turned the struggling Japanese carmaker into a hugely profitable concern.
Ultimately, Sony may have to decide whether it is an electronics firm or a media company.
Rumours have abounded that Mr Stringer is planning to spin off Sony’s entertainment division. That
might not be a bad start.
VOCABULARY:
tenure - срок пребывания ( в должности )
up-market (high end of the market) - элитный рынок, рынок богатых потребителей
fiscal year (financial year) - отчётный или финансовый год (условный год, связанный
с финансовой деятельностью; во многих странах начинается 1 апреля текущего года и
кончается 31 марта следующего года; в США - с 1 октября по 30 сентября)
losses – убытки
TRANSLATION NOTES:
it may well suffer another loss – вполне возможно, что компания понесет новые (еще
большие) убытки…
Слово another часто переводится не как другой, а как ещё один, очередной и т.д.
После модального глагола (перед основным) наречие well переводится как вполне.
Сравните:
This work may well be done next week. – Эта работа вполне может быть сделана на
следующей неделе. (См. часть Ш, раздел 3, §9, п.9.6)
music and films contributed some 40% of group operating profits – 40% операционной
прибыли группы компаний получено за счет деятельности музыкального
подразделения, а также подразделения, занимающегося кинопродукцией (См. часть
Ш, раздел 2 ,§ 4)
20
VOCABULARY CHECK
1) Экономика как наука изучает то, как люди осуществляют выбор среди
ограниченных ресурсов, которые могут использоваться для производства различных
товаров и услуг с их последующим распределением и потреблением, с целью
удовлетворения неограниченных потребностей.
2) Микроэкономика изучает поведение отраслей, фирм, домохозяйств, а
также ситуации, которые возникают на отдельных рынках или в отраслях.
3) Макроэкономика имеет дело с экономикой в целом, анализирует
изменение общего объема производства и то, каким образом в стране происходит
распределение ограниченных ресурсов земли, труда и капитала.
4) Величина предложения - количество товара или услуги, которое
производители готовы поставить по конкретной цене в течение определенного
периода.
5) Конгломерат объединяет предприятия, принадлежащие различным
отраслям экономики.
6) ТНК – крупные компании, деятельность которых осуществляется в
разных странах мира.
7) Рыночная экономика основывается на принципе свободного
предпринимательства.
LEAD-IN
There are many types of businesses, and, as a result, businesses can be classified in many
ways. One of the most common focuses on the primary profit-generating activities of a business, for
example:
Companies that make physical goods, such as cars or pipes, are considered manufacturers.
Service businesses offer intangible goods or services and typically generate a profit by
charging for labour or other services provided to other businesses or consumers. Organizations
ranging from house painters to consulting firms to restaurants are types of service businesses
21
Retailers and distributors act as middle-men in getting goods produced by manufacturers
to the intended consumer, generating a profit as a result of providing sales or distribution services.
Most consumer-oriented stores and catalogue companies are distributors or retailers.
Agriculture and mining businesses are concerned with the production of raw material,
such as plants or minerals.
Financial businesses include banks and other companies that generate profit through
investment and management of capital.
Information businesses generate profits primarily from the resale of intellectual property
and include movie studios, publishers and packaged software companies.
Utilities produce public services, such as heat, electricity, or sewage treatment, and are
usually government chartered.
Real estate businesses generate profit from the selling, renting, and development of
properties, homes, and buildings.
Transportation businesses deliver goods and individuals from location to location,
generating a profit on the transportation costs.
Businesses can be divided into two main types: private and state-owned.
When a private company is bought by the state and brought into the public sector, it is
nationalized in a process of nationalization. A nationalized company is state-owned.
When the state returns a company to the private sector in a sell-off, it is privatized. This is
privatization.
Companies can be classified according to capital structure organisation. The most popular
type is joint stock companies. There are more sole proprietorships and partnerships, but joint stock
companies are bigger and produce a larger proportion of total output.
There are two types of joint-stock companies:
A private limited company is usually the smaller of the two types. It can range from a
small family business, with just a few shareholders, to much larger companies. The shares of the
company are not freely available for purchase by the general public.
22
A public limited company (plc) is a company whose shares must be freely available for
purchase by the general public on a stock exchange. The company must have £50 000 worth of
capital when it is formed.
Joint stock or equity is basic capital on which the company is set up. People sharing the
stock or holding shares are called shareholders.
Stock is a share in the ownership of a company. Stock represents a claim on the company's
assets and earnings. As you acquire more stock, your ownership stake in the company becomes
greater. Whether you say shares, equity, stocks, or stock, it all means the same thing.
Another extremely important feature of stock is its limited liability, which means that, as
an owner of a stock, you are not personally liable if the company is not able to pay its debts. Other
companies such as partnerships are set up so that if the partnership goes bankrupt the creditors can
come after the partners (shareholders) personally and sell off their house, car, furniture, etc.
Owning stock means that, no matter what, the maximum value you can lose is the value of your
investment. Even if a company of which you are a shareholder goes bankrupt, you can never lose
your personal assets.
Ownership in the company is determined by the number of shares a person owns divided
by the total number of shares outstanding. For example, if a company has 1000 shares of stock
outstanding and a person owns 50 of them, then he/she owns 5% of the company. Most stock also
provides voting rights, which give shareholders a proportional vote in certain corporate decisions.
Controlling interest (controlling stake; majority ownership; majority stake) is the
ownership of more than 50% of a company's voting stock; or a significant fraction, even if less than
50%, if the rest of the shares are not actively voted. Likewise, minority ownership (minority stake)
is the ownership of less than 50% of a corporation's voting stock, or not enough ownership to
control company operations.
Two or more companies may decide to work together by setting up a joint venture or
alliance in which each holds a stake.
A holding or holding company is a corporation that owns enough voting stock in another
firm to control management and operations by influencing or electing its Board of Directors. A
company for which a majority of the voting stock is owned by a holding company is called
subsidiary.
A holding company’s relationship to its subsidiaries is that of parent company, and the
subsidiaries’ relationship to each other is that of sister companies. A holding and its subsidiaries
form a group.
23
VOCABULARY
manufacturer - изготовитель, производитель; фирма-производитель;
manufacturing firm производственная фирма, фирма-производитель;
manufacturing company предприятие обрабатывающей промышленности
service businesses -предприятия (компании) сферы обслуживания
service company (рестораны, магазины, парикмахерские, банки, учебные
service firm заведения)
retailer - розничный торговец (индивидуальный
предприниматель или компания, продающая
потребителям товары и услуги, предназначенные для
личного пользования, последнее звено в каналах
распределения, связывающих производителей и
покупателей)
distributor - агент по продаже; оптовый торговец
mining - разработка месторождения; добыча полезных
ископаемых
financial businesses - компании, занимающиеся финансовыми операциями
utilities - коммунальные предприятия: предприятия, компании и
корпорации, занятые оказанием коммунальных услуг
(водоснабжение, канализация, электроснабжение и т. п.)
real estate - недвижимое имущество, недвижимость
transportation - перевозка, транспортировка
industry (uncountable) - промышленность, индустрия, производство
an industry (countable) - отрасль промышленности
industries - различные отрасли промышленности
sector - отрасль промышленности; сектор (экономики, рынка)
public sector - государственный сектор
private sector - частный сектор
service sector - сфера услуг, сфера обслуживания
manufacturing sector - обрабатывающая промышленность
agricultural sector - агропромышленный комплекс
nationalized - национализированный, государственный
privatized - приватизированный, частный
state-owned - государственный
sell-off - распродавать (имущество, компанию)
joint stock company - акционерная компания; акционерное общество (АО)
создаваемое на основе долей собственности в капитале,
представленными количеством акций в руках каждого
акционера (Великобритания)
sole proprietorship -индивидуальное частное предприятие: организационная
форма предпринимательской деятельности одного лица
(амер.)
partnership - товарищество: организационная форма
предпринимательского объединения двух или более
частных лиц, не являющаяся корпорацией
private limited company - частная компания с ограниченной ответственностью
(компания с числом акционеров от двух до пятидесяти,
ограниченным правом передачи акций, невозможностью
выпуска акций и облигаций на свободный рынок,
ограничением ответственности акционеров вложенным
ими капиталом; после названия обычно пишется
24
сокращение "Ltd.")
public limited company (plc) - открытая акционерная компания, акционерное
общество открытого типа
В американском праве основными формами субъектов
предпринимательской деятельности являются: sole
proprietorship, partnership, business corporation; в
английском праве различают две основные формы:
partnership и company
equity - собственный (акционерный) капитал: капитал,
shareholders' equity сформированный компанией за счет размещения акций
share capital
joint stock
shareholder - акционер, владелец акций, пайщик
stake - доля, часть, участие (в капитале компании), ставка
shares, equities, stocks, stock - акции
limited liability - ограниченная ответственность
shares outstanding - акции в обращении (на руках у акционеров);
выпущенные и находящиеся в обращении акции
controlling interest - контрольный [мажоритарный] пакет акций (участие в
controlling stake капитале компании, дающее право контроля за ее
majority ownership деятельностью; обычно считается, что для контроля
majority stake необходимо владеть более чем 50% голосующих акций,
но при наличии множества мелких акционеров для
эффективного контроля может быть достаточно и 20-
30% )
minority ownership - второстепенное участие в капитале (меньшая доля);
minority stake миноритарный [неконтрольный] пакет акций
joint venture - совместное предприятие, совместная деятельность
alliance - союз, соглашение
holding company - холдинговая компания (компания, владеющая
крупными пакетами акций других компаний; в
большинстве случаев имеет решающее право голоса,
действуя посредством механизма контрольного пакета
акций)
parent company - материнская компания (компания, контролирующая
одну или несколько неконсолидированных дочерних
компаний через контрольный пакет акций; в отличие от
чисто холдинговой компании сама осуществляет
конкретную производственную деятельность)
subsidiary - дочерняя компания (юридически самостоятельное
предприятие, контрольный пакет акций или уставной
капитал которой принадлежит другой - материнской -
компании)
sister (brother) company - филиал компании (названия дочерних компаний, когда
речь идет о взаимоотношениях между ними)
group - группа, объединение компаний, концерн
COMPREHENSION QUESTIONS:
1) How can businesses be classified?
25
2) What is the difference between a private limited company and a public
limited company?
3) What does limited liability mean?
4) How is the ownership in the company determined?
5) What is controlling interest? minority stake?
6) What does a holding refer to?
7) What is a subsidiary?
VOCABULARY PRACTICE
Technology stocks fell sharply today.(седня акции HT компаний сильно упали в цене)
Smaller plcs are worried about the effect of the new legislation.(обеспокоены
последствиями)
Many young workers (специалисты) are taking jobs in the rapidly growing service sector
– banking (банковское дело), computer programming, financial services.
British Rail stations worth about $12 billion will be sold off under Government plans to
privatize the network.
McPherson always takes a majority stake in the business he invests in and he likes a
hands-on role in the management. (он предпочитает непосредственное участие у
управлении компанией)
For most companies there are two types of equity: ordinary shares and preference shares.
TEXTS TO TRANSLATE:
4. Carmakers Eye Romania Factory
Renault, the French carmaker, and its Japanese partner Nissan have expressed interest in
buying a former Daewoo car factory in Romania from the government.
Renault wants to use the plant, in Craiova, to expand production of its Dacia Logan saloon,
after the Romania-built car proved an unexpected success.
The two companies signed a joint letter of intent on Wednesday with the Romanian
privatisation agency, giving them access to more data on the factory.
26
The Romanian state has a controlling interest in a holding company that owns 49 per cent
of the plant, and wants to buy the 51 per cent held by Daewoo Motor, the bankrupt South Korean
carmaker.
"This letter indicates that the alliance [of Renault and Nissan] is interested in obtaining
more information on the site in order to determine if it will respond to the call for tenders," Renault
said.
It is not clear which models Nissan would build at the plant, but the company is trying to
expand in eastern Europe, and Romania would provide it with a low-cost manufacturing location.
Nissan has factories in Sunderland in north-east England and in Barcelona, Spain.
The possible bid comes as Renault is considering how to increase output of the Logan from
its Dacia factory in Pitesti, Romania.
Dacia had already sold 110,000 Logans by the end of October, well ahead of the 100,000
planned.
The low-cost car was designed for emerging markets but has been surprisingly successful
in France, Germany and Spain, selling 7,429 in the first two months it was on sale.
Renault needs to expand rapidly to meet its goal of selling 4m cars in 2010, up from 2.5m
last year. It is relying on Dacia to provide a large chunk of this growth, with long-term goals of sell-
ing 700,000, up from the 500,000 originally planned.
Daewoo invested 1800m to modernise the Romanian factory, in 1994 as the South Korean
company was aggressively expanding worldwide.
The plant has continued to build several Daewoo models, including the Matiz, under
licence from GM Daewoo, the General Motors-controlled company which bought most of Daewoo
Motors' assets in 2002.
The plant has 3,600 staff and has survived the bankruptcy of its parent through a network
(благодаря) of Romanian dealers which makes it the country's second-biggest selling brand.
But its licence to make Daewoo cars expires in January, making a sale urgent.
VOCABULARY:
expand - расширять(ся), увеличивать(ся) в объеме; развивать(ся)
27
tender - предложение (письменное), заявка (на торгах), оферта, тендер
TRANSLATION NOTES:
bid - предложение (о заключении контракта; купить ценные бумаги; купить акции
другой компании); заявка (на участие в конкурсе на право получения контракта, реализации
проекта и т. п.)
Слово bid входит в целый ряд сочетаний, перевод которых на русский язык следует
осуществлять в зависимости от контекста:
higher bid – более высокая предлагаемая цена (обычно на аукционах)
bid and offered price – цена продавца и покупателя
bidder – покупатель, участник торгов
bid market – рынок покупателя
bid price – цена покупателя
in a bid to do smth – в попытке сделать что-л
28
A sale of Swisscom could raise about SFr17bn ($12.9bn) for the government, based on the
current share price of about SFr420. Swisscom shares were down 0.65 per cent at SFr420.50 at the
close. However, analysts warned that Switzerland's complex political system meant a sale was not
certain - and would certainly not be fast. Any reduction of the state's stake to below 50 per cent
would require a change to the country's telecoms law.
While disposal has been welcomed by the centre-right Radicals and the uitra-nationalist
Swiss People's party, it has been opposed by the Socialists and the Christian Democrats.
Even if parliamentary approval was given, the controversial move would almost certainly
be subject to popular referendum. With the prospect of job cuts and changes to service standards, let
alone the risk of takeover by a bigger foreign operator, popular approval would not be certain,
analysts said.
Government officials said the aim was to complete parliamentary preparations, with a view
to presenting legislation the following year. Allowing another year for a referendum, that meant a
full sale might not be possible before 2008, said officials.
Reducing or even eliminating the state's stake could benefit Swisscom's expansion plans.
One important handicap in last year's abortive talks with Telekom Austria, which has been
largely privatised, was that the target company would be acquired by a state-controlled group -
reversing the Austrian government's privatisation policies.
The Swiss government said the federal finance ministry would be asked to prepare the
requisite legislation.
The government said selling the stake would remove business uncertainties and eliminate
any conflict of interest between its role as main shareholder and ultimate regulator of the telecoms
sector.
Swisscom was floated in October 1998. While it has enjoyed significant profits from its
home market, attempts to expand abroad have proved less successful.
VOCABULARY:
takeover - поглощение
Swisscom ..has been tipped as a possible bidder for …Компания «Свисском» считается
возможным претендентом на покупку компании…
raise money, funds, capital, cash – мобилизовать, собрать денежные средства, фонды,
капитал, наличные средства
analysts – аналитики
29
let alone - не говоря уж о …
TRANSLATION NOTES:
While disposal has been welcomed…
Союз while, как и другие служебные слова, при переводе требует контекстуального
осмысления, т.к. может переводиться самым различным образом: пока, хотя,
несмотря на, и, а и т.д. В данном случае его следует перевести словом хотя. (См.
часть Ш, раздел 3, § 9, п.9.2)
be subject to
Составной предлог subject to как часть составного сказуемого после глагола to be
выражает ограничение и переводится как подлежащий чему-л, подчиняющийся чему-л
в зависимости от контекста
30
Siemens' major lines in China are industrial automation, power-generation and
transmission, and telecoms infrastructure.
Its transport business received a major boost with the announcement in November that it
had won the tender to build 60 high-speed trains with its Chinese joint venture partner, an order
worth €688m, for the Beijing-Tianjin line.
Siemens is hoping the tender will position it for a larger order of trains for the Shanghai-
Beijing line, a contract some commentators have suggested the group's highly competitive Japanese
rivals would be excluded from for political reasons. But Mr Hausmann discounted this, saying: "I
think on the surface it looks political but at the end of the day, it's about performance."
One sector with less stellar results has been automotive parts and systems, where Siemens
has suffered from its reliance on VW, the German carmaker, which has lost market share in China.
Siemens also expects a boost when the Chinese government makes a long-awaited
announcement of licences for 3G mobile technology.
Despite its rapid growth, China still represents only about 6-7 per cent of Siemens' global
sales, but it is substantially more important for the company's worldwide sourcing operations.
VOCABULARY:
double-digit growth – рост свыше 10%
rival(s) – конкурент(ы)
31
TRANSLATION NOTES:
VOCABULARY:
subsidiary - "дочерняя" компания
32
unit (in a company) – отдел, отделение, подразделение компании; слово имеет
широкий синонимический ряд – arm, division, branch, department, a business
TRANSLATION NOTES:
HSBC Holdings plc – одна из крупнейших в мире организаций по предоставлению
банковских и финансовых услуг со штаб-квартирой в Лондоне. Основана в 1865 году
для финансирования растущей торговли между Китаем и странами Европы, чем
объясняется её название - Hong Kong and Shanghai Banking Corporation Limited.
Its shares have outperformed…. – Цены её акций превысили цены акций других
компаний… (Сравните: the goods were outpriced from the market… - эти товары были
вытеснены с рынка из-за ценовой конкуренции…)
VOCABULARY CHECK
1) В американском праве основными формами предпринимательства
являются индивидуальное частное предприятие, товарищество, корпорация.
2) Коммунальные предприятия предоставляют такие услуги как
теплоснабжение, обеспечение электроэнергией, водоснабжение.
3) Компании, занимающиеся недвижимостью, получают прибыль от
покупки, продажи, сдачи в аренду помещений.
4) Национализированная компания является государственной.
5) Компания, число акционеров которой насчитывает от двух до
пятидесяти, акции которой недоступны для покупки широкой публикой, является
частной компанией с ограниченной ответственностью.
6) Акции открытой компании с ограниченной ответственностью находятся
в открытой продаже на фондовой бирже.
7) Акционерный капитал большинства компаний подразделяется на
обыкновенный и привилегированный акционерный капитал.
8) Собственный капитал может иметь форму наличных денежных средств
или таких активов, как здания, торговые площади, транспортные средства.
33
9) Дочерняя компания - самостоятельное предприятие, контрольный пакет
акций которой принадлежит материнской компании.
10) Правительству принадлежит контрольный пакет акций этой компании.
11) Правительство уменьшило свою долю в капитале этой фирмы со 100%
до 72%.
SECTION 3 RESTRUCTURING
LEAD-IN
Every company tries to take advantage of current opportunities targeting different goals. In
the process of restructuring it can aim at profit increase, building up its geographic scope, product
differentiation, acquiring breakthrough technology and so on. There are several ways of improving
the performance of the company: internal development; scope contraction (divestment, spin-offs,
LBOs, MBOs); scope expansion (mergers and acquisitions or strategic alliances).
A group containing many types of business is diversified. A group’s basic business
activity, perhaps the one it originally started with, is its core business. The branch or division of a
company that creates profits individually and separately from the main organization may be viewed
as profit centre.
Businesses are often encouraged to concentrate or focus on their core activities and sell
off, spin off, or dispose of non-essential assets. These assets are often referred to as non-core
assets. A sale of assets in this way is referred to as a sell-off, spin-off, or disposal.
To divest means to sell off. Often referred to in the context of a company selling off
divisions that are either a poor fit within the overall corporate strategy, or showing poor financial
performance.
If you pull out of business activity, you abandon it, perhaps as part of a programme of
restructuring or rationalization: reorganizing a business with the aim of making it more efficient
and profitable.
In the process of restructuring companies can use such forms as: LBOs and MBOs.
Leveraged buyout, or LBO is a strategy involving the acquisition of another company
using borrowed money (bonds or loans). The acquiring company uses its own assets as collateral
for the loan in hopes that the future cash flows will cover the loan payments. There is usually a ratio
of 90% debt to 10% equity. Because of this high debt/equity ratio, the bonds are usually not
investment grade and are referred to as junk bonds.
34
The degree to which an investor or business is utilizing borrowed money is called
financial leverage. Companies that are highly leveraged may be at risk of bankruptcy if they are
unable to make payments on their debt. They may also be unable to find new lenders in the future.
Management buy-out or MBO is the situation when the managers and/or executives of a
company purchase controlling interest in a company from existing shareholders. In most cases, the
management will buy out all the outstanding shares and then take the company private because it
feels it has the expertise to grow the business better if it controls the ownership. Quite often,
management will team up with an organization providing finance in the form of venture capital
because it's a complicated process that requires significant capital.
VOCABULARY
-организационная рационализация;
restructuring, rationalization
усовершенствование: перестройка деятельности
компании в целях повышения ее эффективности и
прибыльности (напр. слияние части подразделений,
продажа второстепенных производств и дочерних
компаний, концентрация на определенных видах
деятельности)
divestment - дробление компании (продажа подразделения или
divestiture дочернего предприятия для аккумулирования
финансовых ресурсов); “отпочкование”
(преобразование подразделения компании в отдельное
юридическое лицо с выделением части акций на
пропорциональной основе)
divest , sell off, spin off, - распродавать (дочерние компании); ликвидировать,
dispose of приостанавливать (инвестиции); изымать капитал
sell-off, spin-off, disposal - "отпочкование"; передача; отделение; создание
другой фирмы путем отделения
35
leveraged buyout, LBO - выкуп за счет кредита: покупка контрольного пакета
акций корпорации, финансируемая выпуском новых
акций или с помощью кредитов, которые должна
погасить сама корпорация (обеспечением служат ее
активы)
financial leverage - финансовый рычаг [левередж] (рассчитывается как
отношение заемного капитала к собственному
капиталу; характеризует интенсивность
использования заемных средств)
leveraged company - компания с заемным капиталом, компания, частично
финансируемая за счет заемных средств
high-leverage firm, - фирма с высокой долей заемного капитала (со
highly leveraged company значительными долговыми обязательствами)
collateral - обеспечение, залог
debt/equity ratio - соотношение заемных и собственных средств
(отношение суммы краткосрочных обязательств и
долгосрочных заимствований к собственному
капиталу; чем выше этот коэффициент, тем меньше
защита кредиторов и больше финансовый риск)
investment grade - инвестиционный уровень (обобщающее понятие,
характеризующее наивысшие кредитные рейтинги,
присваиваемые долговым обязательствам и
заемщикам)
junk bonds - "бросовые облигации": высокодоходные облигации
корпорации с кредитным рейтингом ниже
инвестиционного уровня; обычно выпускаются
молодыми компаниями без солидной деловой
репутации, часто используются при проведении
поглощений и выкупов.
management buy-out, MBO - внутренний управленческий выкуп: покупка
компании или части компании группой ее
управляющих
venture capital - рисковый капитал, венчурный капитал, (капитал,
вкладываемый в проекты, которые из-за своей
новизны отличаются особенно высокой степенью
риска и которые не удается финансировать с помощью
традиционных средств внешнего финансирования)
COMPREHENSION QUESTIONS:
1) What can a company aim at in the process of restructuring?
2) What are the ways of improving the performance of the company?
3) What is referred to as core business? profit centre?
4) What terms do we use when we speak about a sale of assets?
5) What does LBO involve?
6) What is the usual debt-to-equity ratio in LBOs?
7) When and why is venture capital used?
36
VOCABULARY PRACTICE
Since taking over at Nokia two years ago, Mr Ollila has set about completing the
company’s transformation from a sprawling industrial conglomerate to a group focused on
telecommunications and electronics. More than 60% of group sales is accounted for by its
telecommunications divisions.
After a promise to shareholders that it would return to its core photographic and health
businesses, Eastman Kodak is to spin off its $4billion chemical subsidiary, the tenth largest in the
United States, by the end of the year.
An example of a solid company that seems to have thrived on the strength of junk-bond
financing is FMC Corp., which makes armored vehicles and other military equipment. Last year the
company, its shareholders and employees bought out its stock in a leveraged buy-out financed by
junk.
RJB Mining was the subject of a management buy-out last year that left Mr Budge and
other directors in control of 25% of the equity, with the remainder in the hands of venture capital
groups led by Schroders.
Turnover fell by 9% to $1.97 billion mainly because of divestments. The group said a
further 17 non-core businesses had been sold during the year, and the disposal programme was
now complete.
TEXTS TO TRANSLATE:
8.Hidden Value Let Loose
Chipmaker Freescale, spun from Motorola, is a prime example of the power of spin-
offs
When MOTOROLA Inc. moved to spin off its $5.7 billion semiconductor business the
newly launched company, Freeseale Semiconductor Inc., got no respect. Freescale shares made
their debut at a limp $13, trading at less than 50% of the valuation accorded larger rival Texas
Instruments Inc.
Investors had lots of reasons to be skeptical. Freescale's business under Motorola had piled
up hundreds of millions in losses in the early 2000s. Despite a massive restructuring, the unit was
operating on razor-thin margins in hyper-competitive chip markets where it seemed to have lost its
innovation edge.
But those who didn't pay up for the stock were dead wrong. Just 15 months later,
Freescale, which supplies embedded chips and software for wireless handsets and automobiles, is
one hot tech company. Earnings jumped threefold in the latest quarter to $164 million on sales of
$1.4 billion. Its stock, at $23, is up more than 70% from its starting point.
How did the smart-money folks so badly underestimate Freescale? Given Motorola's
troubled history, investors expected little from the spin-off. They also failed to appreciate the talents
37
of Freescale's new CEO, Michel Mayer. And perhaps most important, they discounted the value that
a properly executed spin-off can create. Of the 17 deals last year, 13 have beaten the Standard &
Poor's 500-stock index by a wide margin.
While disastrous spin-offs such as Delphi Corp. and Visteon Corp. may grab big headlines,
many of the deals often result in far stronger businesses. That fact, in tandem with Wall Street's
distaste for conglomerates, has a lot of CEOs becoming believers in the magic of spin-offs. Ameri-
can Express Co.'s Kenneth I. Chenault just set loose Ameriprise Financial Inc., its financial
advisory business. Henry R. Silverman plans to divide Cendant Corp. into four companies next
summer. And Sumner M. Redstone is working on a scheme to split CBS and Viacom Inc. by the
end of this year. "Spin-offs usually create huge value because a business goes from being the
redheaded stepchild in a large company to a business being run for its own interests," says Cornell.
The decision to send a division off on its own isn't an easy one for most companies, and it
wasn't for Motorola. The unit had been part of the company for 50 years, and its 22,000 employees
were "family," recalls one insider. Then there was the matter of a customer-supplier relationship—
Motorola accounts for about 25% of Freescale's revenues. Some execs worried that it would be a
mistake to give up an integral part of the parent's innovation pipeline. Yet pressure grew from Wall
Street and the board to delink so that Motorola could focus on its core markets.
A team of top managers and directors considered the options, including the outright sale of
its subsidiary or a carve-out that would sell just part of Freescale to the public. The final decision -
probably the most critical to Freescale's ability to prosper - was to make a clean ownership break by
distributing all Freescale shares to Motorola stockholders.
That was key, because it meant Motorola was strongly motivated to craft a deal that would
make Freescale totally independent and give it the resources to be a muscular player in its markets.
Motorola needed Freescale to be strong so it could continue as a strategic supplier of parts for
handsets and networking products. "This was about creating value by making Freescale a
sustainable, independent company," says Donald F. McLellan, Motorola's vice-president of mergers
and acquisitions. As a freestanding company, Freescale should be able to win new customers -
especially in the wireless arena, where giants like Nokia Corp. and Samsung Electronics could be
reluctant to do business with a supplier owned by a rival.
VOCABULARY:
discount – зд. не принимать в расчет
38
account for – являться причиной; составлять долю
pipeline - зд. ресурс; ожидаемые новые поступления; продукция, которая будет вот-
вот выпущена
in the pipeline – на подходе; в работе
TRANSLATION NOTES:
razor-thin margins – минимальная (очень низкая) прибыль
39
domestic overhaul three years ago, Philip Morris plans to close several plants and consolidate sales
and administrative functions abroad, shrinking its international food work force by about 8%.
Annual savings from the restructuring, which the company said could approach $200
million, will be reinvested to increase "competitiveness and focus in core international food
categories and markets," the company said.
Philip Morris's moves also resulted from a loosening of labor restrictions in Europe, as
well as the region's gradual transformation into a more unified market, analysts said.
"New opportunities are opening up in Europe, as the European community allows for more
efficient manufacturing and distribution," said Goldman Sach's Nomi Ghez, who noted that
companies like Kellogg Co. and Unilever PLC recently have consolidated their European
operations.
Although a spokesman declined to specify where the cuts might take place, analysts
believe nearly all the restructuring will take place in Europe, which is responsible for about 65% of
the unit's revenue.
Philip Morris is often cited for its widespread international presence, yet most of its
tobacco and food revenues are generated in Europe. Roughly 15% of the international food unit's
sales come from Asia.
In the first nine months, Philip Morris said, the unit continued to be hurt by a steep run-up
in coffee commodity prices earlier in the year. Although commodity prices subsequently dropped,
the company said third-quarter volumes were depressed by consumers' response to higher retail
prices and by trade destocking. It blamed lower confectionery volumes partly on "exceptionally
warm weather" in Scandinavia. The international food unit also is suffering indigestion from a
recent binge on European candy companies. Since 1990, the company has spent more than $5.6
billion snapping up such chocolate giants as Jacobs Suchard AG and Freia Marabou AS. But the
European candy market has been sluggish at best.
VOCABULARY:
unfavorable currency translations – зд. невыгодный валютный курс
40
TRANSLATION NOTES:
Philip Morris … will take a $630 million pretax charge… – Компания Филип Моррис
выделит 630 млн долларов из общей суммы доходов до вычета налогов…
Philip Morris's moves also resulted from a loosening of labor restrictions in Europe, as
well as the region's gradual transformation into a more unified market, analysts said.
Перевод данного предложения лучше начать с конца, т.к. это в большей степени
соответствует порядку слов, типичного для русского текста: По мнению
специалистов… (См. часть Ш, раздел 3, §2)
… the unit also is suffering indigestion from a recent binge on European candy
companies … - это подразделение испытывает трудности и в связи с его недавними
крупными слияниями и поглощениями европейских компаний, производящих
сладости…
Язык английской прозы более эмоционален, нежели русский, поэтому при переводе
часто утрачивается образность отдельных слов, как, например, в данном предложении
при переводе слов indigestion (несварение желудка, нарушение пищеварения) и binge
(кутёж, чрезмерное употребление, пристрастие к ч-л). Поэтому перевод звучит не
столь образно, как оригинал. Выбор лексики не случаен и многое говорит о
положении дел в компании.
Сравните: When Ann is depressed she binges on chocolates. (См. часть Ш, раздел 2, §5)
41
10. Japanese May Aid Chemicals Industry
Japan’s ailing petrochemical industry may be offered fiscal incentives to encourage
rationalization.
A strong possibility exists that tax exemptions, interest-free loans and other incentives
could be offered to the industry in an effort to help restructuring, said Mr Hajime Furuta, director of
the basic chemicals division of Japan’s Ministry of International Trade and Industry.
Restructuring was needed because the Japanese petrochemicals industry was weak and
uncompetitive, added Mr Furuta, in London for the Financial Times conference on petrochemicals.
The plight of the Japanese industry, the world’s second largest after that of the US, with an
annual turnover of nearly $65bn was worse than in the last recession 10 years ago.
Consumer demand seemed saturated and the inventory adjustment would last longer than
during the last recession. Raw material prices were lower this time.
The industry had severe structural problems because of excessive competition. The sector
was highly fragmented, with 12 ethylene manufacturers. The largest had 12 per cent of the market
and the smallest 6 per cent.
Alliances and other forms of cooperation were needed, with both domestic and foreign
partners.
In the scramble for market share, excess capacity had been built up. Annual Japanese
production next year would be 7.3m tones, while demand would be 6m tones.
The industry was facing increased competition from other Asian producers, especially
South Korea. Miti estimates a global oversupply of ethylene of 5.2m tones a year. In addition, the
slowdown in the Japanese economy meant there was more than two months’ worth of stocks.
The industry’s profits last year had already fallen 45 per cent to under $80m. For the first
half of this year, the figures were worse, with profits down 80 per cent to $12m. Five ethylene
producers were in the red and others would follow.
There was no question of intervention. But Miti would try to act as a catalyst.
VOCABULARY:
fiscal incentives - меры по стимулированию (в данном случае – рационализации
отрасли) за счет средств государственного бюджета (в виде налоговых льгот,
послаблений, беспроцентных займов и т.д.)
42
incentive - поощрение, стимул, побуждение
intervention - вмешательство
TRANSLATION NOTES:
Japan’s ailing industry may be offered… - Возможно промышленности Японии,
испытывающей трудности, будут предложены….
Модальный глагол may в зависимости от контекста выражает либо позволение, либо
возможность совершения действия и тогда он переводится как «возможно»,
«возможно, что». (См. часть Ш, раздел 3, §3, п.3.1)
A strong possibility exists…, said Mr Furuta, director of the basic chemicals division of
Japan’s Ministry of International Trade and Industry. – По словам главы подразделения
Министерства Внешней торговли и Промышленности по производству базовых
химических продуктов Фуруты велика вероятность…..
В английском языке источник информации, обстоятельства места и времени, стоят в
конце предложения, в русском языке – в начале. (См. часть Ш, раздел 3, §2)
there was more than two months’ worth of stocks – количество запасов было
достаточно для бесперебойной работы в течение более двух месяцев
43
Основное широкое значение слова stock(s) – «материальная база». Перевод этого
слова на русский язык – «запас», «товар», «инвентарь», «акционерный капитал»,
«акции», «поголовье скота» - всегда необходимо давать по контексту. (См. часть Ш,
раздел 2, §4, п.4.1)
stock of goods – запас товаров
stock of orders – портфель заказов
stocks and bonds – акции и облигации
from stock – со склада
stock in transit – груз в пути
VOCABULARY CHECK
1) Существует несколько способов повышения эффективности
деятельности компании: внутреннее развитие, сокращение масштаба, увеличение
масштаба.
2) Отделившаяся от материнской компании фирма сконцентрировалась на
своем основном виде деятельности.
3) Центр прибыли - это подразделение компании, получающее прибыль
самостоятельно и независимо от деятельности основного подразделения.
4) Выкуп за счет кредита - покупка контрольного пакета акций компании,
финансируемая выпуском новых акций или с помощью кредитов, которые должна
погасить сама компания. Обеспечением служат ее активы.
5) Внутренний управленческий выкуп - покупка компании или части
компании группой ее управляющих.
6) Рисковый капитал в основном вкладывается в новые или
реорганизуемые компании, в том числе малые предприятия с высоким потенциалом
развития.
7) "Бросовые облигации" - высокодоходные облигации корпорации с
кредитным рейтингом ниже инвестиционного уровня.
8) Фирма, активно использующая заемные средства, может иметь высокую
рентабельность инвестиций (return on investment, ROI).
9) Прибыль компании за последний квартал выросла в 3 раза и составила
150 миллионов долларов при объеме продаж в 1,5 млрд.долларов.
44
SECTION 4 MERGERS AND ACQUISITIONS
LEAD-IN
Mergers and acquisitions and corporate restructuring - or M&A for short - are a big part of
the corporate finance world. Every day, Wall Street investment bankers arrange M&A transactions
that bring together separate companies to make larger ones
Although they are often uttered in the same breath and used as though they were
synonymous, the terms "merger" and "acquisition" mean slightly different things.
When a company takes over another one and clearly becomes the new owner, the purchase
is called an acquisition. From a legal point of view, the target company ceases to exist and the
buyer "swallows" the business, and stock of the buyer continues to be traded.
In the pure sense of the term, a merger happens when two firms, often about the same size,
agree to go forward as a new single company rather than remain separately owned and operated.
This kind of action is more precisely referred to as a merger of equals.
In practice, however, actual mergers of equals don't happen very often. Often, one
company will buy another and, as part of the deal's terms, simply allow the acquired firm to
proclaim that the action is a merger of equals, even if it's technically an acquisition. Being bought
out often carries negative connotations. By using the term "merger," dealmakers and top managers
try to make the takeover more palatable.
A purchase deal will also be called a merger when both CEOs agree that joining together in
business is in the best interests of both their companies. But when the deal is unfriendly, or hostile -
that is, when the target company does not want to be purchased - it is always regarded as an
acquisition.
So, whether a purchase is considered a merger or an acquisition really depends on whether
the purchase is friendly or hostile and how it is announced.
Takeovers happen over the objection of the board and usual procedure is through the
purchase of stock in the target company. Stock might be acquired through open market purchase,
private transactions or launching a bid (tender offers). When a takeover attempt runs into very
serious objections from the board of directors of the target company, it is referred to as a hostile
takeover.
The takeover process is often described in terms of one animal hunting another: a company
or individual seeking to take over another company may be referred to as a predator, and the target
company as the prey.
Predators are also referred to as raiders or corporate raiders.
45
The tender offer price may not be high enough for the target company's shareholders to
accept, or the specific terms of the deal may not be attractive. In a merger, there may be much at
stake for the management of the target - their jobs, in particular. So, if they're not satisfied with the
terms laid out in the tender offer, the target's management may try to work out more agreeable
terms that let them keep their jobs or, perhaps even better, send them off with a nice, big
compensation package. Board members worrying about losing their jobs as a result of a takeover
can contrive for themselves something known as a golden parachute.
A company wishing to resist, ward off, or fend off being taken over has a number of
options.
A poison pill scheme can be triggered by a target company when a hostile suitor acquires a
predetermined percentage of company stock. To execute its defense, the target company grants all
shareholders - except the acquirer - options to buy additional stock at a dramatic discount. This
dilutes the acquirer's share and intercepts its control of the company. A reduction in earnings per
share of common stock that occurs through the issuance of additional shares or the conversion of
convertible securities is dilution.
It may devise plans that give existing shareholders special rights, or it may make itself less
attractive to bidders by selling off a valuable part of the company, or holding on to an unattractive
one. The company’s additional defence measures are sometimes called shark repellent.
As an alternative, the target company's management may seek out a friendlier potential
acquirer, or white knight. If a white knight is found, it will offer an equal or higher price for the
shares than the hostile bidder.
Bidders may agree to withdraw their bid if paid enough money for the shares they hold in
the target company. This is greenmail. A spin-off of the term "blackmail", greenmail occurs when a
large block of stock is held by an unfriendly company or raider, who then forces the target company
to repurchase the stock at a substantial premium to destroy any takeover attempt.
VOCABULARY
mergers and acquisitions , M&A - слияния и поглощения
take over - поглощать
takeover - поглощение: покупка одной компанией
контрольного пакета акций другой компании
hostile takeover - враждебное поглощение: попытка получить
unfriendly takeover контроль над компанией путем скупки ее акций на
рынке против воли руководства или ведущих
акционеров этой компании
acquisition - приобретение; поглощение компании
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target company - компания-цель, компания-объект поглощения;
приобретаемая компания (компания, которая
является объектом попытки поглощения со
стороны другой компании)
merger - слияние или объединение компаний
friendly merger - дружественное слияние
hostile merger - враждебное слияние
tender offer - предложение о приобретении; тендерное
предложение: метод осуществления поглощения
через публичное предложение акционерам
поглощаемой компании купить их акции
takeover bid - предложение о поглощении: предложение о
покупке контрольного пакета акций, сделанное
акционерам поглощаемой компании другой
компанией
launch a bid - предпринять попытку поглощения, начать
скупать акции другой компании
predator - «хищник»: инвестор или спекулянт,
специализирующийся на извлечении прибыли из
ситуации, когда та или иная компания находится
под угрозой поглощения или просто в трудном
финансовом положении
prey - компания-жертва; добыча
raider - рейдер, "налетчик": физическое лицо или
corporate raider организация, потенциально способные поглотить
другие компании; рейд, "налет" осуществляется в
виде массированной скупки акций компании-
жертвы с целью получить контрольный пакет ее
акций
golden parachute - "золотой парашют": соглашение менеджера с
корпорацией, по которому, в случае увольнения
напр., после враждебного поглощения, менеджеры
должны получить крупные денежные суммы или
опционы на акции
ward off, fend off - предотвратить (удар, опасность); защитить
poison pill - "ядовитая пилюля", "отравленная таблетка":
любые методы борьбы с враждебным
поглощением компании; в случае попытки
враждебного поглощения компания-цель может
принять на себя обязательства, которые сделают
такую операцию чрезмерно дорогостоящей (напр.,
это может быть выпуск новых привилегированных
акций, погашаемых по высокой цене в случае
поглощения компании, дорогостоящая система
бонусов, др.)
dilute - разводнять: понижать ценность акций путем
увеличения их числа без соответствующего
увеличения активов компании
dilution - разводнение акционерного капитала, разводнение
stock watering акций: выпуск акций в сумме, не соответствующей
активам и потенциалу компании; отрицательное
воздействие дополнительного выпуска акций на
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благосостояние существующих акционеров,
проявляющееся в уменьшении величины прибыль
на одну акцию и снижении возможности влияния
на дела компании через участие в голосовании
акционеров)
shark repellent - "отрава для акул", "акулий репеллент": любые
меры по защите компании от недружественного
поглощения (напр., защитное слияние, поправки к
уставу компании, и т. п.); имеют целью сделать
компанию непривлекательной для "поглотителя"
white knight - белый рыцарь: дружественный инвестор,
который делает новое, более выгодное,
предложение о поглощении компании, уже
являющейся объектом попытки враждебного
поглощения со стороны черного рыцаря; это
поглощение согласовано с поглощаемой фирмой
greenmail - "зеленый [мягкий] шантаж": форма
вымогательства - лицо скупает достаточно
большое число акций компании, так что у ее
руководства возникает опасение, что компанию
перекупят, после чего лицо продает компании
скупленные акции по завышенной цене;
производное от green в значении "деньги" и
blackmail "шантаж"
COMPREHENSION QUESTIONS:
1) What is the difference between mergers and acquisitions?
2) What kind of action is referred to as a merger of equals?
3) What is a hostile takeover?
4) What kind of agreement may the target’s management try to work out?
5) What are the options of a company wishing to ward off being taken over?
6) What does dilution imply?
7) When does a target company look for a white knight?
8) What should a target company do if it comes up against greenmail?
VOCABULARY PRACTICE
The business was acquired from Orion four years ago.
Medeva, the fast-growing pharmaceuticals group, rose 19p to 224p on the news that it has
made another acquisition in America. Medeva is to buy Adams Laboratories, a Texas drugs
manufacturer, for $77.2 million.
48
White Knight - is a company (the “good guy”) that gallops in to make a friendly takeover
offer to a target company that is facing a hostile takeover from another party (a “black knight”).
The white knight offers the target firm a way out with a friendly takeover.
London Weekend Television’s attempt to attract a white knight to help it ward off the
unwanted takeover bid from Granada has collapsed. US West, the giant US telephone company and
one of the largest cable operations in the UK, was interested in a stake of 29.9 per cent in the
London ITV company – the largest amount possible without triggering a full bid.
Now that Oracle has more than 60% of PeopleSoft's outstanding shares the question is can
the PeopleSoft board of directors stop the hostile takeover? The answer is they probably can with a
poison pill tactic used by most companies, including Oracle, to prevent such a takeover. In
PeopleSoft's case it is called a Shareholder Rights Plan and gives the board, at their discretion, the
right to issue new shares of the stock. By distributing more shares and thus diluting the stock, it
becomes virtually impossible for Oracle to gain a majority ownership of the outstanding shares of
stock.
TEXTS TO TRANSLATE:
11. Olivetti on Verge of $60bn Bid for Telecom Italia
Olivetti, the Italian telecommunications group, is tomorrow set to launch a $60bn tender
offer to take control of Telecom Italia, the telecommunications giant, in the largest takeover bid in
Italy's corporate history.
The bid, expected to be announced at a board meeting in Milan, would mark the first
attempt by a private sector company to take control of a big previously state-owned company. The
aim will be to secure 100 per cent of TI's share capital in a public offer. Success would be a
milestone for Italian capitalism.
Olivetti's market capitalization, at about $10bn, is several times lower than that of TI. The
company is expected partially to fund the offer through borrowing from a consortium of banks,
expected to be in the range of $25bn to $30bn.
It is also set to announce the sale to Germany's Mannesmann of its $12bn stake in Oilman,
the two companies' joint venture through which they run Omnitel and Infostrada, the mobile and
fixed telephone operators.
The remaining cash is expected to be raised by selling TI assets. It is understood that there
are no plans to dispose of Telecom Italia Mobile, TI's profitable mobile telephone operator.
The four banks understood to be financing the $30bn loan are Chase Manhattan,
Donaldson Lufkin & Jenrette, Mediobanca and Lehman Brothers.
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Some telecoms analysts said it was hard to see what added value Olivetti's management
would bring to a company the size of TI. Nevertheless, Olivetti shares rose nearly 8 per cent in
trading on the Milan bourse on speculation about the bid. TI shares rose 2 per cent.
Only two years ago Olivetti was close to bankruptcy. It has been in behind-the-scenes talks
with the Italian government about the planned bid, which could raise political concerns in a country
that has never seen a corporate takeover on this scale.
TI is run by a small nucleus of strategic shareholders that owns 6.96 per cent of the stock.
The Italian Treasury has a "golden" share of 3.4 per cent but is expected next week to announce the
name of an investment bank that will advise on the sale.
There were suggestions last night that ministers would view an Olivetti bid favourably as a
means of avoiding a takeover from outside Italy.
"The Treasury's view on an Olivetti bid is pretty neutral," said a person close to ministers.
"There are also a number of ministers in the cabinet who view the bid with favour." Many telecoms
analysts regard TI as an undervalued company that has suffered from confused management. But
Franco Bernabe, appointed chief executive in December, has a reputation as a turnaround manager
and TI's share price has performed strongly since his appointment.
Nevertheless, people close to Olivetti said TI was still hampered by differences between its
core shareholders.
VOCABULARY:
be on the verge of (doing smth) – собираться, намереваться сделать что-л
Syn.: be set to do smth; be on the brink of (doing smth); be about to do smth
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12. Azucarera Agrees To Acquire Puleva In 590 Million Deal
Azucarera SA, the largest Spanish sugar company, has agreed to a friendly takeover of
milk producer Puleva SA, in a 590 million euro deal that would create the country's largest food
company.
The boards of the two companies are scheduled to meet today to determine the terms of the
takeover. Azucarera, created through the merger of the two largest Spanish sugar companies, and
Puleva would have a combined market capitalization of 263 billion pesetas (1.58 billion euro) and
sales of 360 billion pesetas.
The agreement comes after years of difficult corporate restructuring within the heavily
government-regulated milk and sugar industries. Because sugar prices and production are closely
controlled by the European Union, sugar companies can increase profit only through cost reductions
or diversification.
To ensure that Spain's European Union quotas for sugar production don't fall into foreign
hands, successive Spanish governments have kept a tight hold on the publicly traded company.
Generate Sucriere SA, a unit of French group Saint-Louis SA, currently owns 21% of Azucarera,
and analysts suggested that the merger with Puleva might be a defensive move aimed at protecting
the Spanish sugar group from the unwanted advances of the French.
Two years ago the government engineered the merger of Sociedad General Azucarera de
Espana SA and Ebro Agricolas Cia de Alimentacion SA in an effort to create a national champion
big enough to be restructured without losing control of the domestic market. Spain has trailed far
behind other European countries in moves to streamline, both its milk and sugar industries.
Nonetheless, plans to restructure the sugar industry have met with stiff resistance from
regional governments throughout Spain, which worry about the loss of jobs.
VOCABULARY:
SA - sociedad anonima - (исп.) акционерная компания
TRANSLATION NOTES:
To ensure that Spain's European Union quotas for sugar production don't fall into
foreign hands… - Для того, чтобы европейская квота Испании … не перешла к другим
странам (не попала в руки иностранных конкурентов) …
Перевод инфинитивных конструкций всегда требует контекстуального осмысления,
т.к. имеет в английском языке множество функций (определение, дополнение,
подлежащее, обстоятельство цели и т.д.) (См. часть Ш, раздел 3, §4)
51
the merger with Puleva might be…
Модальный глагол might выражает меньшую вероятность совершения действия и
может переводиться как возможно, может быть. (См. часть Ш, раздел 3, §3, п.3.1)
VOCABULARY:
overcapacity - избыточные производственные мощности
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14.Poison Pill Defence For News Corp
Media giant News Corp is mustering its forces to make sure the Murdoch family stays
in control and to ward off a possible takeover bid.
It is planning a "poison pill" defence, allowing shareholders to increase their stakes if
anyone buys more than 15% of the company.
The Murdoch family owns 29.5% of the firm.
The plan comes days after US cable group Liberty Media moved to raise its holding from
9% to 17%.
Liberty boss John Malone was a long-time ally of Mr Murdoch.
The move could be a prelude to a full-scale bid, or alternatively to merge the two empires.
News Corp said it had not been told in advance about Mr Malone's move. "It's too early to
tell what Liberty's intentions are, but we're not necessarily treating them as friendly," a spokesman
said.
Protection
If implemented, the poison pill plan gives existing shareholders the right to double their
holdings at half the current share price if anyone takes control of 15% of the company's shares.
The rule does not apply to Mr Malone just yet.
Liberty's existing 9.1% stake and its option on another 8% currently held by investment
bank Merrill Lynch are both declared, exempting them from the plan.
But if Liberty were to buy more than a further 1% of News Corp's voting shares, all other
shareholders would immediately be allowed to expand their stake.
The effect would be massively to dilute Liberty's - or another potential bidder's - holding.
News Corp has been based in Australia since its inception, but is shortly to move its
headquarters and its incorporation to the US from Australia.
VOCABULARY:
full-scale bid – крупномасштабная попытка поглощения ( bid – см. примечания к
тексту 4)
TRANSLATION NOTES:
But if Liberty were to buy more than… voting shares… - Если бы фирма Либерти
захотела приобрести больше… «голосующих» акций…
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Например: If we are to keep the prices down… Если мы намерены сдерживать рост
цен… (См. часть Ш, раздел 3, §3, п.3.4)
VOCABULARY CHECK
1) Процесс слияний и приобретений очень тесно связан с динамикой рынка
капитала.
2) Поглощение компании, которое происходит путем скупки ее акций на
рынке против воли руководства, является враждебным.
3) Пять государственных банков были объединены в единый конгломерат.
4) Используя термин «слияние» руководство компании пытается
представить процесс поглощения в более выгодном свете.
5) Крупнейшая мировая сталелитейная компания Mittal Steel Co.сообщила,
что делает предложение о покупке своего ближайшего конкурента Arcelor SA по
цене 28,21 евро за акцию.
6) Руководитель компании Arcelor заявил, что Arcelor - стопроцентная
жертва недружественного предложения о поглощении. Руководство же Mittal
заявляет, что это дружественное предложение.
7) Акции Centrica plc – крупнейшей газораспределительной компании в
Великобритании – на торгах в среду выросли на слухах о возможном поглощении со
стороны европейских конкурентов.
8) Разводнение акционерного капитала - выпуск новых акций не для
продажи по рыночному курсу, а для распределения или продажи по цене, которая
значительно ниже рыночного курса, персоналу в качестве поощрения.
9) "Золотой парашют" может быть использован как средство борьбы с
нежелательным поглощением.
10) Часто компания - объект поглощения - борется с попытками рейдеров
"методом отпугивания акул" (techniques). Если приобретаемая компания не
предпринимает никаких действий, она называется "спящая красавица" (sleeping
beauty).
11) Ядовитая пилюля - стратегия объекта поглощения, направленная на
выставление своих акций в непривлекательном свете. Например, выпуск новых
серий привилегированных акций, что вызывает разводнение акционерного капитала
и может предотвратить попытку поглощения, увеличив расходы поглотителя.
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CASE STUDY:
Why M&As Can Fail
It's no secret that plenty of mergers don't work. Those who advocate mergers will
argue that the merger will cut costs or boost revenues by more than enough to justify the
price premium. It can sound so simple: just combine computer systems, merge a few
departments, use sheer size to force down the price of supplies, and the merged giant
should be more profitable than its parts. In theory, 1+1 = 3 sounds great, but in practice,
Historical trends show that roughly two thirds of big mergers will disappoint on
their own terms, which means they will lose value on the stock market. Motivations
behind mergers can be flawed and efficiencies from economies of scale may prove
elusive. And the problems associated with trying to make merged companies work are all
too concrete.
Mergers are often attempts to imitate: somebody else has done a big merger,
A merger may often have more to do with glory-seeking than business strategy.
The executive ego, which is boosted by buying the competition, is a major force in M&A,
especially when combined with the influences from the bankers, lawyers and other
assorted advisers who can earn big fees from clients engaged in mergers. Most CEOs get
to where they are because they want to be the biggest and the best, and many top
executives get a big bonus for merger deals, no matter what happens to the share price
later.
On the other side of the coin, mergers can be driven by generalized fear.
economic landscape that makes the outlook uncertain are all factors that can create a
strong incentive for defensive mergers. Sometimes the management team feels they have
no choice and must acquire a rival before being acquired. The idea is that only big
55
Coping with a merger can make top managers spread their time too thinly,
neglecting their core business, spelling doom. Too often, potential difficulties seem trivial
The chances for success are further hampered if the corporate cultures of the
companies are very different. When a company is acquired, the decision is typically based
on product or market synergies, but cultural differences are often ignored. It's a mistake
to assume that people issues are easily overcome. For example, employees at a target
schedules or even a relaxed dress code. These aspects of a working environment may not
seem significant, but if new management removes them, the result can be resentment
More insight into the failure of mergers is found in the highly acclaimed study
from the global consultancy McKinsey. The study concludes that companies often focus
too intently on cutting costs following mergers, while revenues and, ultimately, profits
suffer. Merging companies can focus on integration and cost-cutting so much that they
neglect day-to-day business, thereby prompting nervous customers to flee. This loss of
revenue momentum is one reason so many mergers fail to create value for shareholders.
But remember, not all mergers fail. Size and global reach can be advantageous,
and strong managers can often squeeze greater efficiency out of badly run rivals. But the
promises made by dealmakers demand the careful scrutiny of investors. The success of
mergers depends on how realistic the dealmakers are and how well they can integrate
56
6. Make a list of what you consider to be the necessary pillars of a successful
merger.
7. Explain the combination 1+1=3
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Part 1
Unit 2
PRODUCTION
AND SALE
58
UNIT 2
LEAD-IN
There are two main ways in which a firm can grow. Internal growth is achieved by the firm
expanding on its own. The firm invests and increases its production and sales.
Production or manufacturing is the process of making goods in large quantities. Making
large numbers of basically identical goods is mass production. Manufacturing is also used when
talking about the sector of the economy that makes things.
Products are made, manufactured, or produced in plants. A plant may be referred to as a
factory or works. Makers, manufacturers, and producers are organizations that make products.
Manufacturers produce products from raw materials or component parts, which they then
sell at a profit. Companies providing raw materials and components or parts to a manufacturer are
its suppliers. In modern manufacturing, suppliers are referred to as partners.
Parts are sometimes referred to familiarly as widgets, especially when their purpose is not
clear, or when manufacturing is being discussed in a general way and the exact name of the part is
not important.
Components waiting to be assembled are stocks, or inventories. Companies may also have
stocks or inventories of work-in-progress and finished products, of course. Stocks are often kept in
warehouses before delivery.
There is a tendency for manufacturers to reduce stocks, and hence the need to finance,
store and handle them, by getting suppliers to make and deliver components just-in-time: just
before they are actually needed. This shortens lead time, the time it takes to make and deliver
goods.
JIT delivery is an example of lean manufacturing or lean production techniques.
Output is the number or type of things that a plant, company, industry or country produces.
Productivity is a measure of how much is produced in relation to the number of employees.
High output per employee = high productivity.
The maximum amount that a particular plant, company or industry can produce is its
capacity. If it is producing this amount, it is working at full capacity. If it is producing more than
what is needed, there is overproduction, excess capacity, surplus capacity or overcapacity
Spare capacity, on the other hand, is often a good thing, implying that production can
easily be increased if necessary.
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If far too many things are produced, there is a glut of these things. If not enough goods are
being produced, there is a shortage.
A firm can also grow by taking over or merging with other firms. This is known as growth
by amalgamation.
When two companies do come together, integration is said to take place. There are three
major types of integration or merger:
Horizontal integration occurs when two firms producing similar goods and services
amalgamate.
Vertical integration occurs when a company amalgamates either with a company it sells
products to, or with a company it buys products from. It is a situation in which a single company
owns several businesses that, in combination, control all the stages in producing and selling a
product. For example, a company that owns a book publisher, a film producer, and a television
company can use the same basic product in all these businesses.
Conglomerate mergers occur when a firm amalgamates with another company that has
little or nothing to do with its existing activities.
For decades companies expanded their conglomerates by buying other companies. Initially
these companies were related businesses, often suppliers. Soon the conglomerates began buying
companies with no relation. Profit motives and the desire to be the biggest became sufficient
motivation for acquisition. Ultimately, the conglomerates began to collapse under the weight of the
acquired companies. Profits started falling and companies began to retract to their "core"
businesses.
Next they discovered that they could shed even core functions by hiring them out to
companies that could do them more efficiently and, thus, less expensively. A formal agreement to
pay someone to do some of the work that you have agreed to do is subcontracting.
Payroll processing was subcontracted. Shipping was farmed out. So was manufacturing.
Companies were hired to do collections, customer call centers, and employee benefits. Collectively,
this was called outsourcing.
Outsourcing made sense. Specialized companies provided their services to many client
companies at lower prices than the client companies could do the work in-house. Both companies,
the service provider and the client, profited from the arrangement. Unfortunately, like the building
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of conglomerates before it, outsourcing got carried to extremes. Companies began outsourcing work
to the lowest bidder and lost sight of the effect it had on the company except for finances.
Outsourcing this work to "foreign" or "offshore" companies, solely to take advantage of lower labor
rates in those countries, became known as offshoring.
Offshoring can be defined as relocation of business processes to another country,
especially a country overseas. This includes any business process such as production,
manufacturing, or services.
VOCABULARY
manufacturing - процесс производства; обрабатывающая
промышленность; производство готовых изделий
mass production -массовое производство; крупномасштабное
(широкомасштабное) производство
product - продукт, продукция, изделие, товар
make, manufacture, produce - изготавливать, производить, делать, обрабатывать
plant, factory, works - завод, фабрика, предприятие, производство
maker, manufacturer, - фирма-производитель, изготовитель, поставщик
producer
raw materials - сырье, необработанные материалы
components, parts, widgets - комплектующие части, компоненты, детали, узлы,
supplier, partner - поставщик, продавец, контрагент, компаньон
stocks (BrE), inventories(AmE) - товарно-материальные запасы
work-in-progress (BrE) - незавершенное производство
work-in-process (AmE)
warehouse - склад, товарный склад; большой оптовый магазин
just-in-time delivery - доставка "точно в срок" (поставка материалов и
JIT delivery комплектующих на промышленное предприятие
небольшими партиями с достаточно частой
периодичностью, в соответствии с текущими
потребностями производства, что минимизирует
издержки на хранение)
lead time - время выполнения: промежуток времени, необходимый
для выполнения какой-л. операции (напр., время между
подтверждением потребности в заказе и поступлением
товаров, время разработки, подготовки заказа,
транспортировки, приема, инспекции)
lean manufacturing - всесторонне рационализированное производство;
lean production максимально экономичное производство
output - продукция, выпуск, выработка; объем производства;
производительность, мощность, отдача
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call center - центр телефонного обслуживания, центр обработки
звонков (вызовов)
outsourcing -аутсорсинг, привлечение внешних ресурсов: ситуация,
когда организация-заказчик привлекает внешние фирмы
для выполнения каких-л. работ, которые являются частью
ее основной деятельности; различают три вида
аутсорсинга: функциональный (передача функций
управления), операционный (передача функций
производства) и ресурсный (отказ от собственных
ресурсов и приобретение их на стороне) ; здесь же, в свою
очередь, выделяются две его составные части —
аутсорсинг внутри страны и передача выполнения работ
за рубеж. В последнем случае речь идет об офшоринге.
offshoring - офшоринг, “офшорный аутсорсинг”: передача тех или
иных видов деятельности или производства на основе
подряда иностранному поставщику
in-house - внутренний, собственный; внутрифирменный;
собственной разработки, собственного производства
in-house work -внутренняя работа, внутреннее производство:
in-house production производство, оказание услуг или выполнение работ,
которые производятся самой фирмой в своих помещениях
с использованием своей техники и персонала, не прибегая
к субподряду
COMPREHENSION QUESTIONS:
1) How is a company’s internal growth achieved?
2) What is mass production?
3) What techniques is JIT delivery an example of?
4) What can the output refer to?
5) What are the major types of integration?
6) What is a conglomerate merger?
7) What kind of activity is called re-engineering?
8) What is called outsourcing? offshoring?
VOCABULARY PRACTICE
Last year British manufacturing output fell by 14%. (Снижение составило 14%) о
Capacity (the amount a firm can make) depends upon the amount of buildings, machinery
and labour it has available. When the firm is making full use of all its resources, it is said to be
working at full capacity or 100% capacity utilisation. (Производственные мощности зависят и
рабочей силы, которая имеется в наличии)
The Financial Times reported that, thanks to the deluge of investment (уменьшени объёма
инвестиций), even a hot market like China is now stuck with overcapacity (даже на таком рынке
наблюдается затоваривание) , from cars to chemicals to electronics. A couple of years back,
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every multinational rushed to build plants there and catch the wave of China's rising consumption.
Now factories, not consumers, are overabundant.
With spare production capacity reduced to a trickle, prices have been highly sensitive to
any developments which could disrupt output.
A shortage of raw materials and components is forcing many industries to close down.
Recently, US-based companies have accelerated the practice of offshoring and have
extended its reach to include so called white-collar jobs. Large companies have transferred their
call centers to India, for example, where labor rates can be as low as 50-80% lower than US rates.
Companies have been outsourcing work for many years. This trend has been carried to an
extreme in the case of offshoring - sending work and jobs to other countries where labor is cheaper.
Merging with a company at a different stage in the production process, for instance, a car
maker merging with a car retailer or a parts supplier is vertical integration.
Lean production is aimed at the elimination of waste in every area of production including
customer relations, product design, supplier networks and factory management. Its goal is to
incorporate less human effort, less inventory, less time to develop products, and less space to
become highly responsive to customer demand while producing top quality products in the most
efficient and economical manner possible.
Business Process Reengineering reduces cost and cycle times by eliminating unproductive
activities and the employees who perform them.
TEXTS TO TRANSLATE:
15. Japan's Production Increases But Analysts Expect Slowdown
Soon
TOKYO Japanese industrial production in August was unexpectedly strong, but analysts
said output is likely to cool in coming months.
The Ministry of International Trade and Industry Wednesday said August industrial output
rose 4.6% compared with July, after adjustment for seasonal factors. That exceeded economists
average forecast for a 3.6% rise and marked the sharpest pace of increase since January 1997, the
ministry said.
MITI itself had projected a month ago that industrial output would rise 4.7% in August
from July. Compared with year earlier levels, overall output rose 5.5%, according to the ministry.
"Industrial production is beginning to show signs of recovery," the ministry said.
For the first time in more than three years, production rose across all 14 sectors surveyed,
data from the ministry showed. The electrical machinery, semiconductor and automobile sectors
registered especially robust output growth.
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And in an optimistic development for the overall economy, the data suggested that long-
term inventory adjustment by Japanese companies is coming to an end. Inventories inched 0.2%
higher in August from July on a seasonally adjusted basis, after falling 1.3% in July and slipping
0.3% in June. The need by Japanese companies to reduce their inventories in the face of stagnant
consumption had been one of the factors that weighed on production growth, depressing overall
economic activity as well, economists said.
VOCABULARY:
adjustment for seasonal factors - корректировка (поправка) c учетом сезонных
колебаний
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at random throughout a firm's operations. Trying to consolidate and reorganise the mish-mash of
operations that remain in-house is where companies usually trip up.
Approached this way, outsourcing has other snags. It often results in the use of large
numbers of subcontractors, as each part of the company delegates work to favoured subcontractors.
That is one reason why Europe's mass market car makers have failed to cut costs despite extensive
outsourcing. Coordinating a gaggle of subcontractors is often more time-consuming, and costly,
than managing in-house manufacture of the parts in question.
Worse, the piecemeal, random nature of much subcontracting means that a company can
lose its grip, often without realising it, on some of its core manufacturing processes. By the time the
firm realises what is going on, it may be too late to make up lost ground...
VOCABULARY:
fad – нововведение, новомодный управленческий метод, используемый лишь в
течение короткого периода времени.
management fads – новые идеи и теории в области менеджмента
decade - десятилетие
TRANSLATION NOTES:
farming out –субподряд, привлечение внешних ресурсов (аутсорсинг)
В этом значении является примером «авторских слов» - неологизмов, которые
образуются разными способами. В данном случае словосочетанию farming out
(наемные работы в сельском хозяйстве) придано новое, более широкое значение,
выходящее за рамки одной отрасли. (См. часть Ш, раздел 2, § 1, п.1.3)
Far from falling, their costs actually increase. – Издержки компаний не только не
сократились, но фактически возросли.
Герундий, который следует после выражения far from переводится как «не только
не…, но»; «вместо того, чтобы (+инфинитив)…»; «отнюдь не (+деепричастие)» (См.
часть Ш, раздел 3, § 5, п.5.2)
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17.JPMorgan Steps up Indian Offshoring
Bank plans recruitment of 4,500 graduates over two years. New staff to perform high-value
tasks
JPMorgan Chase plans to hire 4,500 graduates in India over the next two years with the
aim of moving 30 per cent of back office and support staff at its investment bank offshore by the
end of 2007.
The plan is the most ambitious move by an international investment bank to take advantage
of the low cost of highly educated staff in India.
It underlines the shift in the use of such offshore facilities from traditional areas such as
information technology support and call centres to core operational functions and other high-value
tasks.
The bulk of the bank's processing of foreign exchange trades will be carried out at its
centres in Mumbai and Bangalore.
It is also moving over much of the processing of credit derivatives contracts, an area where
US and UK regulators have expressed concern about backlogs across the industry. Other
investment banks are also investing heavily in India, including UBS, which plans to open its first
offshoring centre in Hyderabad early next year with an initial plan for 500 jobs.
Stefan Spohr, of consultants AT Kearney, estimates that US and UK-based investment
banks now have about 6,000 staff in India, of which half are directly employed, representing less
than 5 per cent of total headcount.
But he predicts this could rise to as much as 20 per cent in the next few years. "This is not
a trend that will go away. Global resourcing is becoming part of the way of doing business," he
said. Industry analysts say salaries in India are 70-80 per cent lower and total costs about 40 per
cent below US levels.
But Veronique Weill, head of operations at JPMorgan's investment hank, said it was not
just about cost savings.
"The quality of the people we hire is extraordinary and their level of loyalty to the
company unbeatable," she said.
The alleged "exporting" of jobs by American companies to lower-cost countries became a
contentious political issue in the run-up to last year's presidential election. But the controversy has
cooled as employment growth in the US has picked up.
VOCABULARY:
back office - отдел обработки документации, бэк-офис (отдел банка или брокерской
фирмы, занимающийся ведением счетов, оформлением различных операций,
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расчетами, а не совершением сделок или непосредственными контактами с
клиентами)
VOCABULARY CHECK
1) Вертикальная интеграция охватывает поставщиков материалов, изготовителей
узлов и деталей, сборщиков конечного изделия, продавцов и потребителей конечного
продукта (end product).
2) До последнего времени компании развитых стран рассматривали офшоринг —
передачу тех или иных видов деятельности в страны с недорогой рабочей силой — только
как способ избавиться от простых, но трудоемких (labour-intensive) операций. Однако
сегодня все больше компаний из развивающихся стран могут предложить не только низкие
издержки, но и высочайшее качество услуг.
3) Производители автомобилей зависят от поставщиков комплектующих, которые
изготавливают лишь один вид узла. Поставщики комплектующих, в свою очередь, зависят от
своих партнеров, снабжающих их отдельными деталями. Благодаря аутсорсингу, на каждом
производственном этапе удается разбить сложное задание на более простые составляющие.
4) Объем промышленного производства в США вырос в мае на 0,4%, что
оказалось выше, чем ожидалось.
5) В Китае избыточные мощности по производству алюминия равны 2,6
млн.тонн.
6) Министр нефти Саудовской Аравии Али аль-Наими (Ali al-Naimi) заявил:
"Королевство готово к тому, чтобы удовлетворить все требования международных нефтяных
компаний, если им понадобятся дополнительные объемы поставок.” Министр указал на то,
что резервные мощности Саудовской Аравии составляют более 1,3 млн. баррелей в день.
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7) Более половины всей продукции обрабатывающей промышленности,
потребляемой в США, производится за границей, особенно трудоемкая продукция массового
производства.
LEAD-IN
The money that a business spends in order to produce goods or services is its costs. Costs
are also referred to as expenses or expenditure. Planned expenditure is shown, budgeted, or
budgeted for in a budget.
Fixed costs do not change when production goes up or down. Thus regardless of the
number of units produced and sold, the fixed costs remain the same. Examples of fixed costs are
rent on equipment, utility costs, and research and development costs.
Variable costs refer to the costs that are associated directly with the number of units of
product that are produced. For example, the materials used in making a product are considered
variable costs of a product. The more products produced, the greater the costs incurred. Thus,
variable costs are costs of a production process that increase or decrease along with changes in level
of production, as opposed to fixed costs.
Direct costs are directly related to the things produced. In manufacturing, for example
direct costs include raw materials and wages and indirect costs may include things like social
security charges on top of the wages.
Operating costs, also known as overhead costs or overheads, are the costs which are
additional to the direct costs of manufacturing or of providing services. They usually cover all the
regular non-production costs of running a business, such as salaries and telephone bills, and can be
extended, for example, to include the cost of marketing and R&D activities.
Spend, until recently only used as a verb, is now also used as a noun in expressions like
marketing spend and in noun compounds like overspend.
When more units of a product or a service can be produced on a larger scale, yet with less
input costs, economies of scale are said to be achieved. Alternatively, this means that as a company
grows and production units increase, a company will have a better chance to decrease its costs.
Typically, a company that achieves economies of scale lowers the average cost per unit through
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increased production since fixed costs are shared over an increased number of goods. Economies of
scale is the theory that the larger the size of a production unit, the lower the unit cost: the cost of
producing one ton of coal, one car, or one package holiday for example.
Economies of scale give large companies access to a larger market by allowing them to
operate with greater geographical reach. But for the more traditional (small to medium) companies,
size does have its limits, so after a point an increase in size (output) actually causes an increase in
production costs. This is called "diseconomies of scale".
VOCABULARY
costs - расходы, издержки, затраты
expenses
expenditure
budget - бюджет; финансовая смета
to budget - намечать планировать, составлять бюджет (смету)
COMPREHENSION QUESTIONS:
1) What do fixed costs refer to?
2) What kind of costs are called variable?
3) Give examples of direct and indirect costs.
4) What do overheads cover?
5) What does the term economies of scale (diseconomies of scale) mean?
70
VOCABULARY PRACTICE
Faced with constraints on spending caused by record budget deficits and the demands of
the war in Iraq, administration officials said on Friday that they had increased the budget for some
health programs but cut many others, including some that address urgent health care needs.
Variable costs depend on how many goods are being made (output). If just one more unit
is made then total variable costs rise. Fixed costs are totally independent of output. Fixed costs
have to be paid out even if the factory stops production.
Firms locate their production and other operations internationally for reasons that are
more complex than the simple minimization of direct costs.
Sales numbers are only one measure of success; reining in overhead costs and creating
value for customers can make for greater success, even in the face of lower sales.
Many firms choose to merge rather than grow internally as it is often cheaper to do so and
easier and quicker to become much larger and experience lower average costs through economies
of scale.
TEXTS TO TRANSLATE:
18. EU Farm Agreement Reached, But Budget Questions Linger
The European Union on March 11 broke a deadlock over agricultural reform policy, a key
component of a wider EU budget “shake-up”. The agreement, which is less radical than originally
conceived, will open the way for a wider reform of the bloc’s funding.
But some farm ministers wondered whether the financial aspects of the deal would
produce further investigation when EU leaders meet in Berlin on March 24-25 to approve the
agreement and consider an overall package on EU finances designed to allow the eventual
admission of new members from Eastern Europe. "For me the work remains unfinished. There is a
risk that the accord will founder on the financial aspects," French Farm Minister Jean Glavany told
reporters after the meeting. "It risks being rejected at the (Berlin) summit because it exceeds
budgetary stabilisation limits," he added.
But European Farm Commissioner Franz Fischler said the deal, which was reached after
three weeks of hard negotiations and durable ministerial talks, was the biggest "revamp" of the
Common Agricultural Policy in its near 40-year history.
Member states were in a very difficult position because of the financial constraints and a
failure to reach an accord on a slow cut-back of direct grants to farmers.
This meant ministers had to settle for a diluted version of the Commission's proposals. The
Berlin summit had also increased the pressure for an agreement on agriculture, which absorbs
almost half of EU spending.
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The accord, which was accomplished without the support of Portugal, will lead the EU's
farm budget towards reduction, setting the subsidy bill at around 40 billion euros (USD 44 billion) a
year. German Farm Minister Karl-Heinz Funke told a press conference the deal was around, two
percent above the budget limits, but "we have nonetheless hit the nail on the head."
The final compromise included a 20 percent cut in the EU's guaranteed grain price,
reviewed over two years. Dairy support prices would be cut by 15 percent, yet the start date for the
reform was postponed for three years. In the beef sector, prices would be trimmed by 20 percent in
three equal steps, instead of an original Commission plan for a 30 percent price reduction.
The Commission has argued that the farm and spending reforms are necessary in order for
the EU to reach its planned expansion eastward, but also a position it can support in new world
trade talks due to start later this year. “The reform sends a clear signal to our trading partners—
which will be defended with vigour in the forthcoming round of WTO negotiations," Fischler said.
But some ministers believe the compromise did not go far enough to satisfy the EU's
trading partners, who are set to attack export subsidies in the talks.
"I suspect this will be challenged in the next round (of talks). It's possible we'll have to
return to these issues," Britain's Farm Minister Nick Brown said.
VOCABULARY:
overall package – общий пакет мер
subsidy - субсидия
TRANSLATION NOTES:
VOCABULARY CHECK
1) Постоянные затраты – это затраты предприятия, не зависящие от объема
производства. К ним относятся затраты на содержание зданий, на содержание
административного аппарата и т.д.
2) Переменные издержки – это затраты, которые меняют свою величину в связи с
изменением объема производства и продаж. Если объем уменьшается - переменные
издержки снижаются и наоборот. К переменным издержкам относятся затраты на сырье и
материалы, комплектующие, заработную плату, транспортировку и страхование продукции.
3) Накладные расходы – расходы, сопутствующие основному производству. Эти
затраты не связаны напрямую с производством отдельного изделия или вида работы. К ним
относятся, например, затраты на аренду помещений, электроэнергию, административные
накладные расходы, накладные расходы по сбыту, накладные расходы на исследования и
разработки.
4) Экономия за счет масштаба позволяет компании снижать себестоимость
единицы продукции при увеличении объемов производства.
5) Если при увеличении объемов производства средние издержки производства
растут, это явление называется отрицательным экономическим эффектом от масштаба
производства.
LEAD-IN
The most important goal of a company is to make money and keep it, which depends on
liquidity and efficiency. Because these characteristics determine a company's ability to pay
investors a dividend, profitability is reflected in share price. As such, investors should know how to
analyze various facets of profitability, including how efficiently a company uses its resources and
how much income it generates from operations. Calculating a company's profit margin is a great
way to gain insight into these and other aspects of how well a company generates and retains
money.
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The bottom line is the first thing many investors look at to gauge a company's profitability.
It's awfully tempting to rely on net earnings alone to gauge profitability, but it doesn't always
provide a clear picture of the company.
Profit-margin ratios, on the other hand, can give investors deeper insight into management
efficiency. But instead of measuring how much managers earn from assets, equity or invested
capital, these ratios measure how much money a company squeezes from its total revenue or total
sales.
Sales figures show unit sales (the number of goods sold) and sales revenue (sales
revenues), or sales turnover (the money resulting from these sales). Sales volume, confusingly, can
mean either unit sales (the number of goods sold), or sales revenues.
The gross profit margin - or gross margin for short -is often the difference between the
selling price of goods and their production cost, without taking into account other costs such as
marketing and general overheads.
Let's say a company has $1 million in sales and the cost of its labor and materials amounts
to $600,000. Its gross margin rate would be 40%.
It's important to remember that gross profit margins can vary drastically from business to
business and from industry to industry. For instance, the airline industry has a gross margin of about
5%, while the software industry has a gross margin of about 90%.
By comparing earnings before interest and taxes to sales, operating profit margins show
how successful a company's management has been in generating income from the operation of the
business. If earnings before interest and taxes amounted to $200,000 and sales equaled $1 million,
the operating profit margin would be 20%.
High operating profits can mean the company has effective control of costs, or that sales
are increasing faster than operating costs. Naturally, because the operating profit margin accounts
for not only costs of materials and labor, but also administration and selling costs, it should be a
much smaller figure than the gross margin.
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Net profit margins are those generated from all phases of a business, including taxes. In
other words, this ratio compares net income with sales. It comes as close as possible to summing-up
in a single figure how effectively managers run the business.
If a company generates after-tax earnings of $100,000 on its $1 million of sales, then its
net margin amounts to 10%.
When sales reach level where revenues match costs, a company or product breaks even.
This is break even or the break-even point, a crucial figure when calculating the return on
investment or ROI for a given business or product.
The contribution generated by each product in a product line or by each business in a
group is the amount it represents in terms of overall profit.
VOCABULARY
liquidity - ликвидность: легкость реализации, продажи,
превращения материальных или иных ценностей в
денежные средства для покрытия текущих финансовых
обязательств
profitability -рентабельность, прибыльность, доходность
income - доход, поступления; прибыль; заработок
profit margin - рентабельность (прибыльность, доходность) продаж;
margin of profit рентабельность реализованной продукции (выраженное
profit margin on sales в процентах отношение прибыли к выручке от
return on sales реализации)
bottom line - 1)итог, баланс доходов и расходов [прибылей и
убытков] (итоговая строка в финансовой отчетности,
показывающая чистые прибыли и убытки); 2) чистая
прибыль (размер прибыли после налогообложения); 3)
окончательный результат; 4) важный, решающий
фактор [момент]
net earnings - чистая прибыль
equity - собственный [акционерный] капитал
sales figures - данные о товарообороте, об объёме продаж;
sales data информация о сбыте, данные о сбыте, торговая
sales information статистика
unit sales - количество проданных единиц продукции
sales - товарооборот, объем продаж [сбыта], объем сбыта,
sales revenue продажи (реализованные товары в денежном
sales revenues выражении; рассчитывается путем умножения
sales turnover количества проданных за определенный период товаров
на цену товара)
sales volume - объём продаж: может выражать количество проданных
volume of sales единиц, либо объём товарооборота в денежном
выражении
turnover - выручка, товарооборот: стоимость товаров и услуг,
реализованных как за наличный расчет, так и в кредит
annual sales turnover - годовой товарооборот
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gross profit margin - рентабельность продаж по валовой прибыли,
коэффициент валовой прибыли (выраженное в
процентах отношение валовой прибыли к выручке от
продаж)
gross margin - валовая прибыль
earnings before interest and - прибыль до уплаты процентов и налогов (прибыль
taxes компании от основной деятельности до вычета
налоговых выплат и процентов по кредитам и
облигационным займам)
operating profit margin - коэффициент рентабельности операционной прибыли,
операционная рентабельность продаж (отношение
операционной прибыли компании к объему продаж)
operating profit - прибыль от обычной деятельности; прибыль от
продаж; операционная прибыль
net profit margin - чистая рентабельность продаж, рентабельность
net margin продаж по чистой прибыли (выраженное в процентах
отношение чистой прибыли к выручке от продаж)
break even - становиться безубыточным, достигать уровня
безубыточности
break-even point - точка безубыточности, самоокупаемости: уровень
BEP производства, при котором величина издержек равна
выручке
return on investment - прибыль на инвестированный капитал; рентабельность
ROI инвестиций (капиталовложений)
contribution - вклад, доля отдельного продукта в общем объёме
прибыли компании
COMPREHENSION QUESTIONS:
1) What is the first thing investors look at to gauge a company’s profitability?
2) What do profit margin ratios measure?
3) What are the three key profit margin ratios?
4) How is gross margin calculated?
5) What does operating profit margin show?
6) What do we call a situation when revenues match costs?
VOCABULARY PRACTICE
Gross margin is a good indication of how profitable a company is at the most fundamental level.
Companies with higher gross margins will have more money left over to spend on other business
operations, such as research and development or marketing.
Profit margin is very useful when comparing companies in similar industries. A higher profit
margin indicates a more profitable company that has better control over its costs compared to the
competitors in the industry. Profit margin is displayed as a percentage; a 20% profit margin, for
example, which means that the company has a net income of $0.20 for each dollar of sales.
Despite higher unit sales, revenues from IBM’s PC business fell too, thanks to a fierce
price war.
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The company’s annual sales turnover is around $300 million.
With the British, Italian and Spanish aerospace companies keeping the costs down, and
with 450 aircraft shared between the three partner air forces, the cost per aircraft could still come
out at $21 million. Financial break-even point for the project is 400 aircraft.
All three divisions within the group increased their contribution to profits, including the
main packaging business, still responsible for about 70 per cent of the whole.
TEXTS TO TRANSLATE:
19. Hitachi Raises Flat-panel TV Profile
Hitachi is going on the offensive in the flat-panel TV market by increasing worldwide
production capacity fivefold in the next two years and tripling its advertising budget.
Hitachi, which is Japan's second largest plasma-display-panel (PDP) TV maker after
Matsushita, said yesterday it would expand its PDP operations to make up for a drop in market
share and turn the division profitable by the second half of next year.
The group's renewed commitment to its PDP business comes just a week after it
announced that Etsuhiko Shoyama, Hitachi's president, would resign to make way for a younger
successor. Mr Shoyama's decision to step down earlier than expected spurred speculation that he
was taking responsibility for the group's poor performance.
However, the vice-president and head of the platform group, said yesterday that the PDP
business was on track to turn profitable next year and that Hitachi aimed to make a 5 per cent
operating profit margin.
"We believe we will not lose to anyone, in terms of costs, because of our technology and
development capability," he said.
Under the new plan, Hitachi will focus its investment on high definition PDP TVs, which it
expects to be the main growth sector. Production capacity of the panels at its manufacturing facility
will increase threefold to 300,000 panels a month, with the start of a third line.
Hitachi hopes to reduce the number of parts it uses in PDP TVs by 30 per cent, and
materials costs by 50 per cent, next year.
The aim is to generate revenues of Y1,500bn ($12.8bn) from digital products, of which
PDP TVs would comprise just under half.
The vice-president dismissed suggestions that the group might spur further consolidation in
a sector where sharp price falls have made it difficult to generate profits. "We have no plans (to
further consolidate) but from now on we will reap the fruits of what we have invested (in PDP) so
far," he said.
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However, he declined to set any specific profit targets in the near term and failed to dispel
concerns as to whether the group could really turn the business profitable.
One analyst said it was "totally unclear how they are going to make profits".
"Fujitsu Hitachi PDP [its manufacturing plant] will lose Y41bn this year. Their plan to turn
the TV business profitable is not achievable if they include FHP," he said.
VOCABULARY:
plasma-display-panel (PDP) – плазменная панель
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fited from strong sales growth in Japan and the U.S. Nissan Motor Co., meanwhile, is forecasting
greatly improved earnings, largely because of an intense cost-cutting campaign. The company,
which is 37%, owned by French car maker Renault SA, last week said it sees a profit of 170 billion
yen for the half-year and 250 billion yen for the full year, more than four times its previous
projection.
Smaller Japanese auto makers are struggling. Mitsubishi Motors Co. and Mazda Motor Co.
are expected to post billions of yen in losses, mostly from charges taken to deal with underfunded
pension plans.
Honda's world-wide automobile sales fell 1.9% in the second quarter, largely because of a
43% decline in sales of automobiles in Europe. Car sales in Japan rose 2.8% but Honda sold 1.6%
fewer automobiles in North America.
VOCABULARY:
in terms of - в исчислении, в каком-л. выражении; в показателях, в переводе на
in money terms – в денежном выражении
in real terms – в реальном исчислении
in value terms – в стоимостном выражении
showing – зд.показатели
TRANSLATION NOTES:
Honda’s 2nd quarter net fell 8,5% - во втором квартале чистая прибыль компании
Хонда сократилась на 8,5%
В английских заголовках гораздо более употребительны, чем в русских, разного рода
сокращения и пропуски. Например, в вышеприведенном заголовке пропущено слово
profit. (См. часть Ш, раздел 2, §3)
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21. Ford Posts Record Results in Third Quarter
Ford Motor announced record third-quarter earnings and a reorganization plan designed to
give regional units around the world more autonomy.
Beating Wall Street predictions, Ford posted earnings of $1.1 billion, up 11% from last
year. Per-share earnings were 90 cents fully diluted, up from 80 cents a year ago and above the 85
cents expected by analysts.
Ford officials said record sales in North America offset losses in Europe and South
America. The company reported revenue rose 16% to $37.9 billion and the company's worldwide
sales increased by 7% for the quarter.
"We continued our strong earnings momentum, despite very competitive markets
worldwide, by building our brands, leveraging the synergies offered by our global scale and
maintaining a rigorous cost discipline," Ford CEO Jaq Nassar said.
North American automotive operations reported net earnings of $1 billion for the quarter.
Although worldwide sales increased 7% to 1.6 million vehicles, Ford's losses in South
America increased while European losses declined.
Ford's South American unit lost $72 million, compared with a loss of $44 million a year
ago. Ford said it remains committed to South America despite difficult economic conditions there.
It expects to break ground on its new assembly plant in the Bahia state of Brazil in the fourth
quarter.
Ford lost $171 million in Europe in the third quarter, down from a year-earlier loss of $273
million. The company said it does not expect to reach its goal of improving operating earnings in
Europe this year.
Ford can now boast 14 consecutive quarters of improved earnings.
"To the extent Ford can keep its North American operations plateaued at this level of
profitability, and then can take advantage of the turnarounds now — not so much in Latin America
but in Europe and Asia — the string of quarterly successes will continue," said David Littmann,
chief economist at Comerica.
Ford says it also reduced costs for the 11th consecutive quarter. Costs were down $300
million compared to last year.
Ford also announced a reorganization plan that will give regions more autonomy. It formed
four business units and promoted Henry Wallace to chief financial officer from group vice president
of the Asia-Pacific region.
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Ford says the reorganization should help Ford quickly respond to regional tastes of
consumers. The Ford brand of vehicles will have separate units for North America, Europe, Asia
and South America. All of Ford's luxury brands — Lincoln, Volvo and Jaguar — will be part of the
Premier Automotive Group.
VOCABULARY:
TRANSLATION NOTES:
per-share earnings were 90 cents fully diluted up from 80 cents – доходность каждой
акции возросла с 80 до 90 центов при полной эмиссии (или за счет выпуска новых
акций).
diluted earnings per share (diluted EPS, DEPS) - разводненная прибыль на акцию,
(чистая прибыль, приходящаяся на одну обыкновенную акцию, рассчитанная с учетом
как находящихся в обращении обыкновенных акций, так и акций, которые могут быть
выпущены при конвертации облигаций, привилегированных акций и некоторых
других конвертируемых долговых обязательств, а также реализации варрантов на
акции)
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The negative impact of the Marconi acquisition, combined with normal fluctuations in
operations, pushed the operating profit margin to 18.7 per cent from 21.6 per cent last year,
although this was up from 16.9 per cent in the first quarter.
Carl-Henric Svanberg, chief executive, said in an interview it was “logical to expect” the
operating profit margin to move above the key 20 per cent level in the second half of the year.
He said the beneficial effects of the Marconi restructuring would start to be felt in the third
and in the fourth quarters. “The rationalization measures have not taken effect yet,” he said.
Karl-Henric Sundstrom, chief financial officer, said these included the loss of 1,600 staff
and the integration of products, facilities, information technology and the removal of overlaps.
Analysts backed this view. Per Lindberg, of Dresdner Kleinwort, said: “The operating
margin should expand quite discernibly in the second half on the back of a seasonal rise in sales,
rationalization gains from streamlining of Marconi and an improved business mix.”
Shares in Ericsson have suffered since margins contracted below the 20 per cent level. Its
share price has dropped 16 per cent this year. It closed less than 1 per cent down yesterday at
SKr22.80.
The slight decline in net profitability during the quarter masked strong growth in sales in
most regions. Total net sales rose 15 per cent to SKr44.2bn, compared with SKr38.4bn in 2005.
Asia-Pacific sales grew 55 per cent, while Western Europe was up 26 per cent compared with last
year, thanks in part to the addition of Marconi. Central and Eastern Europe, the Middle East and
Africa sales grew by 24 per cent, while North America dropped 42 per cent year-on-year.
VOCABULARY:
rationalization - рационализация; усовершенствование
overlap - выполнeние одинаковых функций; совпадение; частичное дублирование
VOCABULARY CHECK
1) Валовая прибыль равна разнице выручки от продажи товаров и себестоимости
проданных товаров без учета коммерческих и управленческих расходов.
2) Годовой товарооборот компании составляет около 300 млн. долл.
3) Он рассчитывает, что его подразделение в будущем году достигнет уровня
безубыточности.
4) Компания «Боинг» сообщает о хороших результатах своей деятельности в
первом квартале прошлого года и росте прибыли. Чистая прибыль компании в отчетный
период составила $623 млн. ($0,77 на акцию), а доход компании равнялся $13 млрд.
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5) В квартале, который завершился 30 сентября, компания Microchip Technology
из Аризоны ожидает доходы в размере $141,5 млн., а прибыль составит около 17 центов на
акцию. 17 сентября, подтверждая свои ранние прогнозы, Microchip Technology объявила, что
она намерена получить доходы в диапазоне от $136 млн. до $141 млн., а прибыль будет от 15
до 17 центов на акцию. Компания также заявила, что по сравнению с предыдущим кварталом
ее оборот повысится на 2%, что вызвано увеличением продаж. Увеличился объем продаж в
азиатском регионе, показатель продаж в Северной и Южной Америке остался на прежнем
уровне, а в Европе объем продаж сократился.
6) Высокий спрос на цифровые камеры позволил японской компании Nikon
утроить свою прибыль. В третьем квартале 2006 финансового года операционная прибыль
компании достигла 19,8 млрд. иен (166,5 млн. долларов США) относительно 5,9 млрд. иен
(50 млн. долларов США) годом ранее. Доход Nikon в отчётном периоде равен 192,9 млрд.
иен (1,6 млрд. долларов США), а в третьем квартале 2005 финансового года выручка
составляла 153,7 млрд. иен (1,3 млрд. долларов США).
7) Рост продаж заставил Nikon пересмотреть прогнозы на 2006 финансовый год в
целом и повысить уровень ожидаемой операционной прибыли на 18%, до 53 млрд. иен.
LEAD-IN
Sellers and suppliers are often willing to sell on credit and this source of working capital
financing is very common for both startup and growing businesses. Trade credit is the generic term
for a buyer's purchase of supplies or goods from a seller (supplier) who finances the purchase by
delaying the date at which the price is due, or allowing installment payments.
Money that customers (individuals or corporations) owe a company in exchange for its
goods or services are accounts receivable or receivables. Customers owing money in this way are
debtors. Accounts receivable usually come in the form of operating lines of credit, and are usually
due within a relatively short time period, ranging from a few days or weeks up to one year.
If a company has receivables, it means it has made the sale but has yet to collect the money
from the purchaser. Most companies operate by allowing some portion of their sales to be on credit.
These sales are usually to frequent customers, who are invoiced periodically, allowing them to
avoid the hassle of physically making payments as each transaction occurs.
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If you look at the balance sheet of a public company, you will usually see accounts
receivable recorded as an asset, since it represents a legal obligation for the customer to remit cash
for its debts.
Conversely, when a company owes debts to its suppliers or other parties, these are known
as accounts payable. Accounts payable or payables are recorded on a company's balance sheet as a
short-term (current) liability. Essentially, this represents debt a company must settle within one
year. Examples are unpaid phone bills and other utilities. Suppliers waiting to be paid are creditors.
Working capital refers to the cash a business requires for day-to-day operations, or, more
specifically, for financing the conversion of raw materials into finished goods, which the company
sells for payment. By getting hold of money that it is owed sooner, a company reduces the working
capital it has tied up in debtors.
A firm without sufficient working capital has liquidity problems and may look for a cash
injection or a cash infusion.
Earnings not distributed are reserves, which may be used to finance a company’s
development in capital spending in investment, or paid out in a later period to shareholders.
Depending on whether you are a borrower, such as a business in need of finance, or a
lender, such as a bank, you may describe a loan as borrowing, lending, or debt. The state of being
in debt is indebtedness.
Interest for a loan is charged at a percentage rate. The principal is the amount originally
lent.
Debt is short-term if it is to be repaid over a few months or a year or medium- or long-
term if over a longer period.
If a company fails to make debt repayments on time, or at all, it defaults on the debt.
VOCABULARY
working capital - oборотный капитал, оборотные средства: капитал,
участвующий и полностью расходуемый в течение одного
производственного цикла; к оборотному капиталу относятся:
материальные оборотные средства; денежные средства;
краткосрочные финансовые вложения; средства в текущих
расчетах
financing - финансирование предприятия: обеспечение предприятий
необходимыми финансовыми ресурсами
source of financing - источник финансирования
trade credit - коммерческий (торговый, фирменный) кредит: кредит,
предоставляемый продавцом или поставщиком услуг
покупателю в виде отсрочки платежа за проданные
товары/оказанные услуги
accounts receivable - дебиторская задолженность, счета к получению, счета
receivables дебиторов; ожидаемые поступления: суммы, которые
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должны быть получены от клиентов за товары и услуги
(напр., средства, причитающиеся рекламному агентству от
клиента; средства, причитающиеся издателю по подписке в
кредит и т. д.)
accounts payable - кредиторская задолженность, счета к оплате, счета
payables кредиторов: стоимостное выражение обязательств должника
перед своими кредиторами, состоит из неосуществленных
платежей поставщикам за отгруженные товары,
неоплаченных налогов, невыплаченной начисленной
заработной платы, неоплаченных долгов
debtor - должник: лицо, взявшее взаймы у кредитора определенную
сумму
creditor - кредитор: лицо, предоставляющее средства взаймы; может
иметься в виду как лицо, предоставляющее прямой кредит
(напр., банк), так и лицо, предоставляющее коммерческий
кредит (напр., магазин, торгующий в кредит)
tie up - вкладывать деньги во что-л.
cash injection - денежные вложения, вливания; финансовые инъекции
cash infusion
reserves - резервный фонд, резерв, резервы: часть нераспределенной
прибыли, выделенная для покрытия определенных расходов
capital spending - капиталовложения; капитальные расходы: затраты на
capital expenditure приобретение, возведение, модернизацию и реконструкцию
объектов основных средств
borrower - заемщик
lender - кредитор
loan - ссуда; заем; кредит
borrowing
lending - предоставление займов (кредитов, ссуд), кредитование
debt - долг
indebtedness - задолженность; сумма долга, размер задолженности
interest - процент, процентный доход
interest rate - процентная ставка, ставка процента: плата за кредит в
процентном выражении к сумме кредита, как правило, в
расчете на один год
principal - основная сумма, капитальная сумма: сумма, на которую
начисляются проценты
short-term debt - краткосрочный долг; краткосрочная задолженность;
текущее [краткосрочное] обязательство: долговые
обязательства, которые подлежат погашению в ближайшие
12 месяцев
medium-term debt - среднесрочный долг, среднесрочная задолженность,
среднесрочное обязательство: долговое обязательство со
средним сроком погашения; обычно считается, что это
обязательство со сроком погашения от 1-5 до 10 лет
long-term debt - долгосрочный долг, долгосрочная задолженность,
долгосрочное обязательство: долговые обязательства со
сроками погашения более года (напр., облигации, векселя
сроком более года); реже под долгосрочным долгом
подразумеваются облигации со сроками свыше 5-10 лет
default - невыполнение обязательств (по контракту); дефолт, отказ
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от уплаты долга: состояние, которое возникает, когда
заемщик не может выплатить или не выплачивает проценты
по долгам или не погашает их; невозможность отвечать по
своим финансовым обязательствам
COMPREHENSION QUESTIONS:
1) What do accounts receivable mean? How are they recorded in the balance sheet?
2) What are accounts payable?
3) What does cash flow show?
4) What is overdraft?
5) What does working capital refer to?
6) What may a firm with liquidity problem look for?
7) What do we call the state of being in debt?
8) What is the principal?
9) When does a company default on a debt?
VOCABULARY PRACTICE
The major advantages of trade credit are that it is often readily available; it allows you to
spread your payments over several months or years; and minimal, or no, downpayment or interest
charges are assessed.
The latest of the Small Business Research Trust's authoritative reports shows that the
problem of cashflow, payments and debtors remains the most serious one for small firms, after low
turnover and lack of business.
While British bankers talk of being in the red because of the old practice of showing
overdrawn accounts in red ink, Italians talk about being in the green.
Campeau said Federated and Allied need cash infusions to meet ‘liquidity needs’. They
include working capital to buy inventory and funds to pay bond interest due tomorrow.
In Japan, the lending bank and the borrower are often part of the same associated group
of companies. This close connection between lender and borrower makes it easier for the firm to
convince the borrower to contribute additional capital and help the firm sort out its problems if
things go wrong.
In short-term planning, the planning horizon is rarely longer than the next 12 months. The
firm wants to make sure it has enough cash to pay its bills, and that short-term borrowing and
lending are arranged to the best advantage.
The growth in earnings had let the company get ahead of schedule in repaying long-term
debt, which had been raised from $19 million to $302 million. It is now 18 months early in repaying
the principal on its seven-year bank loan.
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TEXTS TO TRANSLATE:
23. Latin America Starts to Compete
Its businesses are in better shape than its balance of payments might suggest
When a string of Latin American countries defaulted on their payments to commercial
banks in the debt crisis, their private companies were in as much of a mess as their public finances.
Decades of protectionism and high inflation had bred companies that were adept at making money
by cultivating political connections and by the profitable management of cash flow. But such firms
had a poor record when it came to making goods that consumers might choose to buy. So when
many Latin American governments subsequently opened their economies to foreign competition, it
was not surprising that consumers flocked to buy imported goods that offered better quality for less
money.
As gloom once again envelops Latin America, prompted by Mexico's devaluation last
December, it is worth noting that the region has an overlooked asset it lacked in 1982: a
substantially reformed corporate sector. Swollen by privatisations, corporate Latin America is much
closer than it once was to being able to compete with the world. In Argentina, the private sector is
now bailing out the government, rather than the other way around. Even in Mexico, none of the
blue-chip industrial companies has yet defaulted on their dollar debts, though some may eventually
do so.
The trade opening has forced many of Latin America's private firms to make painful
changes. These have sometimes involved firing workers. But more often the strategy has been to
scrap elderly machines and replace them with modern equipment. In most Latin American
countries, productivity has risen sharply. A second competition-induced change has been equally
important. Instead of making a wide range of products, inefficiently, as they did in the days of im-
port-substitution, many firms have learned to specialise. By making a few product lines in much
larger quantities, such companies are managing not only to compete with imports but also to
develop new export markets. Encouragingly, such changes are now at last under way in Brazil's car
industry, the region's largest single manufacturing complex.
VOCABULARY:
public finance – государственные финансы, гос.бюджет
public debt – государственный долг
public spending – государственные расходы
public works – общественные работы
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public opinion – общественное мнение
public services –коммунальные услуги
public library – публичная библиотека
public limited company – акционерная компания
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VOCABULARY:
VOCABULARY CHECK
1) Коммерческий кредит - кредит, предоставляемый в товарной форме продавцом
покупателю в виде отсрочки платежа за проданные товары.
2) Дебиторская задолженность – это денежные средства, которые должны быть
получены компанией за предоставленные ею товары или услуги.
3) В бухгалтерском балансе дебиторская задолженность - статья активов.
4) Кредиторская задолженность отражается в бухгалтерском балансе как текущие
обязательства.
5) Оборотный капитал - это затраты на сырье, материалы, рабочую силу, которые
полностью входят в цену продукции и возвращаются в денежной форме после ее реализации.
6) Если заёмщик не в состоянии выплатить проценты и основную сумму долга,
кредитор может продать его имущество.
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7) Когда мы анализируем заимствования компании, необходимо проверить,
имеют ли они долгосрочный или краткосрочный характер и предоставлены ли ссуды по
фиксированной или переменной ставке процента.
CASE STUDY:
Stolen Jobs?
the past six months or so: India may do for services what China already does for
manufacturing. Any product can be made in China less expensively than in the rich
countries. Is it merely a matter of time before any service that can be electronically
Manufacturers have used overseas suppliers for years. But now, cheaper
communications allow companies to move back-office tasks such as data entry, call
centres and payroll processing to poorer countries. India has three huge attractions for
companies: a large pool of well-educated young workers, low wages and the English
language. But plenty of other industrialising countries also handle back-office work.
Moreover, given the pressure on costs in rich countries, offshore sourcing of services will
grow: a much-quoted study by Forrester, a consultancy, last year predicted that 3.3m
American jobs (500,000 of them in IT) would move abroad by 2015. And the quality of
agencies) from sending service work abroad. To do so, though, would be as self-
defeating as stopping the purchase of goods or components abroad. For, although the
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jobs killed by outsourcing abroad are easy to spot, the benefits are less visible but even
greater.
employment. A study for the Institute for International Economics found that, in 1979-
99, 69% of people who lost jobs as a result of cheap imports in sectors other than
manufacturing found new work. But those figures are only for America, with its flexible
job market, and leave a large minority who did not find new employment. Moreover, 55%
of those who found new jobs did so at lower pay, and 25% took pay cuts of 30% or more.
Some of the gains from free trade need to be used to ease the transition of workers into
new jobs.
But those gains are substantial. Some arise simply from organising work in more
effective ways. A fair part of the work that moves abroad represents an attempt by
dollar of costs the United States moves offshore brings America a net benefit of $1.12 to
$1.14 (the additional benefit to the country receiving the investment comes on top).
Part of this arises because, as low value-added jobs go abroad, labour and
investment can switch to jobs that generate more economic value. This is what has
happened with manufacturing: employment has dwindled, but workers have moved into
educational and health services where pay is higher (and conditions often more
agreeable).
VOCABULARY:
white-collar services – сфера высококачественных, высокооплачиваемых услуг
flexible job market – гибкий рынок рабочей силы, труда (возможность быстро найти
новую работу)
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low-value-added jobs – виды работ, трудовой деятельности с низкой долей
добавленной стоимости
TRANSLATION NOTES:
To do so, though, would be as… as… - Подобные действия при этом были бы
подобны…(такими же … как)…
For,… the benefits are less visible… - Поскольку (так как) … выгоды от этого менее
очевидны…
Перевод служебных слов часто вызывает трудности и требует грамматического
анализа предложения, т.к. они могут выступать в разных качествах: союз, предлог,
наречие. (См. часть Ш, раздел 3, § 9, п.9.3)
1. Explain what is meant by “India may do for services what China already does
for manufacturing”.
2. Explain what you understand by the terms “offshoring”; “outsourcing”. Give
the most common examples.
3. Analyse why offshoring has spread from manufacturing to white-collar services.
4. Outline the attractions of a country for a foreign company to outsource its
operations.
5. What do you think politicians might do to discourage companies from sending
service work abroad?
6. Evaluate all the benefits and drawbacks of outsourcing.
7. What evidence is there in the article that offshoring brings a net benefit?
8. Suggest, with reasons, why companies use offshoring and outsourcing.
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Part 1
Unit 3
93
ECONOMIC CYCLE
AND KEY
INDICATORS
UNIT 3
ECONOMIC CYCLE AND KEY INDICATORS
94
Prosperity can also be measured in terms of GNI (Gross National Income). This includes
money coming into a country from investments abroad, minus money leaving the country to go to
investors from abroad. This is the new name for what used to be called GNP (Gross National
Product).
Real GDP means that the figures have been adjusted for inflation. This is important in
comparing present economic conditions with the economy of previous years. If the GDP is reported
before adjustment for inflation, it is called a nominal GDP. Obviously, it will be much higher than
the real GDP.
Unemployment is the number of jobless or people without work. The unemployment rate
is a powerful indicator. When the various indicators are mixed, many analysts look to the
unemployment rate as being the most important.
Inflation is defined as a sustained increase in the general level of prices for goods and
services. It is measured as an annual percentage increase. There are several variations of inflation.
Deflation is when the general level of prices is falling. This is the opposite of inflation.
Hyperinflation is unusually rapid inflation. In extreme cases, this can lead to the
breakdown of a nation's monetary system. One of the most notable examples of hyperinflation
occurred in Germany in 1923, when prices rose 2,500% in one month!
Stagflation is the combination of high unemployment and economic stagnation with
inflation. This happened in industrialized countries during the 1970s, when a bad economy was
combined with OPEC raising oil prices.
There are two main price indexes that measure inflation: the Consumer Price Index (CPI)
(in the United Kingdom the main measure of inflation is done through the Retail Price Index or
RPI) is considered the most widely used measure of inflation and is regarded as an indicator of the
effectiveness of government policy. The CPI is an index that measures the quarterly changes in the
prices of a selected weighted “basket” of consumer goods and services. The basket includes a wide
range of goods and services such as food, clothing and footwear, housing, health, transport,
recreation and education.
The rate at which the prices of goods and services rise over a period of time, including
costs which are likely to change, such as food and fuel and, in the UK, the cost of mortgages is
known as the headline inflation, or headline rate of inflation.
Headline inflation rates can be volatile, often because of substantial movements in
commodity or food prices. Such volatility in a key price index can make it difficult for
policymakers to accurately judge the underlying state of, and prospects for, inflation.
A measure of inflation that excludes certain items which face volatile price movements is
core inflation. Core inflation eliminates products that can have temporary price shocks
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because these shocks can diverge from the overall trend of inflation and give a false measure of
inflation.
Core inflation is thought to be an indicator of underlying long-term inflation.
The rate at which the prices of goods and services rise over a period of time, measured
without considering prices that go up and down frequently, especially the costs of mortgages is
underlying inflation.
The Producer Price Index is not as widely used as the CPI, but it is still considered to be a
good indicator of inflation. Formerly known as the "Wholesale Price Index", the PPI is a basket of
various indexes covering a wide range of areas affecting domestic producers. The PPI includes
industries such as goods manufacturing, fishing, agriculture, and other commodities.
Balance of payments is a systematic record of a country’s receipts from, or payments to,
other countries. In a way, it is like the balance sheets for businesses, only on a national level. There
are three primary accounts in the balance of payments: the current account, the capital account, and
the official settlements account.
The current account of the balance of payments records trade balance - international
flows of goods and services - and other net income from abroad. Current account figures also
include transfers of money between countries, for example debt interest, or foreign workers sending
money home.
The trade balance is part of a current account balance. Trade balance consists of visible
trade (physical goods of export and import) and invisible trade (payments for services such as
insurance and tourism). If exports exceed imports there is a trade surplus. If not, there is a trade
deficit or trade gap.
The capital account records international transactions in financial assets.
VOCABULARY
economic indicator (number) - экономический показатель
growth - рост; развитие, увеличение; прирост
sustainable growth - допустимый, устойчивый, обоснованный, приемлемый
для экономики рост, не ведущий к увеличению инфляции;
неинфляционный; т.е. тот, который не ведет к негативным
последствиям для экономики
sustained growth - непрерывный, длительный, стабильный рост
robust growth
unsustainable growth - очень высокие темпы роста экономики, влекущие за собой
рост инфляции; неприемлемый, недопустимый (для
экономики) рост
growth rates - темпы роста
gross domestic product (GDP) - валовой внутренний продукт, ВВП: совокупная стоимость
товаров и услуг, созданных внутри страны за определенный
96
период (обычно за год)
per capita - на душу населения
living standards - жизненный уровень, материальное благосостояние
gross national income (GNI) - валовой национальный доход: в системе национальных
счетов валовой национальный доход до 1993 г. назывался
валовым национальным продуктом.
gross national product (GNP) - валовой национальный продукт: суммарная стоимость
всех товаров и услуг, произведенных резидентами страны
на ее территории и за ее пределами за какой-л. период
времени (обычно за год)
adjusted for inflation - с учетом инфляции
unemployment - безработица, незанятость
seasonal unemployment -сезонная безработица
natural rate of unemployment - естественный уровень безработицы
unemployment benefit - пособие по безработице
inflation - инфляция
anticipated inflation - ожидаемая инфляция
unanticipated inflation - непредвиденная инфляция
double-digit inflation - инфляция, темпы роста которой выражаются
двузначным числом
sustained inflation - длительная (постоянная) инфляция
headline inflation - потребительская инфляция; общая инфляция; инфляция,
измеряемая на основании индекса потребительских цен
underlying inflation - реальная (структурная) инфляция: исключает
краткосрочные неравномерные изменения цен под
влиянием отдельных факторов, которые носят
административный, событийный, а также сезонный
характер
core inflation - базовая инфляция: рост цен за вычетом сезонных
колебаний цен на продовольствие и энергоносители
deflation - дефляция
hyperinflation - гиперинфляция
stagflation - стагфляция: инфляция, сопровождаемая стагнацией
производства и высоким уровнем безработицы в стране;
одновременное повышение уровня цен и уровня
безработицы
Consumer Price Index (CPI) - индекс потребительских цен, являющийся также
показателем уровня инфляции
mortgage - ипотечный кредит, закладная
Retail Price Index (RPI) - брит. индекс розничных цен
Producer Price Index - индекс цен производителей
balance of payments - платежный баланс, счета внешнеэкономической
деятельности: система счетов, отражающая стоимостное
выражение всех внешнеэкономических операций страны за
определенный период времени
current account - платежный баланс по текущим операциям; текущий
платежный баланс: часть платежного баланса,
показывающая итог внешнеэкономических операций по
торговому балансу, балансу экспорта-импорта услуг и
балансу некоммерческих (трансфертных) платежей
trade balance - торговый баланс: oтчётность, отражающая результаты
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balance of trade участия страны в международной торговле, соотношение
импорта и экспорта; тoрговый баланс является составной
частью платёжного баланса, входя в текущий платёжный
баланс
visibles - “видимые” статьи торгового баланса: отражают импорт и
экспорт материальных товаров.
invisibles - “невидимые” статьи торгового баланса: отражают
поступления и расходы от таких услуг, как страхование,
финансовые услуги и туризм
adverse balance - пассивный (отрицательный, неблагоприятный) баланс,
negative balance пассивное (отрицательное) сальдо; термин может
passive balance относиться как к платежному балансу в целом, так и к
unfavourable balance отдельным его составляющим, напр., торговому балансу
import balance или балансу услуг
active balance - активный (положительный, благоприятный) баланс,
favourable balance активное (положительное) сальдо: баланс, в котором
positive balance поступления (от экспорта) превышают платежи (по
surplus balance импорту); термин может относиться как к платежному
балансу в целом, так и к отдельным его составляющим
(напр. торговому балансу или балансу услуг)
trade surplus - активное сальдо торгового баланса; активный торговый
export surplus баланс (”сальдо” -как правило встречается в значении
“активное сальдо”. В противном случае из контекста
должно быть очевидно, что речь идёт о пассивном сальдо.
Напр. ‘the import surplus’- отрицательное сальдо торгового
баланса)
trade deficit - дефицит торгового баланса
trade gap
capital account - счет движения капиталов: раздел платежного баланса, в
котором отражаются операции, связанные с поступлением
и предоставлением займов и осуществлением инвестиций
COMPREHENSION QUESTIONS:
1) What are the four key economic indicators?
2) What is the difference between gross domestic and gross national product?
3) What is the difference between real and nominal GDP?
4) What can hyperinflation lead to?
5) How can inflation be measured?
6) What method of measuring inflation is known as the headline inflation rate?
7) Is core or headline inflation considered more accurate in representing the economy's
underlying inflationary pressures?
8) What is the balance of payments? What are its three primary accounts?
9) What does the trade balance consist of?
10) Which account records international transactions in financial assets?
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VOCABULARY PRACTICE
The sustainable growth rate is a measure (один из показателей) of how much a firm can
grow without borrowing more money. After the firm has passed this rate, it must (прибегнуть к
займам) borrow funds from another source to facilitate growth.
While the latest figure for GDP in the October-to-December period was indeed anemic
(далеко не обнадеживающим) and marked the worst performance in three years, the new
reading (показатель) actually turned out to be slightly better than the 1.6 percent growth rate
estimated a month ago, according to the Commerce Department's report released today.
A price index measures the change in price of a fixed basket of goods and services between
two time periods. This change in prices over time is often (зачастую) called inflation.
The U.S. trade deficit increased 17% in 2005, and 9% in the fourth quarter alone. Rapidly
rising oil prices and imports explained about two-thirds of the increase.
Timothy Geithner, president of the New York Federal Reserve, on Monday dismissed the
view that the US current account deficit was sustainable, suggesting the risk of a sudden fall in the
dollar would grow the longer the trade gap widened.
TEXTS TO TRANSLATE:
25. Eurozone Recovery Boosts Confidence
The eurozone's economic recovery has pushed confidence to a fresh five-year high while
core inflation has tumbled, according to data released yesterday.
But the generally upbeat picture provided by the European Commission's sentiment survey
was marred by Spain, which has been one of the 12-nation euro-zone's best performing economies
but where the mood has darkened dramatically.
The survey is the latest evidence that the general economic pick-up in the eurozone over
the past six months is gaining momentum, without any serious inflationary impact so far.
Core inflation - excluding energy prices - fell unexpectedly sharply in January, according
to detailed figures released by Eurostat, the European Union's statistical unit. Inflation excluding
energy, food, alcohol and tobacco -a measure watched closely by financial markets - fell from 1.4
per cent in December to 1.2 per cent last month, - the lowest since February 2001.
The core inflation figures compared with a headline inflation rate of 2.4 per cent in
January, up from 2.2 per cent in December.
But the Commission's economic sentiment index for Spain plunged in February to the
lowest level since February 1994, largely because of a collapse of confidence in the construction
and retail sectors.
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Although the country has for many years outperformed the eurozone average, worries have
mounted recently about its expanding current account deficit and vulnerability to a house price
collapse. Spain's January inflation rate of 4.2 per cent was the highest in the eurozone. The harsh
winter might also have hit Spanish confidence, analysts said.
The data come as the European Central Bank is almost certain to raise its main interest rate
tomorrow by a quarter percentage point to 2.5 per cent.
Unlike the US Federal Reserve, the ECB dislikes core inflation measures. As such it is
likely to express concern about long-run inflation pressures created by high oil prices.
But the still modest underlying inflation pressures, and continuing doubts about the
sustainability of the upswing, provided ammunition for those urging the ECB not to rush
subsequent interest rate increases.
Labour market figures also took some of the gloss off yesterday's economic news. France's
unemployment rate in January nudged higher, and Germany saw a much smaller-than-expected fall
of 5,000 in its seasonally adjusted unemployment total to 4.695m in February.
But the Commission's survey showed manufacturing and service companies have become
more optimistic about their employment expectations.
The Commission's euro-zone economic sentiment index rose from 101.5 in January to
102.7 in February, the highest since June 2001. Economic sentiment improved in Germany.
VOCABULARY:
recovery - подъем, оживление
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economic sentiment index - общий индекс доверия экономике, индекс экономических
настроений, индекс ожиданий производителей и потребителей, индекс делового и
потребительского оптимизма
101
VOCABULARY:
fuel – усиливать; способствовать росту; подстегивать, стимулировать
Это слово имеет широкий синонимический ряд: to boost, to foster, to spur, to stimulate,
to fan .
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Central Bank was due to make its regular pronouncement on interest rates Thursday. The
benchmark refinancing rate has remained at 2.5 percent since April, while inflation in the euro
zone, which rose slightly to an annual rate of 1.2 percent in August, has remained well below the
ECB' s ceiling of 2 percent.
In Rome, Prime Minister Massimo D'Alema warned that Italy's economy, the most
sluggish in the EU, might grow less the 1.3 percent that the government had forecast for this year.
VOCABULARY:
fret about – беспокоиться
TRANSLATION NOTES:
which has few built-in-correcting mechanisms – где практически отсутствует
собственные корректирующие механизмы.
Правильный перевод зависит от правильной передачи оттенков значения few, little, a
few,a little
few, little – мало (имеют несколько негативный оттенок, подчеркивают почти полное
отсутствие чего-либо)
a few, a little – несколько, немного (См. часть Ш, раздел 3, § 10 п.10.2 )
VOCABULARY:
inflation reports – данные о состоянии инфляции
TRANSLATION NOTES:
a fairly benign inflation picture – уровень инфляции достаточно низкий (ситуация с
инфляцией достаточно благоприятная)
Это выражение является хорошим примером антонимического перевода. (См. часть
Ш, раздел 2, § 4, п.4.4)
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29. Will This Slowdown Be Satisfactory?
After its robust growth in the first half of the year, the Canadian economy appears to be
slowing, and inflation seems well-contained. However, in a surprisingly hawkish Aug. 16 policy
report, the Bank of Canada isn't convinced that it can relax its guard.
The bank now expects growth this year between 4.25% to 4.75%, up from the 4% to 4.5%
range in its May policy report. In the most recent three quarters, the economy grew at an annual rate
of 5.5%. That means the bank's projection implies a slowdown for the second quarter and beyond.
However, the BOC made it clear that it expects growth to remain strong enough to push
against the economy's capacity limits, and that it would remain vigilant against inflationary
pressures. The BOC projects core inflation— excluding energy and food— to rise only slightly, from
1.5% in June to 2% next year. The BOC'S target range for inflation is 1% to 3%. The bank appears
unconvinced that the US economy will slow enough to ease price pressures in the US's biggest
trading partner.
Exports, consumer spending, and capital outlays powered the first half’s stronger-than-
expected growth. Solid US demand is fueling exports, pushing Canada's June trade surplus to a
record. Household spending remains firm, given the 0.8% jump in June retail sales. And businesses
continue to invest heavily in high-tech equipment.
Indeed, the BOC is intensely studying the degree to which such investments have lifted
productivity and expanded Canada's ability to grow faster than it has in the past without sparking
inflation. The bank recently surveyed 140 companies, and the results suggest that investment in new
technologies and a wave of corporate restructurings in the 1990s are bearing fruit. Further studies
aimed at pinning down the economy's new speed limit are expected to be released in November.
Still, whatever room for additional growth there may be appears to be rapidly shrinking. If
the Federal Reserve hikes US rates again later this year, look for Canada to follow suit.
VOCABULARY:
hawkish - зд. жесткий
TRANSLATION NOTES:
105
Canadian economy appears to be slowing, and inflation seems well-contained –
Похоже, что экономический рост Канады замедляется, а инфляция находится под
жестким контролем.
В предложениях, содержащих конструкцию «именительный падеж с инфинитивом»,
глаголы-сказуемые to seem, to appear переводятся как по-видимому. Сравните:
The market seems to be hesitant. – На рынке, по-видимому, наблюдается
выжидательное настроение.
(См. часть Ш, раздел 3, § 4)
VOCABULARY CHECK
1) Темпы экономического роста, безработица, инфляция и платежный баланс –
ключевые показатели развития экономики.
2) Инфляция – это постоянный рост цен на товары и услуги.
3) По словам министра, ожидается, что в августе инфляция составит либо 0%, либо
будет зафиксирована дефляция.
4) В 1970-х годах в промышленно развитых странах мира имела место стагфляция,
сопровождаемая стагнацией производства и высоким уровнем безработицы.
5) Потребительская инфляция – это инфляция, измеряемая на основании индекса
потребительских цен.
6) Базовая инфляция не включает цены, подверженные резким сезонным
колебаниям.
7) Во втором квартале текущего года дефицит текущего платежного баланса США
составил 166, 2 миллиарда долларов, сообщается на сайте британского делового издания
Financial Times.
8) Аналитики отмечают, что размер дефицита (платежного баланса) приближается в
настоящее время к 6 процентам ВВП, а столь значительная диспропорция должна неизбежно
привести, по их мнению, к обесцениванию доллара.
9) Активное сальдо торгового баланса - превышение товарного экспорта страны над
ее товарным импортом.
10) Положительное сальдо торгового баланса РФ за июнь 2006г. составило 11 млрд
822 млн долл. против 9 млрд 312 млн долл. годом ранее (рост на 26,9%).
11) Министерство финансов РФ прогнозирует снижение базовой инфляции
с 7,1% в 2007 году до 4,8% в 2009 году. Такой прогноз содержится в
материалах министерства по проекту федерального бюджета на 2007 год.
Общая инфляция за это время снизится с 8% до 5,5%. В 2008году уровень
базовой инфляции прогнозируется в размере 5,2%, общей - 6%.
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SECTION 2 BOOM AND BUST
LEAD-IN
The business cycle or economic cycle refers to the ups and downs seen somewhat
simultaneously in most parts of an economy. The cycle involves shifts over time between periods
of relatively rapid growth of output (recovery and prosperity), alternating with periods of relative
stagnation or decline (contraction or recession). These fluctuations are often measured using the real
gross domestic product.
The stages of the business cycle are growth (expansion), peak, recession (contraction),
trough and recovery. At one time, business cycles were thought to be extremely regular, with
predictable durations. But today business cycles are widely known to be irregular - varying in
frequency, magnitude and duration. In an economy where the pattern is extreme, it is referred to as
the boom-bust cycle.
An economic boom with booming economic growth (increasing demand and production),
inevitably peaks. At its peak, the economy is running at full steam. Employment is at or near
maximum levels; GDP output is at its upper limit; and income levels are increasing. In this period,
prices tend to increase due to inflation; however, most businesses and investors are having an
enjoyable and prosperous time.
After experiencing a great deal of growth and success, income and employment begin to
decline. As our wages and the prices of goods in the economy are inflexible to change, they will
most likely remain near the same level as that found in the peak period unless the recession is
prolonged. The result of these factors is negative growth in the economy.
Following the peak there is a slowdown, turndown, downturn, or downswing (periods of
slower or negative growth), when the economy slows down, turns down, or weakens.
A slowdown in demand, the amount of goods and services that are bought, may be the first
sign of a recession: a period with little growth, no growth, or even negative growth. A severe
recession is a slump.
When a recession is extremely severe and prolonged, commentators talk about economic
collapse and depression. The Depression, with a capital D, usually refers to the years following the
Wall Street crash of 1929. Also sometimes referred to as a depression, trough is the section of the
business cycle when output and employment bottom out and remain in waiting for the next phase of
the cycle to begin. Or there may be a double-dip recession. The recession reaches its trough and
bottoms out: the economy starts to improve, but then turns down again into a second trough.
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During a recession people impatiently look for signs of a recovery or an upturn: signs that
the economy is recovering, strengthening, picking up, or turning up and that things are getting
better. Commentators then talk about a pick-up, turn-up, upturn, or upswing in the economy.
In a recovery the economy is growing once again and moving away from the bottoms
experienced at the trough. Employment, production, and income all undergo a period of growth,
and, overall, the economic climate is good.
When a recession is over, and there is steady growth, the economy is said to take off.
Soft landing is a term describing a growth rate high enough to keep the economy out of
recession, but also slow enough to prevent high inflation. When the economy is growing at strong
rate, the central banks try to engineer a soft landing by raising interest rates enough to slow the
economy down without putting it into recession.
When the economy goes directly from a period of expansion to a recession as the
government attempts to slow down inflation a term hard landing is used. This might happen if a
government or monetary authorities are more restrictive in their fiscal or monetary policy than what
is appropriate for the economy. It is opposite of soft landing.
VOCABULARY
business cycle - деловой цикл, цикл деловой активности; экономический
economic cycle цикл: периодические колебания уровня экономической
активности, в которых принято выделять несколько фаз:
подъем, кризис, депрессию, оживление
expansion - подъем экономической активности; расширение,
развитие, увеличение
peak - пик, максимум
business cycle peak - высшая точка /пик/ экономического цикла
recession - спад, рецессия
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contraction
trough - самая глубокая точка (падения производства, цен);
business cycle trough низшая точка (цикла)
bottom of cycle
from the trough to the peak - от низшей точки (падения производства) до высшей
точки подъёма
boom - бум, быстрый подъём (деловой активности)
bust - резкое падение, спад
boom-bust cycle - цикл, состоящий из подъемов и спадов
slowdown - спад, замедление, снижение; резкое снижение,
turndown спад производства; спад деловой активности
downturn
downswing
slow down - (об экономике) замедлять темпы роста; ослабевать
turn down
weaken
slump - резкое или внезапное падение (цен, спроса на товары);
внезапный спад деловой активности; экономический
кризис (экономическая ситуация, характеризующаяся
сочетанием инфляции и экономического спада )
collapse - крах, крушение, провал; резкое падение, сокращение
VOCABULARY PRACTICE
The Fed will try to avoid a hard landing by raising interest rates only enough to slow the
economy down without putting it into recession (a soft landing).
Since the Second World War, most business cycles have lasted three to five years from
peak to peak. The average duration of an expansion is 44.8 months and the average duration of a
recession is 11 months. As a comparison, the Great Depression - which saw a decline in economic
activity from 1929 to 1933 - lasted 43 months from peak to trough.
Chinese Finance Minister expressed confidence on Tuesday that China's economy could
maintain strong growth this year despite a global economic turndown. However he admitted a
world slump would affect China.
"The contribution of exports to our GDP is over 40 percent, therefore the slowing down of the
global economy, including the slowdown in the US economy, stagnation in Japan's economy and a
slowdown of European economies is having some bearing on China's growth," he said.
In 2004, the global economy enjoyed buoyant growth on the back of economic expansion
in the U.S. In 2005, however, a slowdown in the U.S., engine room of the global economy, will
trigger slowdowns in Asia and the EU as well, causing growth in real GDP to fall to 3.0%. Despite
this, adjustment in the U.S. economy will be moderate and not turn into a recession, and the global
economy is projected to return to recovery and achieve real GDP growth of 3.3% in 2006.
There are still good reasons to expect a pickup in growth in the period ahead, and it is
encouraging that the global financial system has proved remarkably resilient to the substantial
shocks of the last year.
TEXTS TO TRANSLATE:
30. Losing Balance and Monentum?
The smooth scenario where the recovery was expected to spread more evenly across the
OECD has not materialised. While some elements of this scenario, such as a relatively successful
soft landing in the United States and a rebound of activity in Japan may be in place, what is badly
lacking is sustained momentum in the euro area. Indeed, as time passes it is becoming increasingly
evident that circumstantial arguments (Iraq war, oil and commodity price shocks, exchange rate
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fluctuations) are not sufficient to explain the string of aborted recoveries in Continental Europe. As
a result, and looking ahead, growth prospects seem bound to differ widely across the OECD and the
world economy, ranging from solid in Asia to back on trend in the United States, and weak and
uncertain in Europe. Such contrasting economic perspectives will not contribute to reducing current
account imbalances and may be reflected in slower aggregate world demand. These growth
outcomes are not carved in stone, however: as always, they are contingent on the effectiveness of
macroeconomic and structural policies and their capacity to adapt to a more globalised
environment.
In the United States the economy is likely to continue to grow in line with potential.
Several years into the recovery, activity is still largely driven by domestic demand, with little help
yet in sight from net exports. Notwithstanding a somewhat accidental fall in imports during the first
quarter of the year, the contribution of net exports to growth has indeed been rather weak despite a
substantial depreciation of the real effective exchange rate of the dollar.
In Continental Europe, after an encouraging upswing during the first half of 2004, growth
weakened in the second half of last year, in parallel with sagging consumer and business
confidence. Although on the surface recorded growth picked up somewhat in early 2005, it is
flagging anew and no decisive upturn is in the offing before late this year. This abrupt weakening
stems in large part from a stronger euro and higher oil prices. But it has been considerably
amplified in countries such as Italy and Germany by a distinct and recurrent lack of resilience to
outside shocks, in contrast with smaller economies such as Spain and the Nordic countries, which
have held out well. The euro area's susceptibility to shocks makes short-term forecasting a highly
contingent exercise: for a gradual recovery to materialise, as expected in this Outlook, a modicum
of external stability will be needed for some time.
VOCABULARY:
rebound –начало роста после спада;оживление, оздоровление
rebound in orders – рост числа заказов
rebound of the economy – оздоровление экономики
aggregate - совокупный
TRANSLATION NOTES:
OECD - Ogranization for Economic Cooperation and Development -Организация
экономического сотрудничества и развития (ОЭСР) (См. часть Ш, раздел 2, § 1, п.1.5)
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31.The Next Downturn
Will a New Economy bust follow the New Economy boom?
Five years ago, BUSINESS WEEK led the way in writing about what was later called the
New Economy. The idea was that America was undergoing an economic transformation.
Technological innovation, combined with the globalization of business and a financial system that
provided venture capital, were energizing the economy by boosting productivity. In this New
Economy, we argued, fast growth would no longer lead to inflation, as it did so often in the old.
The reason: Productivity growth from investment in technology would cut costs. And the opening
of new markets around the world and fierce competition would further put a lid on prices and
wages. The business cycle wasn't dead, we said, but it had dramatically changed.
Not surprisingly, traditional economists attacked the idea, arguing instead that the U.S. was
simply experiencing a normal cyclical upturn that would soon fade. Rapid productivity gains were
more fiction than fact, they said, and if expansion continued to gather speed, higher inflation was a
sure thing. They were wrong. Growth over the last five years has averaged well above 4% annually,
and productivity is increasing at double the rate of a decade ago. Meanwhile, inflation has been
tepid, even though the economy is in its 10th year of expansion, the longest in history.
There may be a downside to the New Economy, however. Michael J. Mandel, economics
editor of BUSINESS WEEK, who spearheaded our New Economy coverage, argues in his new
book, The Coming Internet Depression, that the growing importance of technology in the economy
means that should this sector falter, it could drag the whole economy with it. Boom would turn to
bust.
Here's Mandel's theory: Tech spending is slowing and will slow further. Venture capital, so
critical in funding new technologies, begins to dry up. Productivity growth slips, and so does
overall growth. Inflation, no longer held in check by rising productivity, accelerates. The Federal
Reserve, focusing on rising inflation and a declining dollar, raises rates, thus intensifying the slow-
down. The economy heads toward serious and prolonged recession.
Other BW editors dispute Mandel's views. They contend that tech spending, though
slowing, is not about to fall off a cliff. Investment in such promising technologies as the mobile
Internet will fill the gap. A slowing economy will not produce more inflation, and even if it does,
the Fed is not about to make a colossal mistake in policy.
In this Special Report, we present both sides of the issue—and invite you to make up your
own mind.
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VOCABULARY:
venture capital – капитал, вкладываемый в проекты с повышенным уровнем риска,
«венчурный», рисковый капитал
TRANSLATION NOTES:
the New Economy - Новая экономика - термин обязан своим рождением сети
Интернет и связанным с ним ожиданиями. Совокупность нескольких
высокоэффективных подотраслей экономики, ориентированных на использование
интеллектуальной составляющей общественного развития и базирующихся на
передовых информационных технологиях, интернет-решениях: консалтинг,
инновации, образование и др. Понятие активно используется с конца 1990-х гг.
There may be a downside to the New Economy, however. – Однако, не все так
благополучно с Новой экономикой.
Такие вводные слова как therefore (поэтому) и however (однако) в английском языке
гораздо чаще, чем в русском помещают в середине или даже в конце предложения. В
русском языке они чаще ставятся в начале предложения, что следует учитывать при
переводе.
downside – оборотная, непривлекательная сторона чего-либо
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though, is that higher inflation expectations are becoming embedded in the wage and price
structure. Second-quarter wages rose only 2.5% from the year before. Some attempt to recoup lost
buying power is showing up. All wage agreements in place in July had raises averaging 2.85%, but
the new contracts call for 3.09%. Moreover, wages and pensions adjust upward automatically if in-
flation exceeds the government's target. This year that target is 2%, already well out of reach.
Another worry is that higher inflation is eroding Spain's competitiveness, as seen in its
widening trade gap. Booming tourism, about 10% of Spain's GDP, has not offset the growing
deficit in merchandise, as imports have surged.
Anti-inflation efforts by the government include a faster pace of labor-market reform and
deregulation of telecommunications and other utilities. Also, the Bank of Spain is trying to crimp
credit growth by raising banks' loan-loss reserves. Still, with the government reluctant to tighten
fiscal policy, the only remedy for overheating will most likely be a cooler pace of growth.
VOCABULARY:
pass-through – влияние (возросших издержек) на (цены других товаров)
TRANSLATION NOTES:
The economy is too darn hot. – Заголовок этой статьи близок по стилю нормам
разговорного языка (darn – чертовский, отвратительный, проклятый, ужасный), что
не характерно для публицистической прозы русского языка. Поэтому на русский язык
это предложение лучше перевести более нейтрально, например: Экономика Испании
перегрета или Темпы роста экономики слишком высоки. (См. часть Ш, раздел 2, § 4)
a sign that broad price pressures are building…- что свидетельствует о повсеместном
усилении ценового давления
VOCABULARY CHECK
1) Экономический цикл состоит из нескольких фаз: подъем, пик (максимум),
кризис, депрессия, дно (низшая точка) и оживление.
2) Во время пика в экономике наблюдается полная занятость, а производство
работает на полную мощность. Реальный объём производства достигает в этой точке своего
максимума.
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3) Сокращение общего объема производства называют также спадом или
рецессией; термин депрессия используется по отношению к длительным спадам.
4) После кризиса экономика вступает в фазу оживления.
5) Умеренное оживление - это такие темпы экономического роста, которые
достаточны для того, чтобы избежать рецессии, но одновременно не вызывают рост
инфляции и процентных ставок.
6) “Жесткая посадка” ведет к резкому снижению темпов роста с негативными
последствиями для экономики и участников рынков.
7) Главным вопросом, волнующим как аналитиков, так и инвесторов, остается
следующий: является ли замедление темпов экономического роста в США, наблюдаемое в
середине года, началом спада или “мягким приземлением”. Заметное снижение темпов роста
– очевидный факт, однако невозможно предсказать, как отреагируют инвесторы на тот или
другой сценарий дальнейшего развития ситуации.
115
When prices stay at the same level, they are flat, remain stable, level off, remain
constant, stagnate, stabilize.
When share prices fall a long way, commentators talk about billions of dollars, yen or
whatever being wiped off share values. With prices falling sharply to new lows, people may talk
about records being broken when indices hit an all-time or record low. Likewise when prices rise
they may push indices to an all-time or record high.
If prices fall a very long way and there seems to be no limit to the amount they may drop,
people use the parachuting image of free fall. Commentators may even compare events to a nuclear
accident like Chernobyl and talk about a market meltdown.
A bubble is a type of investing phenomenon that demonstrates the frailty of some facets of
human emotion. A bubble occurs when investors put so much demand on a stock that they drive the
price beyond any accurate or rational reflection of its actual worth, which should be determined by
the performance of the underlying company. Like the soap bubbles a child likes to blow, investing
bubbles often appear as though they will rise forever, but since they are not formed from anything
substantial, they eventually pop. And when they do, the money that was invested into them
dissipates into the wind. A word bubble may also refer to an economic situation in general.
A crash is a significant drop in the total value of a market, almost undoubtedly attributable
to the popping of a bubble, creating a situation wherein the majority of investors are trying to flee
the market at the same time and consequently incurring massive losses. Attempting to avoid more
losses, investors during a crash are panic selling, hoping to unload their declining stocks onto other
investors. This panic selling contributes to the declining market, which eventually crashes and
affects everyone. Typically crashes in the stock market have been followed by a depression.
It is important to note the distinction between a crash and a correction. A correction is a
reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index.
Corrections are generally temporary price declines, interrupting an uptrend in the market or asset.
As a general rule, a correction should not exceed a 20% loss of value in the market.
VOCABULARY
advance, climb, - повышаться, расти
increase, rise,
gain ground, hike
COMPREHENSION QUESTIONS:
1) How can we characterize upward and downward movements in market prices?
2) What words are used when we talk about prices rising/falling by large amounts?
117
3) When do we talk about share values being wiped off?
4) What happens when a bubble bursts?
5) What is the difference between a crash and a correction?
VOCABULARY PRACTICE
The U.S. trade deficit soared to an all-time high of $725.8 billion in 2005, pushed upward
by record imports of oil, food, cars and other consumer goods.
Since the closing months of last year, we have witnessed a dramatic meltdown in Middle
Eastern stock markets, which after racing upward during most of 2005 have now lost much of their
value.
A real estate bubble or property bubble (or housing bubble for residential markets) is a
type of economic bubble that occurs periodically in local or global real estate markets. It is
characterized by rapid speculative increases in the valuations of real property such as housing until
they reach unsustainable levels relative to incomes and other economic elements, followed by
decreases (also known as a house price crash or a market correction) that can result in many
owners holding negative equity (a mortgage debt higher than the value of the property).
Remember that things get overheated when the general public begins to spend money on
investment vehicles with the idea of quickly doubling their money. When enough people get into
speculation, it is a sure sign of a bubble. When people aren't buying a house for a place to live or as
a long-term investment vehicle to rent out, you know the market is overheated. When you hear a lot
of people talking about "making money on their house", then you know there's a big bubble.
The relationship between bubbles and crashes is similar to the relationship between clouds
and rain. Since you can have clouds without rain but you can't have rain without clouds, bubbles
are like clouds and market crashes are like the rain. Historically, a market crash has always
precipitated from a bubble, and the thicker the clouds or the bigger the bubble, the harder it rains.
TEXTS TO TRANSLATE:
33. Russia's booming economy
It's not about just oil and gas
Russian economic growth hit a six-year high of 7.9% year on year in the first quarter,
propelled by strong growth in construction, manufacturing and trade. The result is particularly
impressive in light of the small contribution made by oil and gas. Although economic growth is
likely to ease during the rest of the year, robust domestic demand may ensure that the full-year rate
does not slow appreciably from the 6.7%.
State statistics agency RosStat released full first-quarter GDP data on June 14th. The main
factors behind the 7.9% headline growth figure were a 23.2% rise in construction, an 11.8%
expansion in manufacturing and a 9.1% increase in trade. Large gains were also registered for
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hotels and restaurants (13.9%), the wholesale and retail trade (9.1%), transport and communication
(7.9%).
Saving and spending
Two themes permeate the data. First, investment is very strong and this is powering
economic growth. Fixed capital investment soared by 20.1% year on year in January-March,
according to estimates from the Ministry of Economic Development and Trade, compared with just
5.7% growth during the year-earlier period.
Second, household consumption is buoyant. With real disposable incomes up by 13%,
private consumption rose by 12.7% year on year in January-March, according to the economic
development ministry's estimates. This helped to fuel a 13.6% rise in retail sales and a 7.9%
increase in the sales of services to the population. Strong domestic demand is also reflected in
further rapid growth in imports of goods and services. These were up by 36.8% year on year in
January-March; exports, by contrast, rose by 5.3%, with energy exporters still struggling to increase
production volumes.
Improving access to consumer credit is also helping to fuel demand. Domestic credit rose
by 46.4% year on year and continued to expand. The central bank reports a 53.7% rise in the value
of rouble credit last year, with foreign-currency loans up by a more modest 29.3%. Loans to
individuals recorded the fastest growth, on account of rapidly rising consumer credit.
Home grown
Strong domestic demand is proving a boon for a number of manufacturing sectors. The
machinery and equipment sector increased its output, with particularly solid growth in output of
machinery and equipment used in housing construction and roadbuilding (including an
approximately 70% year-on-year rise in output of bulldozers and cranes in March). Rising
investment also explained much of the increase in output of electrical machinery and equipment,
with demand for office and computing equipment surging. Consumer demand is also playing a role,
as underlined by a sharp increase in the production of televisions.
Amidst this strong growth, the oil and gas industry--for years the economy’s mainstay--is
struggling. Natural gas output rose by just 0.3% year on year during the first quarter, with
independents faring little better the state monopolist Gazprom. Oil output rose by 4.2% over the
same period, primarily owing to favourable weather conditions. Preliminary data for output growth
in April show a return to more modest 1.8% year-on-year growth, or somewhat below the 2.6%
increase in output recorded for the previous year as a whole.
Too fast to last
In the absence of a more vigorous performance from oil and gas, can this pace of GDP
growth be sustained? The momentum behind the expansion of construction, manufacturing and a
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clutch of service-related sectors is certainly promising, and strong domestic demand will continue
to drive the economy. However, base effects will have a less favourable impact in the rest of the
year. Moreover, buoyant consumer demand will continue to fuel strong import growth and as a
result net trade will exert an increasing drag on GDP growth.
As a result, full-year GDP growth this year is likely to be within the official government
forecast of 6.5-7%. Faster economic growth is unlikely while energy output growth remains
sluggish and while Russia’s large-scale investment needs are not--even now--being fully met. A
range of problems in the business environment and competitiveness - eroding real rouble
appreciation are further obstacles in the path of Russia’s economy. Still, in the context of the near
stagnation of hydrocarbons output, Russia’s growth performance is surprisingly robust and well
above the long-term trend rate.
VOCABULARY:
fixed capital investment - инвестиции в основной капитал [в основные средства]
TRANSLATION NOTES:
economic growth is likely to ease… - по-видимому (вероятно), темпы роста
экономики замедлятся…(См. часть Ш, раздел 3, § 4, п.4.2)
The central bank reports a 53.7% rise in the value of rouble credit last year, with
foreign-currency loans up by a more modest 29.3%. - ….. стоимость кредитов в рублях
увеличилась на 53.7%, причем сумма займов в иностранной валюте...(См. часть Ш,
раздел 3, § 6, п.6.3)
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German consumer prices rose an annual 2.3% in October, down from a six-year high of
2.5% the previous month, according to a preliminary government report Tuesday. In Italy, the
annual rate was 2.5%, down from 2.6% in September.
Along with the inflation news came a report from France showing that consumers cut their
spending in September, adding to worries that rising oil prices will dent domestic demand and damp
growth in the euro zone. French households reduced spending by 1.2%, surprising forecasters, who
had expected a rise after a 1.8% decline in August.
On a more positive note, industrial production for the euro zone expanded at a robust
annual pace of 6.3% in August, compared with 5.4% in July. This continued the rising trend over
the past year. But economists warn the outlook for production is less rosy - a number of surveys
show businesses are less optimistic about the future.
The slowdown in consumer-price inflation in October was the result of a brief dip in
energy prices, which had surged in September. But oil prices have begun to rise again, and the euro
continues to trade close to all-time lows. A weak euro makes imports more expensive for
consumers in Europe.
The European Central Bank is worried that workers will demand wage increases to
compensate for higher prices sparked by surging fuel costs and a weak currency. This would lead to
even higher inflation - and more interest-rate increases, bitter medicine for an economy that already
has shown signs of slowing. The ECB has raised interest rates seven times in the past year to
counter inflation risks.
On Tuesday, Germany's six leading economic institutes forecast German growth would
slow next year to 2.7% after 3% this year. European central bankers and politicians, who have also
been trying to talk up the euro, still call Europe’s prospects the best in a decade.
VOCABULARY:
consumer prices are poised to rise again – потребительские цены вот-вот вновь
возрастут
Синонимы: be ready to rise; be about to rise; be set to rise; be prepared to rise
rising oil prices will dent domestic demand – рост цен на нефть приведет к
сокращению внутреннего спроса
outlook - перспективы
TRANSLATION NOTES:
given recent renewed increases… - принимая во внимание (учитывая) недавнее новое
увеличение… (См. часть Ш, раздел 3, § 6, п.6.4)
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bitter medicine for an economy – «горькая» пилюля для экономики – факторы,
отрицательно сказывающиеся на экономике
TRANSLATION NOTES:
it provided no conclusive evidence… - это не давало никаких оснований…; ничто не
говорило о…; ничто не подтверждало…
Местоимение no, являясь определением к существительному evidence переводится
как никаких, ни одного. Двойное отрицание, которое не соответствует нормам
английской грамматики, вполне допустимо в русском языке.
122
VOCABULARY CHECK
1) Все рынки подвержены циклическим колебаниям и проходят идентичные
стадии развития.
2) Ситуация, когда падение курса акций принимает неуправляемый характер,
называется «свободным падением».
3) Резкое падение цен на акции приводит к значительным убыткам биржевых
торговцев и огромному числу банкротств.
4) «Мыльный пузырь» - это ситуация на бирже, когда цены на акции
необоснованно завышены.
5) Коррекция – обратное движение цены финансового инструмента, товара,
индекса (обычно в сторону понижения).
123
The biggest customer of the Federal Reserve is one of the largest spenders in the world -
the U.S. government. Similar to how you have a checking account at your local bank, the U.S.
Treasury has a checking account with the Federal Reserve. All revenue generated by taxes and all
outgoing government payments are handled through this account. Included in this service, the Fed
sells and redeems government securities such as savings bonds and Treasury bills, notes and bonds.
The United States government issues several different kinds of bonds through the Bureau
of the Public Debt, an agency U.S. Department of the Treasury. Treasury debt securities are
classified according to their maturities: Treasury Bills have maturities of one year or less; Treasury
Notes have maturities of two to ten years; Treasury Bonds have maturities greater than ten years.
Treasury Bonds, Bills, and Notes are all issued in face values of $1,000, though there are
different purchase minimums for each type of security.
Investors often shorten the word Treasury to just the letter "T" when referring to these
bonds. Thus, Treasury Bonds are known as T-Bonds, Treasury Notes are called T-Notes, and
Treasury Bills are T-Bills.
Treasury Bills (T-bills) are the most marketable money market security. Their popularity is
mainly due to their simplicity. T-bills are basically a way for the U.S. government to raise money
from the public. T-bills are issued with 3 month, 6 month, and 1 year maturities. The biggest reason
that T-Bills are so popular is because they are one of the few money market instruments that are
affordable to the individual investors. T-bills are usually issued in denominations of $1,000,
$5,000, $10,000, $25,000, $50,000, $100,000, and $1 million. Other positives are that T-bills (and
all treasuries) are considered to be the safest investments because the U.S. government backs them.
In fact, they are considered risk-free.
VOCABULARY
fiscal policy - налогово-бюджетная политика: политика правительства в
области налогообложения и государственных расходов;
является инструментом регулирования экономики
monetary policy - денежно-кредитная политика: воздействие ЦБ на
стоимость и предложение кредита для содействия
экономическому росту, занятости, стабильности цен, и
платежного баланса; контроль за денежным обращением и
ликвидностью банковской системы
public spending - государственные расходы
government spending
interest rate - процентная ставка, ставка процента: плата за кредит в
процентном выражении к сумме кредита, как правило, в
расчете на один год
money supply - денежная масса [количество денег] в обращении;
предложение денег: количество денег на определенную
дату, которое имеется в наличии для сделок и инвестиций в
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экономике
loosen ( ease) - смягчать (зд. денежно-кредитную или бюджетно-
налоговую политику)
tighten - ужесточать (зд. денежно-кредитную или бюджетно-
налоговую политику)
Federal Reserve System (FED) Федеральная Резервная Система (ФРС): Центральный банк
США
Bank of England - Банк Англии: Центральный банк Великобритании
Bank of Japan Банк Японии: Центральный банк Японии
targeting rates - установление ориентиров, пределов (зд. показателей роста
денежной массы)
open market operations - операции на открытом рынке: деятельность центрального
банка по приобретению и продаже государственных ценных
бумаг с целью увеличения или сокращения денежной массы
в обращении
discount rate - учетная ставка, учетный процент: ставка, по которой
центральный банк дает кредиты коммерческим банкам;
инструмент денежно-кредитной политики, в значительной
мере определяющий общий уровень процентных ставок
reserve requirements - резервные требования: доля пассивов, которую
коммерческие банки согласно правилам центрального банка,
должны держать на беспроцентном счете в центральном
банке
checking account - текущий (чековый) счет: предполагает определенный
минимум вклада при открытии счета, оплату услуг банка по
определенному тарифу; по такому счету обычно не
выплачиваются проценты; его удобство - в возможности
получать на счет регулярные суммы и расплачиваться за
товары и услуги личными чеками
U.S. Treasury - Министерство финансов США. Возглавляется министром
Department of the Treasury финансов (Secretary of the Treasury). В состав Министерства
(U. S. Department of the входят Таможенная служба США (Customs Service) ,
Treasury) Налоговая служба США (Internal Revenue Service) и другие
подразделения.
treasuries - казначейские ценные бумаги
Treasury bill (T-bill) - казначейский вексель: дисконтный финансовые векселя
правительства, используемые для краткосрочных (до года)
заимствований и регулирования ликвидности денежного
рынка; широко используются ФРС для операций на
открытом рынке
Treasury bonds (T-bonds) -казначейские облигации (США): долгосрочные облигации
со сроками более 10 лет и минимальным номиналом в 1 тыс.
долл.
Treasury notes (T-note) - cреднесрочные свободно обращающиеся казначейские
облигации со сроками погашения 2 - 10 лет и номиналами от
1 тыс. до 1 млн долларов и выше
maturity - срок платежа ( по векселю), срок погашения (облигации)
denomination - номинальная стоимость ценной бумаги, банкноты, монеты
COMPREHENSION QUESTIONS:
1) Why are fiscal policy and monetary policy so important?
125
2) Who exercises control over money supply in the US and the UK?
3) What do interest rates directly affect?
4) What kinds of bonds does the US government issue?
5) What bills are the most marketable money market securities?
VOCABULARY PRACTICE
Monetary policy is typically implemented by a central bank, while fiscal policy decisions
are set by the national government. However, both monetary and fiscal policy may be used to
influence the performance of the economy in the short run.
Likewise, stimulative fiscal policies, tax cuts, and spending increases are normally
expected to stimulate economic growth in the short run, while tax increases and spending cuts tend
to slow the rate of future economic expansion.
The extent and choice of any additional interest rate hike which could be necessary will
depend on whether future economic data show more signs of increasing inflation risk.
Having raised the overnight lending rate from 1% to 5.25% the Fed decided to take a
pause, while the world’s other largest central banks (ECB, the Bank of Japan and the Bank of
England) quite recently embarked upon a rate increase campaign.
TEXTS TO TRANSLATE:
36. Tightening Has Begun To Take Hold
After experiencing a lift to their economy from the Summer Olympics, Australians should
prepare for less than a gold-medal performance in coming months.
The economy is slowing around the edges, although not to any worrisome degree.
Consumers are cooling off, and housing remains weak compared with a year ago. The economy's
biggest engine is exports, and that should continue into the next year. But after real gross domestic
product soared at a 4.7% average annual rate for the past three years, growth is likely to slow to 4%
for the year ending June.
That at least was the word from Reserve Bank of Australia Governor Ian Macfarlane when
he testified before Parliament on Nov. 30. He said domestic demand would have a "substantial
slowdown," growing by about 3% instead of the current 6% pace. Capital spending alone is
expected to grow about 4%, after some weakness in mid-2000. But a weak Aussie dollar would
bolster exports.
126
A softer economy worries Australia's executives. Business confidence plunged in the
fourth quarter. And the profit outlook is the lowest in 10 years.
With signs of a slowdown increasing, RBA policy-makers kept rates unchanged at its Dec.
5 meeting. The RBA had raised its overnight cash rate by a total of 1.5 percentage points, but now
policy bias is in neutral .
The RBA's tightening moves were aimed at keeping inflation in check. Although a 25%
jump in oil prices has boosted total consumer prices, inflation was rising even before fuel costs
spiked. In the third quarter, consumer prices were up 6.1% from a year ago, but the rate was skewed
by the introduction of a 10% sales tax.
Macfarlane said the RBA expects inflation to settle down to 3%. That rate would be at the
upper limit of the RBA's inflation target. The high inflation rate is partly the result of the weak
Aussie dollar, which will lift import prices. Indeed, the RBA could face a tough challenge next
year. It may have to strike a balance between the weak Aussie's benefits to exporters and its cost in
the form of higher inflation.
VOCABULARY:
keep inflation in check – сдерживать, держать под контролем инфляцию
Синонимы: tame inflation; restrict inflation; check inflation; contain inflation; control
inflation; curb inflation.
127
decades after adjusting for inflation. This excess liquidity has not pushed up conventional (к чему
так все привыкли) inflation (thanks to cheap Chinese clothes and computers), but instead it has
inflated a series of asset-price bubbles around the world. Thus, pushing this argument to its limit
(при очень детальном рассморении этого вопроса), it could be said that the global housing boom
is indirectly “made in China”. Not only has China played a role in holding down short-term interest
rates, but the People's Bank of China has also supported America's mortgage market by buying vast
amounts of mortgage-backed securities.
If abandoning its dollar peg causes China to reduce its purchases of T-bonds, then yields
will rise. But this depends on several uncertainties. For instance, will last week's revaluation reduce
inflows of speculative capital into China, and hence its need to intervene in the foreign-exchange
market by buying dollars? A large chunk of China's foreign-exchange intervention over the past
year has been to offset not its current-account surplus but inflows of hot money. Some economists
believe that, in the short term, the small revaluation will intensify speculation of further
revaluations and so attract even more capital inflows, forcing the People's Bank of China to buy
more Treasury bonds to stabilise its currency. If so, bond yields will remain low.
On the other hand, the switch from a dollar peg to a currency basket may cause China to
diversify its reserves away from dollars. It is unlikely to dump its dollars, but it could well reduce
its new purchases of Treasury bonds in favour of other currencies. And, if China really has broken
the yuan's link with the dollar, then this could be the trigger for another general slide in the
greenback against the euro, the yen and other currencies, prompting investors to demand higher
yields. The fate of American house prices could thus be determined by unelected bureaucrats in
Beijing rather than the unelected central bankers of the West.
China creates immense opportunities, but it also brings new risks. If it stumbles, or if it
decides to buy fewer American T-bonds, pushing up yields, then America might really have
something to complain about: the first global downturn made in China.
VOCABULARY:
bond yields – доходность облигаций
128
выпускаемых торгово-промышленными корпорациями и используемых для
предоставления кредита под залог недвижимости)
TRANSLATION NOTES:
monetary policy is increasingly being set in Beijing as well as in Washington –
денежно-кредитная политика во все большей степени определяется не только
Вашингтоном, но и Пекином
При переводе фраз с as well as важно сохранить расстановку акцентов. Смысловая
структура фразы такая же, как у русского словосочетания не только, но и. Однако в
переводе на русский язык порядок следования компонентов меняется.
129
The G7 again committed itself to actions to raise national savings in the US and promote
domestic-led growth in Europe and Japan. It also called for greater exchange rate flexibility in
Asian emerging markets.
Repeating its standard language that exchange rates should reflect economic fundamentals,
the G7 singled out China. "We expect that further flexible implementation of China's currency sys-
tem would improve the functioning and the stability of the global economy and the international
monetary system," it said.
Since China revalued its currency by 2 per cent against the dollar in July there has been
little movement in the renminbi, which is now pegged to a basket of currencies, in spite of a band
that was supposed to allow it to rise or fall against the dollar by 0.3 per cent daily.
John Snow, Treasury secretary, has managed to contain protectionist pressures in the
Congress. The sponsors of a Senate bill imposing large tariffs on Chinese imports have agreed to
delay a vote on the legislation - to provide time for China to demonstrate that its new currency
regime will lead to real reform.
Mr Snow said: "China's new exchange rate system has operated with too much rigidity ...
this poses risks to China's economy and the global economy."
Participants said Jin Renqing, China's finance minister - who was attending a special
session of the meeting together with Brazil, India and South Africa - said China would, over time,
allow market forces to play a greater role in determining the value of the renminbi.
Gordon Brown, UK chancellor of the exchequer, gave a warm welcome to trade
concessions offered by Brazil and India if Europe and the US agreed to deeper cuts in agricultural
trade barriers. France's opposition to reform of European Union farm policies is one of the main
obstacles to progress in the trade talks.
VOCABULARY:
inflationary pressure - инфляционное давление
130
The Bank of Japan is under pressure from the Ministry of Finance and politicians to take
action at a policy board meeting to help check the surge of the yen to a three-year high against the
US dollar.
Some politicians and government officials indicated at the weekend that a deal with the
bank may have been struck, and the bank would make a token concession to loosen monetary
policy. However, it remains unclear whether a majority of the board members will endorse this deal
at the meeting, fearing this would undermine the central bank’s independence.
The Ministry of Finance has been putting pressure on the bank to make a symbolic gesture
of concession to have the way for concerted action with the US to weaken the yen. Japan’s drive to
gain support for joint moves on the yen is to be an issue at next weekend’s meeting of Group of
Seven finance ministers.
Officials are concerned that the strengthening of the yen against the dollar last week could
hamper Japan’s recovery from its worst postwar recession.
The Bank of Japan maintains that loosening monetary policy in unlikely to have much
economic impact as interest rates are close to zero, and there is little demand to borrow funds by
Japanese corporations.
But politicians argue that even a symbolic change in monetary policy may have a
beneficial impact on market psychology, particularly because the bank and ministry appear to have
been at odds in recent days. This has also complicated efforts by Japanese politicians to convince
the US of the merits of joint intervention.
The Nikkei newspaper, the business daily which is often used to express official policy
views, said at the weekend that the bank was planning to ease monetary policy. Bank officials are
said to be mulling three options: increasing the supply of funds to the interbank money market,
buying more short-term government bonds from financial institutions, and engaging in “repo”
operations where it borrows bonds from the market.
VOCABULARY:
make a token concession; make a symbolic gesture of concession – лишь частично
пойти на уступки; чисто символически пойти на компромисс
131
The US economy continues to exhibit overall strength, with few signs of rising wage
pressures but growing evidence of increases in wholesale prices, the Federal Reserve said
yesterday.
In its six-weekly Beige Book report on economic conditions in the various regions of the
US, the FED said growth rates were “moderate to brisk” across most of the country in August and
the first half of this month.
The Beige Book is prepared by the FED’s 12 districts across the US and is a valuable guide
for policymakers as they assess whether or not to raise interest rates to cool the economy.
The FED’s districts reported widespread evidence of increases in wholesale prices, as raw
materials costs surged. These increases followed a pickup in global commodity prices and a decline
in the value of the US dollar this year.
The FED said steelmakers in the Cleveland district, for example, reported price increase of
5-7 per cent, while construction costs in Dallas were up by 5-8 per cent in the first eight months of
the year.
There was also evidence of sharp increase in the cost of companies’ health insurance
benefits for employees.
These two emerging trends may cause some concern at the FED. For the last three weeks
commodity prices, a strong dollar and falling healthcare costs have been critical elements in the
benign performance of overall inflation in the US.
The FED also reported that consumer spending remained strong and industrial activity rose
in many parts of the country, helped in part by resurgent Asian demand. But construction spending,
which has been extremely brisk for most of the year, is starting to slow.
The banking sector remained in generally sound condition, with credit quality overall still
good.
VOCABULARY:
wage pressure - требования увеличения заработной платы
132
VOCABULARY CHECK
1) Налогово-бюджетная политика - это политика правительства в области
налогообложения и государственных расходов.
2) При помощи денежно-кредитной политики ЦБ воздействует на стоимость и
предложение кредита.
3) ФРС состоит из 12 банков, расположенных в различных штатах США и
управляемых Советом директоров.
4) ЦБ США имеет три основных рычага воздействия на количество денег в
обращении – операции на открытом рынке, учетная ставка и резервные требования.
5) Резервные требования – это средства коммерческих банков, которые они
должны держать на беспроцентном счете в Центральном банке.
6) Срок погашения долгосрочных казначейских облигаций США – более 10 лет.
CASE STUDY:
The Asian Crash
The Japanese have an uncanny ability to enhance what they adopt from the
Americans (market economy). Sadly, the Japanese have picked up on crashes as well and
made theirs a lot bigger than any one historical American crash.
The Japanese economy gained extreme strength after its long recovery from the
war and the atomic bombs. By coupling with the other emerging southeast Asian
realization of Keiretsu. The phrase Japan Inc. was coined to describe how Japanese
economy, business, and government were intertwined. Businesses from all over the world
were sending representatives to try and find out how Japan was gaining its success. Soon,
the Asian economy became an alternative for investors who were recently bruised by
1987.
Between 1955 and 1990, land prices in Japan appreciated by 70 times and stocks
increased 100 times over. Trading became the national sport, and the Japanese jumped
into the market with more blind confidence than that of the Americans of the 1920s.
133
During the eighties, large Tokyo firms were worth more individually than all their
American counterparts combined, and Japanese golf courses were worth more than the
Investors may have realized Japan was becoming a bubble, but it was believed
that the high level of collusion between the government and business could sustain the
growth forever. But an inverted growth cycle perpetuated itself when landowning firms
started using the book value of their land to buy stocks that they in turn used to finance
the purchase of American assets (Rockefeller Center is 80% owned by Mitsubishi Estate
Company). Like the prosperity of the Roman Empire, the prosperity of Japan proved to be
its undoing as corruption began to spread throughout the political and business realms.
The government sought to excise the tumor and put a halt to the inflammatory
growth of stocks and real estate by raising interest rates. Regrettably, this didn't have the
slow soothing effect on the market that the government hoped. Instead, it plunged the
TRANSLATION NOTES:
keiretsu – организация бизнеса в Японии, при которой банки и компании тесно связаны
друг с другом; структура основана на перекрестном владении акциями нескольких
компаний
1. Why do you think the parallel in this article is drawn between America and
China?
2. Discuss which emerging countries in Asia may repeat Japan’s economic
experience.
3. Make a list of what you consider to be advantages and disadvantages for
investors to pour their money into the country.
4. Explain the following terms found in the case study: Japan Inc; keiretsu.
5. State the reasons that lead to a financial bubble.
134
6. Is too much regulation bad or good for business and what do you think is or
should be the role of government.
135
Part 1
Unit 4
PRODUCTS,
MARKETING,
ADVERTISING
136
UNIT 4
PRODUCTS, MARKETING, ADVERTISING
137
The channel of distribution is the route that a product takes in reaching its end users.
Outlets must be created which enable the product and the customer to be physically brought
together, and which enable the customer to buy.
There are a number of ways to talk about people who buy things.
An individual who buys products or services for personal use and not for manufacture or
resale is a consumer.
Customers are individuals or organizations who buy things from shops or other
organizations.
Clients are individuals or organizations who pay for services provided by a professional
person or organization such as lawyer or advertising agency.
A business may refer to its customers as its customer base or client base.
Competitors are organizations selling products or services in the same market, and they
can also be products or services themselves. Competitors compete with each other.
An advantage enjoyed by a company with lower costs than a rival, enabling it to sell for
less or make greater profits at the same price as its rival is competitive advantage or competitive
edge.
Competitors in a market are players, and the most important ones are key players.
Companies without competitors are monopolies.
VOCABULARY
marketing - маркетинг: система методов и средств продвижения
товаров или услуг от производителя к потребителю
market-driven - компания, ориентированная на рынок: компания,
market-led акцентирующая внимание на принятие решений с
market focused позиции максимального учета интересов потребителей и
customer focused поддержания стабильной позиции на рынке по
market-oriented company отношению к конкурентам
marketer - специалист по маркетингу
marketeer
market a product - реализовывать товар на рынке; находить рынок сбыта
retailer - розничный торговец: индивидуальный предприниматель
или компания, продающие потребителям товары и
услуги, предназначенные для личного пользования,
последнее звено в каналах распределения, связывающих
производителей и покупателей
retailing - розничная торговля
end user - конечный (непосредственный) потребитель
wholesaler - оптовик, оптовый торговец: крупное коммерческо-
посредническое предприятие, реализующее товары
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другим перепродавцам, розничным торговцам или
крупным промышленным и коммерческим учреждениям,
а не конечным потребителям
distributor - дистрибьютор: независимая фирма по оптовой торговле,
продающая товары всем потребителям, включая других
оптовиков, розничных торговцев, конечных потребителей
channels of distribution - каналы сбыта, сбытовая сеть
outlet - торговая точка; магазин
consumer - потребитель
customer - покупатель, заказчик, клиент
client - клиент, покупатель, заказчик
customer base - клиентурная база: совокупность всех клиентов данной
client base компании (как внутри страны, так и за рубежом)
competitor - конкурент, соперник; участник рынка
player
compete - конкурировать, вести конкурентную борьбу
competitive advantage - конкурентное преимущество: преимущество,
competitive edge обеспечивающее конкурентоспособность, дающее
потенциальное превосходство над конкурентами
monopoly - монополия: рыночная структура, характеризующаяся
наличием на рынке какого-либо товара или услуги
единственного продавца, защищенного от появления
конкурентов любого рода барьерами на вход, а также
многочисленных покупателей, что обеспечивает продавцу
возможность влияния на рыночную цену
COMPREHENSION QUESTIONS:
1) What is the essence of marketing?
2) What was the concept of marketing in the past?
3) What is the difference between a product-focused and a market-oriented company?
4) What decisions must companies and people make if they want to market a product?
5) Why is it so important for a company to have competitive advantages over others?
6) What is the role of an outlet?
7) What do we call the companies which are the most important in the market?
VOCABULARY PRACTICE
Many market-led growth businesses, such as Microsoft and Sony, are in several markets at
once.
The customer is king. There is increased emphasis on the importance of the customer and
meeting the customer’s needs.
Analysts suggest that while Digital has a strong customer base for mini-computers, many
of these users went to other companies when shopping for personal computers.
Fisons has suffered a setback in its ambitions to become a key player in the
pharmaceuticals industry.
American TV is a market-driven industry, and the audience decides the direction it takes.
Competition describes the activity of trying to sell more and be more successful. When
competition is strong, you can say that it is intense, stiff, fierce or tough. If not, it may be described
as low-key.
TEXTS TO TRANSLATE:
41. From Market Driven to Market Driving
Firms are constantly exhorted to become more market driven. However, our study of 25
pioneering companies (e.g. Body Shop, IKEA, Tetra Pak) whose success has been based on radical
business innovation indicates that such companies are better described as market driving. Market
driving companies, who are generally new entrants into an industry, gain a more sustainable
competitive advantage by delivering a leap in customer value through a unique business system.
Market driving strategies entail high risk, but also offer a firm the potential to revolutionise an
industry and reap vast rewards.
The value of being market driven is unquestioned in companies today. Current practice
dictates that success starts with careful market research, investigating the customers' needs, and
developing differentiated products or services for a well-defined segment. Various excellent
companies such as Nestle, Procter & Gamble, and Unilever effectively employ this market driven
approach. However, many successful pioneering companies, who have created new markets and
revolutionised existing industries through radical business innovation like Amazon.com, Body Shop,
CNN, IKEA, Starbucks, and Swatch, are better described as market driving.
Market driving can be distinguished from three other orientations that a company can have
towards the marketplace: sales driven, market driven, and customer driven. These four categories
represent ideal types, no large organisation adopts a single orientation throughout all of its business
units. A sales-driven orientation characterises those firms who view marketing as a tool to sell
whatever their factory produces. Marketing and selling are interchangeable in such companies.
Public utilities, monopolies and some large manufacturing firms often display a sales orientation.
Market driven companies instead place the customers at the start of the process and through careful
market research build appropriate products for, and develop the desired image for their target
segments. Most successful consumer packaged goods companies such as L'Oreal fall in this
category. Customer driven companies, on the other hand, target 'segments of one' and deliver
customised value configurations to each customer. This is sometimes referred to as relationship
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marketing. The Swiss private banking industry, which serves high net worth individuals, is
populated with several such customer driven firms.
Consumers and organisation buyers are excellent at motivating and evaluating incremental
innovation. However, customers are usually unable to conceptualise or readily visualise the benefits
of revolutionary products, concepts, and technologies. Consider the experience of Swatch. The
Swatch models that received the highest intention to purchase in consumer research were those that
looked the most like traditional watches. Those watches, however, ultimately generated very few
sales. Instead, the more radically different Swatch models, which were rated in traditional pre-
launch consumer research as the least likely to be bought, were subsequently the best selling ones.
Had Swatch been guided by that market research, it would not have been a runaway success.
Similarly, customers weren't clamoring for Starbucks coffee, CNN, or overnight small package
delivery prior to their introduction.
Market driving firms instead coalesce around visionaries who saw opportunity where
others did not — an opportunity to fill latent, unmet needs or to offer an unprecedented level of
customer value. In our research, we discovered that generation and development of 'the idea' was a
combination of serendipity, inexperience, and persistence.
VOCABULARY:
coalesce - объединяться, образовывать единое целое
visionary – мечтатель
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Today, CSAB is among the best-performing companies in the US beverage industry,
gradually stealing market share from its bigger rivals Coca-Cola and PepsiCo.
CSAB's success represents a sharp turnround from two years ago, when revenues and
earnings were both in decline.
Reviving the company was crucial for Cadbury because it is the group's biggest source of
profits - providing more than 40 per cent of the total last year - and second biggest source of sales,
after European confectionery.
''Before recovery could be attempted, the group first had to identify the cause of CSAB's
malaise. It concluded that there was little wrong with the company's products but their potential was
being wasted by an inefficient business structure and poor execution.
The restructuring, completed this year, has given the company greater bargaining power
with retailers and given its brands access to a bigger, more powerful salesforce. Individually, most
Cadbury brands are minnows compared with those of Coke and Pepsi; together, they create a
formidable portfolio.
Restructuring has brought increased efficiency, with cost savings projected to reach $120m
a year. Headcount has been reduced by at least 250 and several surplus factories and offices have
closed. Advertising spending has been cut by $35m by replacing multiple agencies with a single
contract.
Perhaps the biggest benefit of restructuring, however, was the opportunity it provided to
change the culture of the company and shake up an underperforming management. The overhaul
was led by Gil Cassagne, promoted from head of the group's Asia-Pacific business to president of
CSAB. "Of the company's top 160 managers, 60 are new to their positions," he says. "Restructuring
has allowed us to set new standards in terms of performance and expectations."
In Mr Cassagne's first full year at the helm, sales increased by 2 per cent and operating
profits by 5 per cent - and the positive trends have accelerated this year.
Despite its progress over the past two years, CSAB still faces tough challenges. Although
Snapple has returned to growth following three years of stagnation, the brand continues to lose
share of the iced tea market. And sales of 7-Up are still declining although the pace has slowed. The
company is attempting to inject fresh life into both brands through increased advertising and new,
health-oriented products, including 7-Up Plus, a reduced-sugar drink with added fruit juice and
vitamins.
Cadbury's strengthening of CSAB contrasts with its withdrawal from beverages elsewhere
in the world. Last month, it sold the remainder of its European soft drinks business for €1.85bn
($2.2bn) to a private equity consortium led by Blackstone Group and Lion Capital. Cadbury had
already sold much of its non-US beverage interests to Coca-Cola seven years ago. Following the
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latest disposal, the group remains active in only four drinks markets - the US, Canada, Mexico and
Australia.
Some analysts have predicted that Cadbury may eventually withdraw from beverages
altogether, freeing the group to focus solely on confectionery - in particular its fast-growing
chewing gum brands.
But, while ruling nothing out, Todd Stitzer, group chief executive, says he has no plans for
more disposals. Selling the European beverage business, which accounted for just 10 per cent of
group sales, made sense, he argues, because it lacked the scale to compete effectively with Coke
and Pepsi.
CSAB, in contrast, has a powerful 12 per cent of the $95bn US non-alcoholic beverage
market and 17 per cent of the soft drink segment.
"Our European beverages are a good business but they need more critical mass and more
investment," says Mr Stitzer.
"We already have that critical mass in the US. The money we would have had to invest in
Europe would be better invested in America, where we can do it more efficiently."
VOCABULARY:
listed company (Syn: quoted company) – компания, акции которой котируются на
фондовой бирже
TRANSLATION NOTES:
…with cost savings projected to reach $120m a year - (См. часть Ш, раздел 3, § 6)
The money we would have had to invest in Europe would be better invested in Amer-
ica… (См. часть Ш, раздел 3, §11)
VOCABULARY CHECK
1) Маркетинг – понятие более емкое, нежели просто реклама и продвижение
(продажа) товара на рынке.
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2) Компания, ориентированная на рынок, очень быстро реагирует на все
потребности и изменения конъюнктуры рынка.
3) Розничные торговцы (продавцы) закупают товары в больших количествах у
производителей или импортеров для дальнейшей их продажи индивидуальным клиентам или
конечным потребителям.
4) Компании, не имеющие конкурентов, называются монополиями.
5) Сравнительные (конкурентные) преимущества дают возможность компаниям
продавать товар по ценам более низким, нежели у конкурентов.
6) Конкурент – физическое или юридическое лицо, которое производит товары
или предоставляет услуги, которые также производят или предоставляют другие фирмы.
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Pricing: this refers to the process of setting a price for a product, including discounts. The
marketing view of pricing takes account of the value of a product, its quality, the ability of the
customer to pay, the volume of sales required, the level of market saturation and the prices charged
by the competition. Too low a price can reduce the number of sales just as significantly as too high
a price. A low price may increase sales but not as profitably as fixing a high, yet still popular, price.
As fixed costs stay fixed whatever the volume of sales, there is usually no such thing as a 'profit
margin' on any single product.
A product may be seen as expensive or cheap, but ‘expensive’ may imply ‘too expensive’
and ‘cheap’ is often used to show disapproval of poor quality. A way of getting round this is to say
that something is high-priced or low-priced. Similarly, things may be mid-priced.
A product may have an ‘official’ list price, but this price may in practice rarely be charged
because of discounting by sellers who offer a lower price by giving a discount.
When prices are reduced, there are price cuts. When a business sells a product at a lower
price than its competitors, it undercuts them.
Companies responding to each others’ price cuts by repeatedly cutting prices engage in
price wars.
When a foreign company is believed to be selling products at less than what it costs to
make them, or at less than the price it charges in its home market, it is accused of dumping.
Placement (or distribution): this refers to how the product gets to the customer; for
example, point of sale placement or retailing getting the product to the customer. Decisions have to
be made about the channels of distribution and delivery arrangements.
Promotion: presenting the product to the customer. Promotion involves considering the
packaging and presentation of the product, its image, the product name, advertising and slogans,
brochures, literature, price lists, after-sales service and training, trade exhibitions or fairs, public
relations, publicity, and personal selling, where the seller develops a relationship with the customer.
Every product must possess a unique selling proposition (USP) - features and benefits that make it
unlike any other product in its market.
In promoting a product, the attention of potential customers is attracted and an interest in
the product aroused, creating a desire for the product and encouraging customers to take prompt
action (AIDA).
For a marketing plan to be successful, the mix of the four "p's" must reflect the wants and
desires of the consumers in the target market. Trying to convince a market segment to buy
something they don't want is extremely expensive and seldom successful. Marketers depend on
marketing research to determine what consumers want and what they are willing to pay for.
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Marketers hope that this process will give them a sustainable competitive advantage. Marketing
management is the practical application of this process.
When companies try to identify or appeal to specific groups of customers, they talk about
segmenting a market in a process of segmentation.
Market segmentation is the process of grouping a market into smaller subgroups. It is
derived from the recognition that the total market is often made up of submarkets (called segments).
These segments are homogenous within (i.e. people in the segment are similar to each other in their
attitudes about certain variables). Because of this intra-group similarity, they are likely to respond
somewhat similarly to a given marketing strategy. That is, they are likely to have similar feelings
about a marketing mix comprised of a given product, sold at a given price, distributed in a certain
way, and promoted in a certain way
Market share is the proportion of sales that a company or a product has in a particular
market. The market leader is the company or product with the biggest share.
A product or business generating a lot of profit is a money spinner.
A cash cow is a profitable product or business with high market share in a low-growth
market, but it is also used to mean any profitable product or business generating a steady flow of
sales revenues.
A loss leader is a product that has a price set below the operating margin. This results in a
loss to the enterprise on that particular item, but this is done in the hope that it will draw customers
into the store and that some of those customers will buy other, higher margin items
Market growth is the rate at which the overall market is growing (or not, as the case may
be).
VOCABULARY
marketing mix - комплекс маркетинга, маркетинг-микс: набор основных
компонентов маркетингового воздействия, поддающихся
контролю со стороны фирмы и используемых ею при продаже
товара в стремлении вызвать желаемую ответную реакцию со
стороны рынка; выделяют 4 основных компонента комплекса
маркетинга: товар, цена, место распространения и методы
стимулирования
four P's of marketing - четыре P маркетинга: четыре основных элемента маркетинга:
продукт (product), цена (price), место (place), продвижение
(promotion)
promotion - содействие, поощрение, стимулирование, раскрутка,
продвижение, рекламирование: процесс воздействия на рост или
развитие чего-либо (компании, продаж товара) в положительном
направлении
physical evidence - вещественное доказательство
146
market saturation - насыщенность (насыщение) рынка: ситуация на рынке, когда
весь имеющийся на рынке спрос на определенный товар
полностью удовлетворен
high-priced - дорогостоящий
low-priced - недорогой
discounting - предоставление скидки
price cutting - снижение цен
undercut - сбивать цены; продавать по более низким ценам (чем конкурент)
price war - ценовая война: конкуренция производителей, основанная на
агрессивном снижении цен
dumping - демпинг: продажа товара на внешнем рынке по ценам ниже
себестоимости или ниже средней цены данного товара на
внутреннем рынке
point of sale - место продажи, пункт продажи, место покупки (напр., магазин,
касса магазина, торговая точка, офис дистрибьютора)
unique selling proposition - уникальное торговое предложение (УТП) (теория,
разработанная американским специалистом рекламы Россером
Ривсом; УТП предусматривает обязательное наличие в рекламе
трех составляющих: реклама должна предлагать потребителю
конкретную выгоду, предложение должно быть уникальным в
данной сфере, предложение должно быть актуальным и
достаточно привлекательным)
AIDA - формула рекламного воздействия на аудиторию: привлечь
(Attention + Interest + внимание, вызвать интерес, вызвать желание воспользоваться
Desire + Action) рекламным предложением, побудить к покупке (по первым
буквам английских слов "внимание", "интерес", "желание",
"действие")
target market - целевой рынок: сегменты рынка, на которых фирма
сосредоточивает свои основные усилия
market research - маркетинговое исследование, маркетинговый анализ: сбор
marketing research данных о нуждах потребителей, о конкурентах, о характере
marketing analysis товара на рынке для разработки новых идей и стратегий
маркетинга
market segmentation - сегментация (сегментирование) рынка, рыночная сегментация:
разделение рынка на отдельные группы покупателей,
обладающие сходными характеристиками или сходным уровнем
потребностей, отличными от характеристик и потребностей
других сегментов
segment - сегмент: группа покупателей внутри рынка, выделенная по
каким-либо признакам
market share - доля рынка: удельный вес компании в общем объеме рыночных
продаж
market leader - лидер рынка, рыночный лидер: компания, занимающая самую
большую долю рынка
money spinner - товар или бизнес, который дает непрерывный приток наличных
cash cow денег, или надежная и очень доходная компания
loss leader - убыточный лидер: товар, предлагаемый в убыток (по цене ниже
себестоимости) в расчете на привлечение в магазин большого
количества покупателей, которые, попав туда, вероятно, будут
приобретать и другие, более дорогие товары
market growth rate - темпы роста рынка
147
COMPREHENSION QUESTIONS:
1) What is a marketing mix?
2) What causes price wars?
3) What does the marketing view of pricing take account of?
4) When are companies accused of dumping and why?
5) What do abbreviations USP and AIDA stand for?
6) Why do marketers depend on marketing research?
7) What is market segmentation? Why is it important to a seller?
8) What company is called the market leader?
9) What is the purpose of creating a loss leader?
VOCABULARY PRACTICE
The marketing mix model (also known as the 4 P’s) can be used by marketers as a tool to
assist in implementing the marketing strategy. Marketing managers use this method to attempt to
generate the optimal response in the target market by blending 4 (or 5, or 7) variables in an
optimal way.
A dairy cow is an example of a cash cow, as after the initial capital outlay has been paid
off, the animal continues to produce milk for many years to come requiring little maintenance. A
cash cow requires little investment capital and perennially provides positive cash flows, which can
be allocated to other divisions within the corporation
As in so many other Japanese industries, the market leader at home, Toyota, is not the
strongest exporter.
For all its other businesses, Gillette means one thing to consumers world-wide: shaving.
Gillette dominates the business in the US with a market share of about 64%.
The introduction of the lower-priced Cadillac Cimaron model is thought to have led to
declines in image and sales for the entire Cadillac division.
In the late 1990s, Internet use was doubling every 100 days. Market growth was
incredible.
Women are a particularly interesting target for the Volvo V70. They are an important
market segment for Volvo.
The Softco software company divides the software market into large companies, small
companies, home office users, and leisure users. This is its market segmentation.
TEXTS TO TRANSLATE:
43. Saturated Retail Market Could Limit Expansion
148
China's retail market is becoming increasingly saturated, which will likely limit expansion
opportunities for overseas retailers, according to a recent study.
China slipped one spot to No. 5 on a list of retail markets in emerging economies. India
retained its position as the world's most attractive emerging market, according to the 2006 Global
Retail Development Index, an annual study on emerging market by ATKearney, a global strategic
management consulting firm.
It ranks the investment attractiveness of 30 emerging markets based on country risk,
population, business efficiency, modern retail sales area per resident, and number of international
retailers.
"Market saturation in China is on the rise as more than 40 foreign retailers have entered the
market to date," said the report, mentioning foreign retailers are fueling the rapid growth of China's
retail market.
China's retail sales grew 12.8 percent to 1.84 trillion yuan (US$230 billion) in the first
quarter of this year after jumping 12.9 percent to 6.72 trillion yuan the year before.
Shanghai alone was home to 115 hypermarket outlets covering more than 5,000 square
meters in floor space, by the end of last year. One hundred of those stores are owned by overseas
retailers.
Despite growing saturation, many retailers continue to increase their market presence.
French-based Carrefour SA, the world's second-largest retailer, opened 14 stores across
China last year. The company, which first entered China in the early 1990s, now has 73 outlets on
the mainland.
"China remains one of the most attractive markets to us and we plan to further speed up
our expansion in the rapidly developing country," said Wang Xiaozhong, a spokesman for
Carrefour China.
Wal-Mart Stores Inc last month said it plans to hire up to 150,000 employees in China over
the next five years - five times its current work force, to help its expansion in the country. Running
about 50 stores in China including two in Shanghai, the world's largest retailer plans to add one in
the city's suburban Jiading District early next year.
149
Terminus railway station, bought him a low-end Nokia 1100 handset. Shelke had coveted one for
years. And, now, "my stock has gone up considerably with my poor relatives, as I can talk to my
son whenever I want," he says.
Shelke's small step into the world of wireless communications is part of a much larger
drama unfolding in the Indian telecom market, once a backwater but now the world's fastest-
growing after China. The number of fixed and wireless telephone connections has doubled in the
past two years, to about 150 million, and Indians are signing up for mobile-phone service at an
extraordinary five million new wireless connections a month. The Ministry of Telecom has set a
target for India to have 250 million connections and mobile coverage for 85 percent of the
country—from about 30 percent today— some time in 2007.
While India has a very long way to go in establishing a nationwide network of landline
telecom networks, let alone high-speed broadband service, paradoxically, the country could
overtake China in the next several years in terms of mobile-phone subscription growth. Rolling out
towers and base stations to support wireless networks certainly isn't cheap. But it likely will be
wireless networks—not copper-wire fixed lines—that do most to pull India out of the
telecommunication dark ages.
India's rise as a mobile phone megamarket also comes at a time of market saturation in
Europe, Japan, and the U.S. Global handset makers such as Nokia, Motorola and LG Electronics all
see emerging markets such as India as key revenue drivers for the industry in the years ahead. The
trick in India is positioning stellar brands at the low end of the market. Nokia, for instance, sells
about 45 models in India. Yet its biggest seller, accounting for 15 percent of sales in India, is the
basic 1100 model for $44 that is turning heads in villages like Latur. Motorola will launch a handset
for under $30 in October.
Nokia has established a big, early lead in India with a dominant 63 percent share, followed
by LG (13 percent), Motorola (8.5 percent) and Samsung (3.5 percent), which may have made a
strategic mistake globally by sticking to high-end, feature-loaded handsets.
There could be rollicking good times ahead for handset makers with the right business
model in India. Analysts think there is a replacement market in the 85 million range (mostly better-
off urban dwellers) already in place. Moreover, India's relatively young population—it is home to
the biggest under-25 age cohort on the planet—suggests a steady stream of first-time subscribers.
Early in 2006 Nokia opened a handset factory in Madras that is churning out one million handsets a
month, and company executives think they could eventually sell 400 million mobile phones in
India.
That said, there are huge challenges that, if unresolved, could disrupt the India growth
curve. To really develop India's full potential, local telecom providers will need to spend massive
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amounts of money to expand coverage to the country's sprawling rural regions. "A lot depends on
how fast the players roll out their networks into the rural hinterland," says Kuldeep Goyal, a general
manager with the government-owned telecom carrier BSNL.
The good news is that sizable investments are underway. BSNL is spending around $4
billion over the next three years on rural coverage as well as broadband and optical fiber network
expansion. In its largest markets, such as the states of Maharashtra and Goa, it will increase its
1,200 base stations to 3,000 by March of 2007. Another major India telecom, Reliance Infocomm,
is expected to invest around $550 million through the end of the decade, mainly outside of major
urban centers.
VOCABULARY:
roll out - зд. производить в большом количестве
TRANSLATION NOTES:
That said, there are huge challenges that, if unresolved, could disrupt the India growth
curve. – Однако (тем не менее), существуют очень серьёзные проблемы, которые, если
их не разрешить, могут негативно отразиться на показателях экономического роста
Индии. (См. часть Ш, раздел 10)
VOCABULARY CHECK
1) Маркетинговая «смесь» (маркетинг-микс) включает в себя анализ собственно
продукции, цен, схемы распространения, рекламы, а также анализ потенциальных продавцов
и покупателей.
2) Доля рынка – это удельный вес данной компании или товара в обороте всего
рынка.
3) Сегментация рынка – разделение рынка на подгруппы на основе возраста, уровня
доходов и др. характеристик покупателей с целью выяснения их интересов и определение
предложения товара конкретно для каждой группы населения.
4) "Денежная корова" - направление деятельности или товар с низкими темпами
роста и большой долей рынка. Компания использует такой бизнес для оплаты своих счетов и
для поддержки других элементов бизнеса, требующих инвестирования.
5) Продажа товара по цене ниже цены конкурента ведет к ценовым войнам.
6) Насыщение рынка – это ситуация, когда весь имеющийся на рынке спрос на
определенный товар полностью удовлетворен.
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SECTION 3 PRODUCTS, SERVICES AND BRANDS;
UPMARKET AND DOWNMARKET
LEAD-IN
In marketing, a product is anything that can be offered to a market that might satisfy a
want or need. However it is much more than just a physical object. It is the complete bundle of
benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the
sum of all physical, psychological, symbolic, and service attributes
Products are sometimes referred to as goods, for example in the expression fast-moving
consumer goods, or FMCG.
White goods are things such as washing machines and refrigerators. Brown goods are
things such as televisions and hi-fi equipment. Goods are also referred to formally as merchandise.
Services are activities such as banking, tourism, or entertainment that contributes to the
economy but which may not directly involve manufacturing. Services may be referred to informally
as products.
Products have a life-cycle, and forward-thinking companies are continually developing
new products to replace products whose sales are declining and coming to the end of their lives. A
'total product' includes the image of the product as well as its features and benefits. In marketing
terms, political candidates and non-profit-making public services are also 'products' that people
must be persuaded to 'buy' and which have to be presented and packaged attractively .
New products are introduced or launched onto the market. If a defect is found in a product
after it is launched, it may be recalled: customers may be asked to return the defective product for
checks. A product that a company no longer wants to make available is withdrawn from the market.
Products, for example skis, exist in different models. Some are basic, some more
sophisticated. The cheapest skis are low-end or bottom-end. The most expensive ones are high-end
or top-end products, designed for experienced users (or people with a lot of money!). The cheapest
entry-level skis are for beginners who have never bought skis before. Those in between are mid-
range. If you buy sophisticated skis to replace basic ones, you trade up and move upmarket. If you
buy cheaper skis after buying more expensive ones, you trade down and move downmarket.
Mass market describes goods that sell in large quantities and the people who buy them.
For example, family cars are a mass market product. A niche or niche market is a small group of
buyers with special needs, which may be profitable to sell to. For example, sports cars are a niche in
the car industry.
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A brand is the symbolic embodiment of all the information connected with a product or
service. A brand typically includes a name, logo, and other visual elements such as images or
symbols. It also encompasses the set of expectations associated with a product or service which
typically arise in the minds of people.
Marketers seek to develop the expectations comprising the brand experience through
branding, so that a brand carries the "promise" that a product or service has a certain quality or
characteristic which make it special or unique. A brand image may be developed by attributing a
"personality" to or associating an "image" with a product or service, whereby the personality or
image is "branded" into the consciousness of consumers. A brand which is widely known in the
marketplace acquires brand recognition or brand awareness.
Products that are not branded, not sold under a brand name, are generic products, or
generics. This applies especially to pharmaceutical drugs.
VOCABULARY
product - продукция, продукт; товары (произведенные товары и услуги
(напр., компанией или страной)); объем продукции
goods - товар; товары
commodities
merchandise
durable goods - товары длительного пользования
manufactured goods - фабрикаты, промышленные товары
consumer goods - потребительские товары, товары народного потребления
fast-moving consumer - ходовые товары широкого потребления, товары повседневного
goods (FMCG) спроса
white goods - “белые” товары: техника, используемая в домашнем хозяйстве и
обычно окрашенная в белый цвет (отсюда и название):
холодильники, посудомоечные машины, микроволновые печи,
стиральные машины и т. д.
brown goods - "коричневые" товары: электрооборудование для домашнего
хозяйства и отдыха: тостеры, утюги, электрические чайники,
телевизоры, радиоприемники, стереосистемы и т. д.
services - услуги, обслуживание, сервис
life cycle - жизненный цикл: совокупность всех стадий жизни продукта - от
разработки концепции до прекращения эксплуатации
introduce a product - выводить (новый товар на рынок)
launch a product
recall a product - отозвать товар с рынка; прекратить продажу товара
withdraw a product
downmarket (BrE) - нижние эшелоны рынка: рынок товаров для небогатых
low-end market покупателей, предпочитающих покупать товары по низким или
bottom-end market сниженным ценам
lower end of the market
downscale market (AmE)
upmarket (BrE) - элитный рынок, верхние эшелоны рынка: рынок товаров для
high- end market состоятельных потребителей с уровнем дохода и образования
153
high-income market выше среднего
top-end market
upscale market (AmE)
entry-level - доступный по деньгам для первичных покупателей того или
иного товара; упрощенный, упрощенной модели (простые в
дизайне и недорогие предметы техники)
trade up - менять: продавать менее дорогую вещь с целью покупки более
дорогой вещи
trade down - менять: продавать что-либо дорогое с целью покупки дешевого
(напр. покупать квартиру с меньшей площадью после продажи
квартиры с большей площадью)
mass market - рынок товаров массового производства
niche market - сегмент (сектор) рынка: группа потребителей на рынке,
имеющих схожие потребности
brand - торговая марка, товарный знак, бренд: определенное название,
знак, символ или дизайн товара, идентифицируемые в сознании
потребителей с данным товаром и отличающие его от товаров
конкурентов
logo - логотип
logotype
branding - брендинг, создание бренда, продвижение торговой марки
brand recognition - узнаваемость марки, осведомленность о марке
brand awareness - знание марки: осознание широкой публикой факта
существования марки и качества выпускаемых под ним
продуктов
branded goods - марочные товары: товары, продаваемые под торговой маркой
(производителя или продавца), т. е. имеющие
идентифицирующие их названия и символы
generic product - немарочный товар: товар, не имеющий торговой марки; не
generics рекламируется, имеет дешевую упаковку и продается по ценам
ниже сходного продукта известной фирмы
COMPREHENSION QUESTIONS:
1) What can the term “product” refer to?
2) What goods are called white goods? brown goods?
3) Give examples of fast-moving consumer goods.
4) What is a “total product”?
5) When are products recalled from the market?
6) What terms are used to describe cheap and expensive products?
7) What is the difference between upmarket and downmarket?
8) What does a life-cycle of a product depend on?
9) What is a brand of a product and what does it include?
10) What are the ways of developing a brand image?
154
VOCABULARY PRACTICE
Our poll shows significant rises in those who say they plan to buy a TV or video, though
there is still little movement in the index for white goods such as fridges and freezers.
The popularity of home entertainment will be maintained over the period, with sales of
brown goods such as televisions and hi-fi equipment, set to increase by 35 per cent, the report says.
Dell has made its biggest product launch so far, with 18 new PCs to replace its current
line.
Marketing programs are designed to enhance brand awareness and establish favorable,
strong, and unique brand associations in memory so that consumers purchase the product or
service.
Health authorities all round the world are trying to cut drug costs by using generic
products and restricting price increases on branded drugs.
With this type of equipment in the US, product life cycles are so short that product
launches are very frequent.
TEXTS TO TRANSLATE:
45. LG's White-Hot White Goods
The South Korean home-appliance maker is ringing up huge overseas sales
Most Koreans remember the Asian financial crisis as the toughest period since the Korean
War. For Kim Ssang Soo, president of LG Electronics Inc's white goods business, it was a godsend.
After the Korean won tumbled by a third, he seized the chance to boost exports of his washers,
refrigerators, and air conditioners. "The crisis certainly was a huge stepping stone for us," Kim says.
Now, Kim is stepping all over competitors in the home-appliance industry. Overseas sales
- in countries ranging from China to Chile and Saudi Arabia to Sweden — today account for 70%
of LG's appliance revenues, up from 30% before the crisis. The unit expects revenues of $6.2 billion
this year, more than double its sales of $2.7 billion a year earlier. The division now contributes 60%
of LG Electronics' profits and 35% of sales, compared with 30% and 25% before the meltdown. LG
has become the world's largest and most profitable home air-conditioner maker and the sixth-largest
manufacturer of white goods. That's far from its stature in the mid-1990s, when.the unit was
unfamiliar outside Korea and barely breaking even. LG's success is "proof that misfortune comes
with an opportunity for the prepared," Kim says.
When the storm hit, Kim was indeed prepared. As the chief of LG's main factory for air
conditioners and washing machines, Kim adopted the program of improving productivity known as
"Six Sigma". A key part of Kim's plan: "tear-down-and-redesign teams", which helped trim costs by
155
one-third in just two years. Productivity jumped 50% after he shortened assembly lines and
streamlined product development. By beefing up quality control, he cut defects by a third in three
years. All of this helped Kim compete with the world's best appliance makers when the currency
devaluation made LG's products more attractive abroad.
Kim, an LG lifer who has led its global white goods operations since 1996, now faces his
toughest test. To continue his winning streak, the 57-year-old manager must intensify LG's presence
in the US and Europe. While LG is dominant in emerging markets, it trails local rivals in Europe.
And it's little known in the US despite the fact that it builds air conditioners, fridges, and
microwaves for the likes of Whirlpool Corp. and General Electric Co. "There's no question, that LG
has become one of the most competitive appliance makers, but building products and brand and
images are two different animals," reckons James Kim, an electronics analyst at Salomon Smith
Barney in Seoul. LG started selling air conditioners and washing machines under its own brand
name this year in the US. To raise its profile, LG plans to boost its US ad budget to $20 million, up
from virtually nothing this year.
Kim's other challenge is to keep his company innovating. So far, LG has built mostly
midmarket and low-end products; it needs to strengthen its presence at the high end. One hot
prospect: the $1,250 Tromm washing machine, which is quieter and more efficient than traditional
models. The company is also rolling out better-designed products, such as Whisen air conditioners
that are thin enough to hang on a wall. "We can no longer take cues from others. We should be the
one introducing products with new features," says Kang Tae Kil, LG's vice-president for strategic
planning.
Kim's ultimate goal: Making LG one of the world's top three appliance makers. He expects
sales to top $8 billion, which would put LG ahead of GE, Bosch und Siemens Hausgerate, and
Matsushita, and on the heels of leaders Whirlpool and Electrolux. But since 1998, the Korean won
has regained 16% of its value against the dollar, meaning Kim is losing one of his primary
advantages. His answer: Like everyone else, he's moving production to China- and to India,
Mexico, and Vietnam. By next year, some 60% of the 11 million microwave ovens LG makes every
year, and half of its 7 million air conditioners, will be manufactured in China.
The strength of the white goods unit may be giving LG a new on life. Although it's Korea's
No. 2 consumer-electronics maker, LG had long been relegated to a supporting role while rival
Samsung Electronics Co. took its star turn. For the past three years, LG has spun its wheels with a
$3 billion investment in telecom gear that has gone nowhere. Today, though, LG has overtaken
Samsung in white goods. The unit's profits are a cushion for the company, throwing off the cash it
needs to expand sales of mobile phones, digital TVs, and plasma-display panels. The appliance
156
business, it seems, might be stepping stone LG needs to become a global player in consumer
electronics.
VOCABULARY:
it was a godsend… - это явилось большой удачей для компании, это было настоящим
подарком судьбы
the unit’s profits are a cushion for the company – прибыли, получаемые этим
подразделением компании, способствуют росту всей компании
157
The reason is simple. Women control 80 per cent of household purchases in many
countries. And mothers between the ages of 45 and 64 have the highest disposable income of all.
"Irrespective of social, ethnic or demographic backgrounds, when their children leave
home a mother reappraises many - if not all aspects of her life," Mr Edwards adds. Our research
shows when kids leave home a mother is likely to change 80 per cent of the branded goods she
regularly buys."
"Few [brand owners] can see beyond the stereotype of two parents, two kids, let alone
understand what happens to those parents' brand loyalties once those kids have grown up,” she says.
The challenge household brands face is to understand how to capitalise on empty nesters'
spending power and desire to try something new. The best approach is to evolve both their products
and marketing strategies, according to a report published in the US last month by Imago Creative,
an agency specialising in marketing to women over 40.
Empty nesters' mixed emotions about their children's departure present the potential for
brands to reassure as well as capitalise on new leisure time. They could also tap mothers' growing
interest in communications technologies to stay in touch with offspring, and their desire to redefine
themselves through new interests.
Mr Edwards says it is important that retailers and marketers respond proactively when their
customers experience a big lifestyle change. "There's clear potential for brand owners to make
better use of consumer data to pre-empt when a mother's children will leave home and target
communications accordingly. It is also clear there is a role for brands to offer them support and
advice," he says.
A growing number of brand owners are modifying products for older consumers. US sports
shoe brand New Balance, for example, is rolling out a wider range of products designed for older
people, and advertising designed to appeal to an over 45-year-old audience.
Mr Edwards hopes more brands will follow Pillsbury's example. "More accurately
representing these consumers' lifestyle in advertising is just the tip of a very big iceberg."
VOCABULARY:
brand new opportunity – абсолютно новая возможность
158
TRANSLATION NOTES:
It sounds like an advertising gimmick yet it is anything but – Это звучит как рекламный
трюк, однако отнюдь им не является
Обратите внимание на значение yet – однако и but - кроме
159
mentioned. There were often long delays, from four months to two years, in getting documents of
approval for a new product to enter Japan and delays in getting trade marks registered.
Exporters were also not impressed by the expensive and complex distribution system in
Japan. Too many middle-men were involved before the goods reached retail outlets. These outlets
were often located in narrow, inaccessible streets, which made distribution expensive. Such costs
could add as much as 45% to a retail item. Coupled with higher production overheads, they could
make foreign goods very expensive.
The Japanese reacted swiftly to these attacks although the steps they took sometimes
created other problems. They agreed to exercise self-restraint by limiting steel exports to Europe,
but then they increased their sales efforts in the US, with the result that US steel manufacturers
started crying out for protection of their industry; no sooner had Japanese companies agreed to limit
car sales in Britain — a vulnerable market — than they began intensifying their sales drive in other
European countries, causing concern to car manufacturers in these areas. Another of Japan's
concessions was to raise ship-building prices and restrain exports, limiting their share of the 'world
market to about 50% instead of a potential 70%.
TRANSLATION NOTES:
…the exporting companies concerned were said to receive powerful government support
- …отмечалось (говорилось), что соответствующие компании (о которых идет речь)
получают мощную государственную поддержку (См. часть Ш, раздел 2, § 2)
VOCABULARY CHECK
1) Услуги – это те же товары, но они напрямую не включены в процесс
производства.
2) Компания отзывает свой товар с рынка, если при его продаже обнаруживается
брак.
3) Каждый товар имеет свой «жизненный цикл». Устаревшие товары заменяются
новыми.
4) Родственный продукт (дженерикс) – продукт, который не имеет известного
бренда, не рекламируется, имеет дешевую упаковку и продается по ценам ниже сходного
продукта известной фирмы.
5) «Бренд» - марка, тип, сорт, название или символ товара или услуги, которые
отличают их от товаров или услуг конкурентов.
160
SECTION 4 ADVERTSING AND PROMOTION
LEAD-IN
Whereas marketing aims to identify markets that will purchase a product (business) or
support an idea and then facilitate that purchase, advertising is the paid communication by which
information about the product or idea is transmitted to potential consumers.
In general, advertising is used to convey availability of a "product" (which can be a
physical product, a service, or an idea) and to provide information regarding the product. This can
stimulate demand for the product, one of the main objectives of advertising. More specifically, there
are three generic objectives of advertisements : communicate information about a particular
product, service, or brand (including announcing the existence of the produce, where to purchase it,
and how to use it), persuade people to buy the product, and keep the organization in the public eye
(called institutional advertising).
Some commercial advertising media include billboards or hoardings, printed flyers, radio,
cinema and television ads or commercials, web banners, bus stop benches, magazines, newspapers,
sides of buses, taxicab doors and roof mounts, musical stage shows, elastic bands on disposable
diapers, stickers on apples in supermarkets, and the backs of event tickets and supermarket receipts.
Any place an "identified" sponsor pays to deliver their message through a medium is advertising.
Product endorsements are when famous people recommend a product.
Advertising is often designed and managed by advertising agencies.
An advertising campaign consists of a series of advertisements, adverts, or ads which are
run in various media.
Another way of telling people about products is by direct marketing, using techniques like
mailings, also known as mail shots: these are often referred to derisively by recipients as junk mail.
The promotion of a product may refer to any marketing effort to encourage people to buy
it, including advertising. However, promotion is often used to refer specifically to marketing
activities other than advertising: offers such as discounts, cut-price vouchers, free gifts, displays or
events at the point-of-sale, the place in the retail outlet where the product is sold.
Discounts may be given in a sale at a particular time of year such as summer or January,
often to get rid of remaining stock.
Merchandising refers to the promotion of a product by developing strategies for
packaging, displaying, and publicizing it, and more commonly, to commercial products that are
developed as spin-offs from the success of a movie, TV program, sports team, or event such as toys
and T-shirts.
161
VOCABULARY
advertising - рекламное дело, рекламная деятельность, рекламный бизнес
advertisement - реклама, рекламное объявление; объявление
advert
ad
endorsement - свидетельство, рекомендация: высказывание известного в
обществе или в определенных кругах человека, выявляющее его
положительное отношение к качеству определенного продукта,
что используется в рекламных целях
advertising agency - рекламное агентство
advertising campaign - рекламная кампания: комплекс рекламных и сопутствующих
мероприятий, осуществляемых с целью продвижения товара на
рынке и стимулирования продаж
direct marketing - прямой маркетинг: розничная продажа или реклама товара с
выходом непосредственно на потенциального покупателя, для
чего используются такие средства, как почта (в том числе
электронная), телефон, визиты агента по продаже и т. п.
mailing - рассылка, отправка почтой; рассылка рекламных материалов в
mailing shot прямой почтовой рекламе
junk mail - спам, почтовый "мусор": рекламные материалы, рассылаемые
по почте бесплатно, не представляющие для получателя особой
ценности
promotion - рекламный материал: рекламные объявления, листовки,
проспекты, брошюры, плакаты и иные материалы,
используемые с целью продвижения компаний, людей, товаров,
идей
point-of-sale advertising - реклама в местах продаж, реклама на месте покупки (реклама
нового продукта, которая осуществляется непосредственно в
магазине для привлечения потенциальных покупателей)
merchandising - мерчендайзинг, выкладывание: обеспечение эффективности
продаж товара без активного участия специального персонала-
путем удачного размещения товара, эффектного оформления
торгового места, обеспечения достаточного запаса товара на
полке и т. п.
COMPREHENSION QUESTIONS:
1) Why is advertising so important?
2) What are the three generic objectives of advertisements?
3) What are the means of commercial advertising media?
4) What is merchandising?
5) What do firms and companies usually do to get rid of remaining stock?
VOCABULARY PRACTICE
One definition of merchandising is a marketing practice in which the brand or image from
one product or service is used to sell another. It is most prominently seen in connection with films,
usually those in current release and with television shows oriented towards children.
162
Merchandising, especially in connection with child-oriented films and TV shows, often
consists of toys made in the likeness of the show's characters or items which they use.
What we call junk mail is actually the result of direct marketing campaigns designed to get
you to buy a product or service. It's called direct marketing because it attempts to match you and
your buying preferences with offers that are likely to make you buy a product or service.
The agency lost a $15 million account for Nikon cameras when it mistakenly ran an advert
for a new product before it had formally been introduced.
The world’s biggest advertising campaign rests on the denim-clad shoulders of that
anonymous cowboy, the Marlboro Man.
Despite heavy promotion, new car sales rose by only 1.7% in August over the figure for
August last year.
Although the number of drug salesmen may decline, firms may still need a big marketing
operation to handle the advertising and point-of sale promotion necessary in retail outlets.
TEXTS TO TRANSLATE:
48.Colgate Glides Past Stumbling Competitors
New products, market share gains and further profit margin improvements contributed to a
10 per cent rise in Colgate-Palmolive's fourth-quarter net income, the toothpaste and soaps maker
said yesterday.
The group has cemented a reputation as one of the more consistent performers in the
household products industry, as peers including Procter & Gamble, Gillette and Dial stumbled last
year.
It said yesterday that net income had risen from $261m to $287m, and share buybacks had
contributed to a 12 per cent increase in diluted earnings per share to 46 cents.
For the full year, diluted earnings were up 16 per cent at $1.70, and Colgate confirmed
analysts' expectations of double-digit earnings growth in the first quarter and this year.
Although three-quarters of its sales come from overseas, Colgate's North American
division reported the strongest growth in the quarter.
North American sales rose 11 per cent on a 10 per cent increase in unit volumes, as
Colgate's market share improved in nine of its 12 main product categories.
Recently introduced products, such as the Actibrush battery-powered toothbrush,
continued to drive growth.
In Latin America, Colgate's largest market, sales grew 8 per cent on a 4 per cent rise in unit
volume, as it stepped up advertising for product launches.
163
European sales declined 8 per cent because of the relative weakness of the euro, but were
up 5 per cent in local currencies.
Hill's Pet Nutrition, the group's pet food division, showed signs of recovery from the
impact of P&G's roll-out of its rival Iams brand. Sales and unit volumes were up 5 per cent for the
quarter.
Reuben Mark, chairman and chief executive, said: "The strength and breadth of our top
line volume growth are extremely encouraging, and reinforce our optimism for the next year."
The group's cash generation was at record levels in the fourth quarter, he said, and its
productivity improvement programmes gave it confidence in surpassing its goal of 55 per cent gross
profit margins by next year.
VOCABULARY:
market share gains - увеличение доли на рынке
share buyback - обратный выкуп акций: выкуп компанией своих собственных акций
на открытом рынке
Обычно к обратному выкупу прибегают, если акции являются недооцененными;
обратный выкуп уменьшает количество акций в обращении, увеличивает доход на
акцию и повышает рыночную стоимость бумаг, оставшихся у акционеров; также
обратный выкуп может являться попыткой защиты от поглощения
diluted earnings per share, diluted EPS, DEPS - разводненная прибыль на акцию
Чистая прибыль, приходящаяся на одну обыкновенную акцию, рассчитанная с
учетом как находящихся в обращении обыкновенных акций, так и акций, которые
могут быть выпущены при конвертации облигаций, привилегированных акций и
некоторых других конвертируемых долговых обязательств
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Analysts said Electrolux appeared to want to send out a relatively downbeat message about
its short-term prospects. But they were encouraged by its comments that deliveries in Europe had
risen 5 per cent in the first two months.
North American consumer goods sales account for 38 per cent of Electrolux's sales, and
European white goods sales make up 34 per cent.
Mr Treschow stuck to his group's overall view that Europe and the rest of the world would
be stronger this year, with weaker sales in the US.
Meanwhile, Wolfgang König, head of Electrolux's home products division (EHP), said the
company was aiming to lift the operating margin in its European consumer goods businesses to 8
per cent by next year from last year's 5.1 per cent.
This would mainly be achieved by cost-cutting, supply chain improvements, and by
expanding sales faster than the market. EHP was aiming to cut its marketing and administration
costs by 1-2 per cent a year, he said. Its overall goal was to achieve a double-digit rise in operating
income this year, compared with SKr2.18bn ($217m) last year.
Last year Electrolux's European consumer goods sales were flat, despite a 5 per cent rise in
volumes, partly because it grew faster in low-margin countries than high-margin countries. It also
suffered cost over-runs as it tried to move to a pan- European based organisation.
Mr König said the group would be seeking to build up its operations in Poland, Russia and
Turkey, either through acquisitions or setting up on its own.
He said the company was considering building a factory in Russia.
VOCABULARY:
disclosure – раскрытие информации, опубликование данных
VOCABULARY CHECK
1) Реклама и создание благоприятных условий для продажи товара на рынке – вот
главные компоненты успеха любой компании.
2) Рекламная кампания – это реклама товара в различных средствах массовой
информации.
165
3) Одной из основных целей рекламы является стимулирование спроса на товар.
4) Компании тратят больше средств на рекламу своей продукции еще до момента
продажи ее на рынке.
5) В определенное время года компании предоставляют скидки с тем, чтобы
сократить запасы товаров.
CASE STUDY:
Chinese Imports Prompt Posco Discounts
domestic prices of its 13 steel products by up to 17 per cent next year to better compete
The South Korean company's move comes just a month after Chinese rival
Baosteel announced a price cut of at least 10 per cent for the first quarter of next year to
"The price cuts are aimed at protecting the local market from the relentless attack
Steel prices generally have been under increasing pressure in recent months
because of a sharp boost in production in China. The China Iron & Steel Association
expects steel capacity on the mainland to reach 490m tonnes this year, fuelled by
Posco, which earlier this month announced price reductions of up to 20 per cent
for its stainless steel products, said yesterday it would cut prices of cold-rolled steel
plates and hot-rolled coil products by 4-17 per cent from January.
Posco's profits by $1bn next year, with earnings per share forecast to drop 43 per cent,
"Inventories are rising due to increased output from China," said Moon Jung up,
166
Posco's latest price cut could put further pressure on global steel companies,
Australia's BlueSeope warned in November that profits for the year would drop
sharply because of steel from China spilling over into other markets, especially in Asia.
Analysts expect iron ore prices to keep rising next year, but coking coal prices to
South Korea's Posco, which sells more than 70 per cent of its output at home,
TRANSLATION NOTES:
…with earnings per share forecast to drop 43 per cent - (См. часть Ш, раздел 4, § 3)
167
VOCABULARY REVISION – UNIT 4
Продвижение товара на рынке; пункт, место продажи товаров; «прямой маркетинг»;
рекламный щит; продажа по бросовым ценам; скидка; прейскурантная цена; процесс
установления цен; узнаваемость данного типа товаров потребителями; внедрение нового
товара на рынке; потребительские товары повседневного спроса; отозвать товар с рынка;
компании, быстро реагирующие на потребности рынка; доля рынка; сегментация рынка;
клиентура; сбыт; конечный потребитель; оптовик; розничный торговец; конкурентные
преимущества; конкурентоспособность; пункты продажи товаров в розницу; товар, товары ;
услуги; марка, символ товара или услуги; товар или бизнес, который дает непрерывный
приток наличных денег; сбивать цены; ценовая война; рекламное агентство; отправка почтой
рекламных объявлений и образцов товаров.
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Part 1
Unit 5
FINANCIAL
INSTRUMENTS
AND STOCK
EXCHANGES
169
UNIT 5
FINANCIAL INSTRUMENTS AND STOCK
EXCHANGES
It is important to understand the distinction between a company financing through debt and
financing through equity. When you buy a debt investment such as a bond, you are guaranteed the
return of your money (the principal) along with promised interest payments. This isn't the case
with an equity investment. By becoming an owner, you assume the risk of the company not being
successful. Just as a small business owner isn't guaranteed a return, neither is a shareholder. As an
owner your claim on assets is lesser than that of creditors. This means that if a company goes
bankrupt and liquidates, a shareholder doesn't get any money until the banks and bondholders have
been paid out. Shareholders earn a lot if a company is successful, but they also stand to lose their
entire investment if the company isn't successful.
It must be emphasized that there are no guarantees when it comes to individual stocks.
Some companies pay out dividends, but many others do not. And there is no obligation to pay out
dividends even for those firms that have traditionally given them. Without dividends an investor can
170
make money on a stock only through its appreciation in the open market. On the downside, any
stock may go bankrupt, in which case your investment is worth nothing.
Although risk might sound all negative, there is also a bright side. Taking-on greater risk
demands a greater return on your investment. This is the reason why stocks have historically
outperformed other investments such as bonds or savings accounts. Over the long term, an
investment in stocks has historically had an average return of around 10%-12%.
There are two main types of shares (stocks): ordinary shares (common stock, equities)
and preference shares (preferred stock).
When people talk about shares in general they are most likely referring to ordinary shares
(common stock). In fact, the majority of stock issued is in this form. Ordinary shares represent
ownership in a company and a claim (dividends) on a portion of profits. Investors get one vote per
share to elect the board members, who oversee the major decisions made by management.
Over the long term, common stock, by means of capital growth, yields higher returns than
almost every other investment. This higher return comes at a cost since common stocks entail the
most risk. If a company goes bankrupt and liquidates, the common shareholders will not receive
money until the creditors, bondholders, and preferred shareholders are paid.
Preference shares represent some degree of ownership in a company but usually don't
come with the same voting rights. (This may vary depending on the company.) With preferred
shares investors are usually guaranteed a fixed dividend forever. This is different than common
stock, which has variable dividends that are never guaranteed. Another advantage is that in the
event of liquidation preferred shareholders are paid off before the common shareholder (but still
after debt holders).
Some people consider preferred stock to be more like debt than equity. A good way to
think of these kinds of shares is to see them as being in between bonds and common shares.
Blue chip shares, blue chip stocks, or blue chips are the safest share investments in
leading companies.
Companies looking for more finance may make a rights issue by offering new shares to
existing shareholders at a discount. Rights issues are referred to informally by commentators as
cash calls.
Buying warrants gives the right to buy a certain number of a company’s shares for a given
price at a later date. Warrants are similar to rights issues except that holders usually have longer in
which to exercise their right to buy shares.
171
VOCABULARY
shares, stocks (count.-BrE) - акции: ценные бумаги, являющиеся титулом собственности
stock (uncount. –AmE) на часть имущества компании
raise capital - привлекать, мобилизовать капитал; получать, собирать
raise finance средства
bond - облигация: долговое обязательство, ценная бумага с
фиксированной процентной ставкой, выпущенная
правительством, государственной или частной компанией для
получения финансовых средств на оговоренный срок
debt financing - долговое [заемное] финансирование: финансирование путем
привлечения заемного капитала (с помощью эмиссии
облигаций или векселей, получения кредита в банке и т. п.), в
отличие от привлечения средств путем выпуска акций либо
финансирования за счет нераспределенной прибыли
equity financing - акционерное финансирование, финансирование за счет
акций
share issue - эмиссия [выпуск] акций
public offering - публичное предложение ценных бумаг, открытое
размещение; предложение ценных бумаг широкому кругу
инвесторов
initial public offering (IPO) - первоначальное публичное предложение акций: первый
flotation выпуск компанией своих акций на рынок (т. е. выпуск на
первичный рынок акций новой компанией или компанией,
которая преобразуется из закрытой в открытую)
float - выпускать в обращение; размещать (ценные бумаги)
listed company - котируемая компания (акции которой зарегистрированы на
quoted company фондовой бирже)
principal - основная сумма (сумма, на которую начисляются проценты)
interest payment -выплата процентов
go bankrupt -обанкротиться
liquidate - ликвидировать (компанию)
dividend - дивиденд: часть прибыли акционерного общества,
подлежащая распределению среди акционеров
savings account - сберегательный счет: счет в банке, приносящий проценты и
предназначенный для хранения сбережений населения
ordinary share - обыкновенная [простая] акция: ценная бумага,
ordinary stock подтверждающая участие в капитале компании и дающая
common stock право на часть капитала компании и часть ее прибыли после
common share распределения среди владельцев облигаций и
привилегированных акций, а также на участие в руководстве
деятельностью компании через голосование на собраниях
акционеров
preference share - привилегированная акция: акция, дающая владельцу
preferred share преимущественное право на получение дивидендов и на часть
preferred stock капитала компании (в случае банкротства) по сравнению с
preference stock обыкновенной акцией; имеет фиксированный размер
дивиденда и обычно не дает права голоса
blue chip stocks - «голубые фишки»: активно торгуемые первоклассные акции,
blue chips риск снижения доходов по которым минимален; обычно это
акции крупных, широкоизвестных компаний. Первоначально
распространившееся в США, название произошло от цвета
172
самых дорогих фишек при игре в покер.
blue chip company - «голубая фишка», первоклассная компания: крупная
солидная компания, известная своей надежностью, качеством
товаров и услуг, стабильной прибылью, а также
выплачивающая дивиденды
rights issue - выпуск [эмиссия] прав: выпуск новых акций, предлагаемый
акционерам компании по более низкой цене, чем рыночная
warrant - варрант: свидетельство, дающее своему держателю право
купить акции или облигации компании по определенной цене
в течение определенного периода
COMPREHENSION QUESTIONS:
1) In what way do companies raise finance?
2) Which way is more advantageous for the company and why?
3) What is IPO?
4) What is the difference between financing through debt and financing through equity?
5) Why have stocks historically outperformed other investments such as bonds and
savings accounts?
6) What are the two main types of shares?
7) What is the difference between preference shares and ordinary ones?
8) What are blue chips? Give examples.
VOCABULARY PRACTICE
Businesses large and small need a capital market in which they can raise finance at the
lowest possible cost.
IPOs can be a risky investment. For the individual investor, it is tough to predict what the
stock will do on its initial day of trading and in the near future since there is often little historical
data with which to analyze the company.
IKEA, despite an estimated annual turnover of $2.5 billion, is still private and is not
quoted on any stock market.
If you buy common stocks, you share directly in the success or failure of the company. If
the company grows or realizes a profit, your income from the stock may increase, or the share price
may climb. On the other hand, if the company goes bankrupt, you could lose your entire investment.
Preferred stocks reduce your risk — but also limit potential reward. The dividends paid on
preferred stocks are fixed and guaranteed. You may even get some of your investment back if the
company goes bankrupt. However, if the company grows or realizes a profit, your dividends stay
the same and the share price increases more slowly than shares of the company’s common stock.
As Britain recovers from recession, companies will seek to raise finance through share
issues. In the coming months, they will publish glossy prospectuses that celebrate their track
records and invite people to part with their capital.
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Under one scheme being considered, the Post Office would be floated (have its shares
sold) on the stock market. This would rise up to $5billion for the government. Ministers are
convinced that a flotation would be popular.
TEXTS TO TRANSLATE:
50. Stocks in trade
NOT so long ago, stockmarkets were derided by critics from communist countries as
emblems of capitalism's greed and instability. Now, ten years after the Berlin Wall came down, it is
hard to find a country without its own bourse. In Poland, the Warsaw Stock Exchange even
occupies the former headquarters of the Communist Party. Despite China's commitment to state
control of its economy, it has two stock exchanges, even without counting a third that it inherited
from Hong Kong. The number of developing countries with stockmarkets has doubled during the
1990s . Why is everyone betting on the markets?
Part of the answer is that capital markets have proved remarkably efficient at bringing
savers and borrowers together. Capital is just another word for stored wealth and resources, which
can take many forms. And markets, as basic economics shows, are the least bad way to set prices
and to allocate scarce resources.
The key difference between capital markets and financial intermediaries, such as banks or
life insurers, is that capital markets cut out middlemen. Where banks and institutions stand between
savers and investors, directing the flow of resources, capital markets bring the two parties face to
face.
The two main types of capital markets are equity markets, for trading company shares (or
equities), and bond markets, for trading the debt of companies and governments. Both perform two
crucial functions in the economy. They move resources across space and time, from where they are
in surplus to where they are needed most. And they produce valuable information, through the
prices they set, that firms, households, and governments use to manage resources better.
Today's financial markets have come a long way from their humble origins. Securities that
looked much like modern shares were issued as early as the late Middle Ages in Italian city states.
Government bonds with publicly quoted prices date at least as far back as long-term Venetian loans
called prestiti, in the 13th century. The New York Stock Exchange started under a buttonwood tree
in 1792 with just two equities and three government bonds. By 1998, the NYSE'S average daily
turnover—the value of traded shares—had reached $29 billion. In many rich countries, stockmarket
capitalisation, the market value of all listed companies, now rivals or exceeds the size of the
domestic economy .
174
Modern capital markets can be real or virtual. Traditional financial exchanges had a trading
floor on which members would gather to buy and sell securities. Floor traders have become icons of
modern finance. Yet today the NYSE is one of the few examples left of an exchange with a floor. In-
creasingly, exchanges' only address is in cyberspace, with traders linked by a computer network.
The most successful example of such screen-based exchanges is America's Nasdaq. The Tokyo
Stock Exchange recently replaced its trading floor with a computer.
In the past, stock exchanges were almost always owned mutually by their members, but
now several of the largest plan to issue shares to the public, following the example of Australia's
stock exchange, which is now quoted on its own market. And there are different trading
mechanisms. Dealer exchanges, such as Nasdaq, rely on market-makers to match buy and sell
orders, while auction markets such as the Frankfurt exchange match such trades electronically. The
NYSE is a hybrid of the two. The trading method chosen can affect liquidity, a measure of how fast
securities can be sold and how much such sales affect prices.
Most capital-market trading takes place between one investor and another. This is known
as the secondary market, since it does not directly involve the company or government that issued
the security. New shares and bonds, however, are born in what is called the primary market, where
the money raised flows directly into the coffers of the issuers. The primary market includes initial
public offerings (IPOs) of shares in the stockmarket as well as new debt issues in the bond market.
These shares and bonds are in essence only the receipts that savers get for lending money
to, or investing in, a firm or a government. A bond, for example, is a loan that can be traded
between investors. A government might issue a bond because it spends more than it receives in tax
revenues, and needs to borrow the difference. Bonds are often called fixed-income securities
because they give the investor a regular stream of interest payments, called coupons.
A bond is an agreement to repay an amount of principal at a future date, along with a
schedule of interest payments over a period of time, usually several years. American Treasury
bonds are a well-known example. An investor today who buys a newly issued $10,000 face-value,
зо-year Treasury bond with a 6% coupon will receive 6% interest per year (or $600) until 2029,
when he will also get back his $10,000 principal.
The market price of a bond will vary over time in response to several factors: expected
inflation, interest rates on competing investments and the creditworthiness of the borrower. The less
worried investors are that inflation will erode the value of both interest and principal, the more they
will pay for a bond. Bond prices are thus a good reflection of investors' expectations of future
inflation. When interest rates offered on new investments rise, the fixed payments of older bonds
become less attractive; so investors will bid the prices of these bonds down.
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One way of summarising a bond's value is its yield. This is a measure of the return a
bondholder receives on his investment, stated as a percentage of the bond's market price. As a
bond's price falls, investors can purchase its stream of interest payments for less. Likewise, when
that bond's price rises, investors pay more dearly for its cashflow. This gives rise to one apparent
paradox about bonds: the cheaper they are, the more they "yield".
In contrast to bonds, shares are little slices of ownership in private firms. As owners,
shareholders elect a board of directors and vote on company business. They are also entitled to the
firm's profits— the income that remains after payments for wages, materials, and any interest on the
company's debt. This is one way to see that shares generally carry more risk than bonds:
bondholders have a higher legal claim, or seniority, on the cashflows of a business than do
shareholders. If a firm's business declines, bondholders will be paid first, and shareholders last, if at
all. But if business booms, shareholders will do better.
For share valuation, one commonly cited measure is the price to earnings, or p/e ratio. The
p/e ratio is the market price of shares divided by the firm's profits. P/e ratios are to shares what
yields are to bonds; in fact, the inverse of the p/e ratio measures a firm's profits as a percentage of
the market price of its shares, or earnings yield.
From the savers' perspective, bonds appear safer than shares. From the issuers' perspective,
things look rather different. For a company issuing securities to fund its growth, shares are the least
risky choice. Shareholders, unlike bondholders, receive no legal promise to be repaid in cash at a
certain time. Shareholders can exchange their shares in the stockmarket at the market price, but the
firm promises them no particular return.
For firms, as for people, taking on debt can be risky. If they are unable to meet interest
payments, bankruptcy may ensue. So, in general, the more financially sound a company is, the more
investors will be willing to pay for its debt. But it is costly and time-consuming for individuals to
gather such credit information. Ratings agencies, such as Moody's and Standard & Poor's, reduce
this cost by assessing companies' financial condition and publishing their conclusions. Debtor
companies also face bond covenants restricting their activities to ensure that they can continue to
service their debts.
For years, businessmen believed that having the right mix of debt and equity could make
their company more valuable. But in 1958 Franco Modigliani and Merton Miller, two American
economists, showed that the value of a firm should be unaffected by whether it is financed using all
debt, all equity, or a mix of the two. What really matters is the value of the underlying business, not
the details of its financing. But this theory, for which they were later awarded the Nobel prize in
economics, relies on the crucial assumption that capital markets operate "perfectly": ie, it ignores
such real-world snags as tax, and differing costs of borrowing for firms and individuals.
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VOCABULARY:
auction market – аукционный рынок ценных бумаг: торговля ценными бумагами с
помощью различных методов аукциона (торга)
primary market – первичный рынок: здесь: рынок новых ценных бумаг: рынок
организации займов и получения заемщиком соответствующих сумм, в отличие от
вторичной торговли ценными бумагами
open outcry – свободный биржевой торг, метод заключения сделок голосом и жестом
в торговом зале биржи (без аукционера); биржевик выкрикивает свои цены и
заключает сделку с первым, кто ответит на предложение
177
51. Ipsen IPO marks Paris high point
Ipsen, a Paris pharmaceutical company, yesterday raised €324m in its initial public
offering, marking a record year for flotations in France.
It came as the French stock market hit a fresh 3%-year high and means the funds raised via
IPOs in France this year will be more than twice as high as last year and are likely to surpass the
level of the dotcom boom.
The French CAC-40 closed yesterday at 4,667.20, its highest level since March 2002. The
market has risen more than 22 per cent this year.
“The good news is that the price-earnings [ratio] has not moved a lot,” said Dominique
Sabassier, chief investment officer at Natexis Asset Management. “The level of markets is in line
with increased earnings.”
“The bad news is that, although it is not expensive, it is high.” Mr Sabassier said earnings
could not be expected to perform as well next year.
Prior to Ipsen, which priced its shares last night at €2230, companies listing on the
Euronext-owtted Paris exchange had raised €l2.3bn this year compared with €5.5bn last year and
€12.9bn in 2001.
The biggest of the year by far was EDF, the French electricity group, which last month
raised €7bn in its part-privatisation, making it the biggest IPO in the world for five years. Its former
state-owned sister utility GdF raised €3.5bn in July.
Other new entrants have included Meetic, a dating agency, and Eutelsat, a satellite operator
that endured a bumpy launch.
Mr Sabassier said investor reaction to this year's IPOs was proof of a "greater maturity" in
the market. "People say: 'We want shares, but we don't want them at any price'."
Ipsen's increased capital will give it the "flexibility" to expand in the US, according to
Jean-Luc Belingard, chief executive. The placement involved the sale of 6.9m existing shares
belonging to the family of founder Henri Beaufour and 7.7m new shares that generated €170.9m.
The pricing was towards the lower end of the indicative range of €21.70-€25.20 and values
Ipsen at about €1.8bn. Trading starts today.
Goldman Sachs and BNP Paribas were joint lead managers. ABN Amro, Rothschild,
HSBC and Societe Generale were co-lead managers.
In another sign of confidence among French biotechnology and pharmaceutical companies,
BioAlliance Pharma intends to launch its IPO today.
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52. Swiss Machine Tool Group in IPO
The recovery in the fortunes of the Swiss machine tool industry has been underlined by the
decision of Tornos, one of the world's leading producers of automatic lathes, to float its shares on
the Swiss stock market in an initial public offering that could value the company at more than
SFr400m ($243m).
Tornos is one of the great names of the Swiss machine tool industry. It is one of the world'
biggest makers of high-precision lathes for industries ranging from watch-making to medical
technology and the car industry. Exports account for some 90 per cent of sales.
However, like many old names in the Swiss machine tool industry, it ran into financial
problems in the 1980s because of its high cost base and failure to match high-tech competition from
countries such as Japan.
The slump in demand for machine tools early in the 1990s, linked to the world recession,
compounded Tornos's difficulties.
In March 1995, Anton Menth, the current chief executive, was brought in from outside the
machine tool industry at the behest of the group's bankers, who were owed SFr70m and were under
pressure to write off their debts to prevent the company failing.
Mr Menth cut stocks and concentrated production on one site. In addition, he replaced
many of the group mechanical engineers with software experts and reduced the time taken to
build a machine from nine months to six weeks.
Under Mr Menth, Tornos has nearly trebled its sales and doubled its workforce to more
than 1,000 people. Last year it increased sales by 26 per cent to SFr370m and its operating income
before interest, taxes, depreciation and amortisation rose 23 per cent to SFr41.9m.
Over the past three years Tornos's sales have grown at an average 23.5 per cent a year.
In early 1999 Tornos was sold to Doughty Hanson, the UK venture capitalist, after the
previous owners and their banks had aborted an attempted IPO because of weak market conditions.
The new IPO, which is being led by Credit Suisse First Boston, is primarily to finance future
growth.
Tornos will be the third Swiss company that Doughty Hanson has floated on the Swiss
market.
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VOCABULARY CHECK
1) Способы привлечения капитала путем получения кредита в банке, либо с
помощью эмиссии облигаций, относятся к долговому (заемному) финансированию.
2) Финансирование за счет выпуска акций является более предпочтительным для
компаний, так как нет необходимости выплачивать проценты.
3) Привилегированная акция дает владельцу право на получение дивидендов и на
часть капитала компании (в случае банкротства) по сравнению с обыкновенной акцией, а
также имеет фиксированный размер дивиденда.
4) 18 апреля 2002 г. в результате первоначального публичного предложения на
биржах РТС и ММВБ было размещено 16 млн. обыкновенных акций РБК.
5) В 1996 году на рынке начинаются операции с акциями Yahoo. Организаторы
выставили акции по цене 13 долл. за штуку, торги начались с цены 24,50 долл., а к концу
первого дня торгов цена акции достигла уже 33 долл. Если бы в момент первоначального
публичного предложения акций вы купили 100 акций, затратив на них 2450 долл., сегодня
ваши вложения составляли бы 22 тыс. 800 долл.
6) «Голубая фишка» - первоклассная компания известная своей надежностью,
качеством товаров и услуг, стабильной прибылью, а также выплачивающая дивиденды.
7) Выпуск новых акций, предлагаемый акционерам компании по более низкой
цене, чем рыночная называется эмиссия прав.
180
The NYSE is the type of exchange, where
much of the trading is done face-to-face on a trading floor.
This is also referred to as a listed exchange. Orders come in
through brokerage firms that are members of the exchange
and flow down to floor brokers who go to a specific spot on
the floor where the stock trades. At this location, known as
the trading post, there is a specific person known as the
specialist whose job is to match buyers and sellers. Prices
are determined using an auction method: the current price is
the highest amount any buyer is willing to pay and the
lowest price at which someone is willing to sell. Once a
trade has been made, the details are sent back to the
brokerage firm, who then notifies the investor who placed
The trading floor of the
the order.
NYSE
The second type of exchange is the virtual sort
called an over-the-counter (OTC) market, of which the Nasdaq is the most popular. These markets
have no central location or floor brokers whatsoever. Trading is done through a computer and
telecommunications network of dealers. It used to be that the largest companies were listed only on
the NYSE while all other "second tier" stocks traded on the other exchanges. The tech boom of the
late 90s changed all this; now the Nasdaq is home to several big technology companies such as
Microsoft, Cisco, Intel, Dell, and Oracle. This has resulted in the Nasdaq becoming a serious
competitor to the NYSE.
On the Nasdaq brokerages act as market makers for various
stocks. Market makers are wholesalers of shares who keep supplies of
the shares in which they deal, making a continuous market for buyers
and sellers.
The London Stock Exchange (LSE) is the principal market for
trading of equities, other corporate securities and government debt in the
UK. It has the third largest turnover in the world, after Tokyo and New
York.
Financial centres bring together investors and the businesses The Nasdaq
that need their investment. A speculator is an investor who wants to market site in Times
make a quick profit, rather than invest over a longer period of time. Square
Brokers, dealers and traders buy and sell for investors, and in some cases, for themselves
or the organizations they work for.
181
Things traded in financial centres include : securities : shares and bonds; commodities
such as metals and farm products; currencies: buying and selling the money of particular countries
on the foreign exchange or forex markets.
Securities houses are large financial institutions offering a number of investment services.
People and institutions involved in a financial market are, informally, market players.
Shares change hands when they are traded. When there is a lot of trading in a market,
turnover is high. Trading is most often described as moderate or active.
Trading on the stock exchange and on other markets can also be: dull, lacklustre, light,
negligible, quiet, slow, sluggish, thin, or weak when activity is low;
bumpy, choppy, erratic, hesitant, mixed, uncertain, or volatile when the overall direction
of prices is not clear;
brisk, heavy, or hectic when there is a high volume of trading, in other words high
turnover of shares;
frantic, frenetic, or frenzied when there is a very high volume of trading .
When market prices are rising people talk about a bull market. Bull markets cannot last
forever though, and sometimes they can lead to dangerous situations if stocks become overvalued.
If a person is optimistic, believing that stocks will go up, he or she is called a bull and said to have a
bullish outlook.
A bear market is when the economy is bad, recession is looming, and stock prices are
falling. Bear markets make it tough for investors to pick profitable stocks. If a person is pessimistic,
believing that stocks are going to drop, he or she is called a bear and said to have a bearish outlook.
If prices rise after a period when they have been falling, they rally, rebound, recover, regain
ground, or regain lost ground in a rally or recovery.
If prices fall to below the level they were before rising, earlier gains are wiped out.
VOCABULARY
stock market - фондовая биржа; фондовый рынок; биржа ценных бумаг
stock exchange
bourse - французское название фондовой биржи.
Произошло от фр. bourse /кошелек, богатство/. Название the
Bourse обычно относится к Парижской бирже, однако и другие
континентальные рынки ценных бумаг известны под этим
названием
financial centre - финансовый центр ( город, в котором сосредоточено большое
число финансово-кредитных институтов, совершается
значительный объем финансовых операций )
Wall Street - Уолл-стрит: 1) улица на юге о. Манхеттен, где расположена
Syn: the Street Нью-Йорская фондовая биржа, Американская фондовая биржа и
182
другие финансовые организации
2) В переносном смысле - Нью-Йорская фондовая биржа
3) В переносном смысле - финансовые круги страны, фондовый
рынок США
City - Сити – 1) исторический центр Лондона; один из крупнейших
the City of London финансовых и коммерческих центров капиталистического мира; в
нём находятся Английский банк (Bank of England), Лондонская
фондовая биржа, многочисленные конторы акционерных
обществ;
2) английский финансовый капитал, финансовая олигархия
Square Mile - “Квадратная миля” : разговорное название лондонского Сити,
традиционно занимающего площадь в 1кв.милю
New York Stock Exchange - Нью-Йоркская фондовая биржа: главная биржа США,
(NYSE) крупнейшая в мире. Совершает операции с акциями и ценными
бумагами более чем 1000 наименований.
Buttonwood Tree - "Соглашение платанового дерева": заключено 24 брокерами о
Agreement создании первой организованной фондовой биржи в г. Нью-
Йорке; подписано 17 мая 1792 под платаном на месте нынешней
Уолл-стрит
Big Board - "Большое табло": прозвище Нью-Йоркской фондовой биржи.
Связано не только с большими размерами электронного табло
биржи, но и с тем, что на ней представлены акции "большого
бизнеса" (Big Business) – крупнейших компаний США
trading - торговля на бирже
trading floor - биржевой (торговый, операционный) зал: место на фондовой
бирже, где осуществляется покупка и продажа ценных бумаг
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turnover - oборот: объем сделок на бирже за какой-л. Период
investor - инвестор
speculator - спекулянт, биржевой делец (игрок): лицо, пытающееся
предугадать колебание цен и стремящееся получить прибыль
путем покупки и перепродажи ценных бумаг
broker - брокер, посредник, агент, маклер: посредник между продавцами
и покупателями в операциях с валютой, ценными бумагами,
товарами, недвижимостью в страховании и при заключении
различных сделок, за выполнение которых ответственности не
несет, может заключать сделку от своего имени, но за счет
клиента
dealer - дилер: юридическое лицо, осуществляющее биржевое
посредничество за свой счет и от своего имени
trader - биржевой маклер; трейдер: любое юридическое или физическое
лицо, обладающее правом заключать сделки на бирже
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котором наблюдается устойчивая тенденция к понижению цен в
течение длительного периода времени
bearish - пессимистичный; понижательный, снижающийся (о рынке, как
правило спекулятивном, на котором наблюдается снижение цен)
rally - восстанавливать/ся/; оживлять/ся/; достичь прежнего уровня
rebound
recover
regain ground
regain lost ground
rally - восстановление (o темпах экономического развития после
recovery спада); повышение курсов (значительное повышение курсов
ценных бумаг или товарных цен после их снижения)
earlier gains are wiped out - ранние достижения сведены на нет
COMPREHENSION QUESTIONS:
1) What do Wall Street and the City stand for?
2) What is the Buttonwood Tree Agreement?
3) How is trading on the NYSE done?
4) What is an over-the-counter market?
5) What role do market makers play?
6) What is a speculator interested in?
7) What products are traded in financial centres?
8) What words are used to describe low trading activity? high turnover of shares?
9) Whom do we call a bull? a bear?
10) What happens to prices in a rally?
VOCABULARY PRACTICE
Trading has been heavy on the New York Stock Exchange, with very high turnover of one
and half billion shares changing hands. We’ve seen spectacular gains, especially among blue chips.
The bull market seems set to continue, after yesterday’s record high at the close. Dealers
seem bullish and expect the Dow to go through the 15000 barrier soon.
The bear market continues, with prices set to fall further in the next few days. Dealers are
bearish, with many saying there is no sign of a rally. If prices continue to fall, there may be another
stock market collapse or crash, like the ones in 1929 and 1987.
The NYSE uses floor traders (people) to make trades, whereas the Nasdaq and many other
exchanges are computer driven.
To be listed on the NYSE, a company must earn $2.5 million before taxes, have more than
one million shares of stock outstanding, give common stockholders voting rights, and publish
periodic financial statements.
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Market makers accept the risk of holding a certain number of shares of a particular
security in order to facilitate trading in that security. Each market maker competes for customer
order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order
is received, the market maker immediately sells from its own inventory or seeks an offsetting order.
This process takes place in mere seconds
In general, the reason for which a stock is traded over-the-counter is usually because the
company is small, making it unable to meet exchange listing requirements. Also known as "unlisted
stock", these securities are traded by broker-dealers who negotiate directly with one another over
computer networks and by phone.
TEXTS TO TRANSLATE:
53. Siemens Seeks US Expansion as ADRs Launch
Siemens, the German electronics and engineering group, yesterday established a platform
for further expansion in the US, listing its shares on the New York Stock Exchange and promising a
54 per cent increase in US revenues within two years.
Siemens' American Depositary Receipts were launched into a rough market, which saw the
Standard & Poor's 500 index drop into bear-market territory - down 20 per cent from its peak - in
morning trading, and the Nasdaq Composite Index slip below 2,000.
"A day when stock prices are exploding is nicer, but if you make such a strategic move it
isn't so important ... what really counts is the medium- and long-term effect," said Heinrich von
Pierer, the group's president and chief executive.
At lunchtime in New York, the ADRs were trading at $111.95, compared with an opening
price of $112.25, after a warning from Ericsson, the Swedish mobiles phones manufacturer, hit
Siemens shares in Europe.
Mr von Pierer said that even without further acquisitions, he expected the group's US
operations to generate $25bn in revenues in two years, compared with $16.2bn in the 12 months to
September 30 2000.
Siemens, which has spent $8bn on US companies since 1998, had no particular acquisition
targets in mind, he added, but would concentrate on integrating its recent purchases.
Acquisitions have cut into profitability of the US businesses, which only broke even in the
last fiscal year.
The company has now identified about a quarter of its 100 or so businesses that need to
improve their performance or risk being sold off or closed.
The NYSE listing coincides with a $25m advertising campaign to raise Siemens' profile in
the US, where the group already employs nearly 80,000 people across the range of its businesses,
from power systems to lighting.
186
VOCABULARY:
ADR - American depositary receipt - американская депозитная расписка (АДР):
документ, с помощью которого вводятся в обращение на американский рынок ценные
бумаги иностранных государств; cвободно-обращающаяся расписка на иностранные
акции, депонированные в банке США
187
have neither global alliance partners nor foreign investment prospects, are made more attractive for
sale, they will be left on the shelf to wither. Those who miss the global alliance partnership train
face a future of shrinking back into nothing more than regional carriers simply because they won’t
be able to compete with the likes of Oneworld or the Star Alliance – a prospect which may well
await carriers in other parts of the world, including Europe.
The good news for at least some of Asia’s airlines, private or state-owned, is that despite
their chronic problems there are a number of major international carriers going in search of bargain
buys in the region. Some are armed with a war chest of money, the purchasing power of which has
been significantly enhanced by the weakness of Asian currencies.
Witness the number of carriers beating a path to Bangkok at the prospect of a sell-off of
Thai Airways International stock. Waiting in the wings are those with global ambitions such as
British Airways and Lufthansa. Singapore International Airlines is also a contender, although its
aspirations in this instance are regional rather than global.
The experience of Philippine Airlines holds a lesson for Asia. Having finally broken the
unions, the carrier is a much more attractive proposition to foreign buyers and it certainly is in need
of a fresh injection of capital. PAL was privatised some five years ago, and its roller coaster
performance since then and epic soap opera industrial disputes are a clear warning to investors of
the risks they take in investing in airlines.
Sadly, for Asia, sitting out the financial market turmoil until stability returns is just not an
option, unlike for the majority of European state-owned airlines which have largely already put
their houses in order.
VOCABULARY:
writing on the wall – из библейской легенды о письменах на стене (о словах,
написанных на стене во время пира во дворце Валтасара ); в современном языке
может означать зловещее предзнаменование, предостережение о гибели
VOCABULARY CHECK
1) Нью-Йоркская фондовая биржа специализируется на торговле ценными
бумагами крупных хорошо известных компаний, поэтому получение листинга (допуска) на
этой бирже рассматривается как привилегия.
2) Другие фондовые биржи, например электронная система
«Автоматизированные котировки Национальной ассоциации дилеров по ценным бумагам»
188
(НАСДАК) и Американская фондовая биржа, специализируются на ценных бумагах новых,
менее известных компаний, хотя некоторые крупные высокотехнологичные фирмы,
подобные гиганту «Майкрософт», предпочитают котироваться в системе НАСДАК.
3) Брокер операционного зала находится непосредственно в операционном зале
биржи для размещения приказов на покупку и продажу ценных бумаг.
4) Торговый пост - рабочее место специалиста. Каждый торговый пост отвечает
за 100 акций. В конечном итоге покупки и продажи происходят вокруг торгового поста.
5) Ситуация на рынке ценных бумаг, когда цены акций постепенно снижаются,
называется медвежий рынок.
6) Ситуация на рынке ценных бумаг, когда цены акций постепенно повышаются,
носит название бычий рынок.
7) Маркет-мейкеры действуют на внебиржевом рынке как непосредственные
участники сделок. В отличие от биржевого рынка, где этим занимаются т. н. «специалисты»,
маркет-мейкеры поддерживают ликвидность внебиржевого рынка.
8) В настоящее время на Московской межбанковской валютной бирже (ММВБ)
(Moscow Interbank Currency Exchange) функционируют несколько ключевых рынков:
валютный – с 1992 г., рынок государственных облигаций — с 1993 г., рынок производных
финансовых инструментов — с 1996 г., рынок акций — с 1997 г., рынок корпоративных
и региональных облигаций — с 1999 г., денежный рынок – с 2004 года.
189
Although the EPS figure in the P/E is usually based on earnings from the last four quarters,
the P/E is more than a measure of a company's past performance. It also takes into account market
expectations for the growth of a company. Stock prices reflect what investors think a company will
be worth. Future growth is already accounted for in the stock price. As a result, a better way of
interpreting the P/E ratio is as a reflection of the market's optimism concerning a company's growth
prospects.
If a company has a P/E higher than the market or industry average, this means the market
is expecting big things over the next few months or years. A company with a high P/E ratio will
eventually have to live up to the high rating by substantially increasing its earnings, or the stock
price will need to drop.
The financial sections of newspapers around the world carry results of each day’s trading.
In the US, on each business day the Wall Street Journal contains price quotations. Prices are
traditionally calibrated in eighths of a dollar, so: 1/8=$.125; 1/4=$.25; 3/8=$.375; 1/2=$.50;
5/8=$.625; 3/4=$.75; 7/8=$.875.
Changes in quotations can be expressed in per cent and in basis points.
Any financial paper has stock quotes that will look something like the image below:
Columns 1 & 2: 52-Week Hi and Low - These are the highest and lowest prices at which a stock has
traded over the previous 52 weeks (one year). This typically does not include the previous day's
trading.
Column 3: Company Name & Type of Stock - This column lists the name of the company. If there
are no special symbols or letters following the name, it is common stock. Different symbols imply
different classes of shares. For example, "pf" means the shares are preferred stock.
Column 4: Ticker Symbol - This is the unique alphabetic name which identifies the stock. If you
watch financial TV, you have seen the ticker tape move across the screen, quoting the latest prices
alongside this symbol.
Column 5: Dividend Per Share - This indicates the annual dividend payment per share. If this space
190
is blank, the company does not currently pay out dividends.
Column 6: Dividend Yield - This states the percentage return on the dividend, calculated as annual
dividends per share divided by price per share.
Column 7: Price/Earnings Ratio - This is calculated by dividing the current stock price by earnings
per share from the last four quarters.
Column 8: Trading Volume - This figure shows the total number of shares traded for the
day, listed in hundreds. To get the actual number traded, add "00" to the end of the number listed.
Column 9 & 10: Day High & Low - This indicates the price range at which the stock has traded at
throughout the day. In other words, these are the maximum and the minimum prices that people
have paid for the stock.
Column 11: Close - The close is the last trading price recorded when the market closed on the day.
Column 12: Net Change - This is the dollar value change in the stock price from the previous day's
closing price. When you hear about a stock being "up for the day," it means the net change was
positive
Along with stock price quotations there are other indications that help to summarize stock
market performance, to understand the motion of prices.
There are two types of stock price indications – averages and indices. The averages are
based on small samples of key stocks and comprise the industrial average, transportation average,
utilities average and the composite average. The indices draw on a large representative sample of
stocks and comprise a set of sectoral, industry and subindustry indices together with a composite
equity market index.
There are hundreds of stock market indices in use around the world. They differ primarily
by the mode of weighting. The bulk of these are weighted by the capitalization of the company’s
common stock.
In the US the most frequently quoted stock market index is the Dow Jones Industrial
Average (DJIA), which is based on the stock prices of thirty large, well-established industrial
corporations. Another frequently quoted stock market index in the US is the Standard and Poor’s
500 Stock Price Index (S&P500). It is significantly broader than the DJIA. Many stock market
watchers prefer broader averages, in particular, the New York Stock Exchange composite average,
which covers all stocks traded on that exchange.
191
In the UK, investors watch the FT-SE 100 Share Index, popularly known as ‘Footsie’. It
is an index of 100 leading UK shares listed on the International Stock Exchange and provides a
minute by minute picture of how share prices are moving.
FT index refers to the Financial Times Industrial Ordinary Share Index, also known as
the ‘30 Share Index’. It is based on the prices of 30 leading industrial and commercial shares.
The Institute of Actuaries in London had compiled a broadly-based Actuaries Investment
Index each month since 1929. But the advent of computerization paved the way for the daily
computation of a greatly expanded index, known as the FT-Actuaries All-Share (FT-A) Index,
from 1962.
The RTS Index is based on 50 most liquid and capitalized stocks picked by the RTS
Information Committee experts. The constituent list is being reviewed every three months.
The RTS Index serves as the underlying value for the futures contracts in FORTS (Futures
and Options on RTS). The RTS-2 Index is calculated based on Second-tier stocks.
VOCABULARY
announce results - объявлять, отчитываться, сообщать о результатах (итогах)
report results деятельности компании
unveil results
earnings - прибыль, чистый доход (по отношению к предприятию)
(выручка минус затраты)
company earnings - прибыль компании
earnings per share (EPS) -(чистая) прибыль на акцию (обычно за вычетом дивидендов по
привилегированным акциям)
distribute - распределять
distribution of dividends - выплата дивидендов
distribution of earnings - распределение доходов
dividend - дивиденд: часть прибыли компании, которая распределяется
среди акционеров
yield - доход, выручка, прибыль; доходность: выраженное в
процентах отношение дохода по ценным бумагам, инвестициям
и т. п. к номинальной или рыночной стоимости данных ценных
бумаг или инвестиций
price/earnings ratio - отношение цены к (чистой) прибыли, коэффициент
P/E ratio [отношение] "цена/(чистая) прибыль": отношение рыночной
price/earnings multiple цены акции компании к чистой прибыли последней в расчете на
одну акцию за определенный период
performance - результативность; эффективность деятельности; показатели
деятельности
basis point - базисный пункт: одна сотая часть единицы при котировке цен,
ставок, доходности (100 пунктов = 1%); (напр., разница между
11,73 и 11,69 равна четырем базисным пунктам)
average - фондовый индекс, рассчитываемый исходя из
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market average средневзвешенного курса определенной корзины ценных бумаг;
market index используется для анализа состояния и тенденций развития
(pl indexes or indices) рынка
composite index - сводный индекс
weighting - взвешивание: статистическая процедура, с помощью которой
рассчитывается рыночный индекс, напр., в фондовом индексе
веса акций определяются размером капитализации
Dow Jones Index - индекс Доу-Джонса: фондовый индекс, рассчитываемый по
котировкам акций на Нью-Йоркской фондовой бирже для акций
30 промышленных ( Dow Jones Industrial Average) и 20
транспортных компаний (Dow Jones Transportation Average), а
также для 15 компаний коммунального обслуживания (Dow
Jones Utility Average). Составляется также комбинированный
индекс ( Dow Jones Combined Average) для 65 акций
Dow Jones Industrial - индекс промышленных акций Доу-Джонса: экономический
Average (DJIA) показатель, характеризующий кредитно-финансовую ситуацию
в мире, включает котировки акций 30 ведущих промышленных
корпораций (базовый год - 1928)
Standard and Poor’s 500 - индекс "Стандард энд Пурз 500": взвешенный по рыночной
Stock Index (S&P500), стоимости индекс акций 500 корпораций (400 промышленных
Standard and Poor's корпораций, 20 транспортных, 40 финансовых и 40
Composite 500 Index , коммунальных компаний), зарегистрированных на Нью-
Standard and Poor's 500 Йоркской фондовой бирже
Standard and Poor's - агентство "Стандард энд Пурз": крупнейшее рейтинговое
агентство, поставляющее на мировые рынки аналитические
услуги и информацию, составляющее различные индексы,
основной из которых - индекс "Стандард энд Пурз - 500"
New York Stock Exchange - сводный индекс Нью-Йоркской фондовой биржи: взвешенный
composite average по рыночной стоимости показатель движения курсов акций всех
корпораций, зарегистрировавших свои бумаги на Нью-
Йоркской фондовой бирже
FTSE 100 Share Index - биржевой индекс "Файненшл Таймс"100, Футси:
FOOTSIE публикуемый газетой "Файненшл Таймс" индекс Лондонской
фондовой биржи, основанный на курсах 100 ведущих акций;
Financial Times Industrial - индекс промышленных обычных акций "Файненшл Таймс";
Ordinary Share Index представляет движение промышленных акций на основе
информации о динамике котировок акций 30 рыночных лидеров
FT-Actuaries All-Share - актуарный индекс всех акций "Файненшл таймс" -
(FT-A) Index публикуемый газетой "Файненшл таймс", Институтом
актуариев (Англия) и Факультетом актуариев (Шотландия)
фондовый индекс всех акций; самый широкий индекс в
Великобритании, охватывающий около 750 акций (90%
капитализации рынка); рассчитывается с 1962 г.
Russian Trading System - Российская торговая система (РТС) – крупнейшая электронная
(RTS) торговая площадка российского корпоративного рынка ценных
бумаг, созданная по аналогии с НАСДАК
COMPREHENSION QUESTIONS:
1) What does a company’s share price depend on?
2) What is a dividend?
193
3) What is a share’s yield?
4) How do you calculate the P/E?
5) Why do investors take into consideration the P/E ratio?
6) What are the averages based on?
7) What do they comprise?
8) What do the indices comprise?
9) How are the bulk of market indices weighted?
10) What are the most frequently quoted stock market indices in the US and the UK?
11) What is the RTS Index based on?
VOCABULARY PRACTICE
Several years ago, when Microsoft was growing by leaps and bounds, its P/E ratio was
over 100. Today, Microsoft is one of the largest companies in the world, so its revenues and
earnings can't maintain the same growth as before. The result is a current P/E ratio of 43 (in 2002).
Cray Research Inc reported surprisingly weak results for the second quarter and indicated
it expects significantly lower earnings for the year.
On Wall Street, the Dow Jones industrial average recovered from an early loss by
lunchtime. After all the downward revisions made in recent weeks, the third-quarter season for the
US corporate sector has actually turned out better than the diminished expectations.
Wednesday of this week saw the FTSE 100 move sharply lower on news from the oil sector.
The major market index saw the biggest daily range since 21 July of this year, closing
Wednesday's trading session down 66 points.
Investors can use yield to measure the performance of their investments and compare it to
the yield on other investments or securities. Higher risk securities generally offer higher expected
yields as compensation for the additional risk incurred through ownership of the security
TEXTS TO TRANSLATE:
54. Russian Stocks Climb to Record
Russia's benchmark stock index has risen to a record, driven by record oil prices and
optimism about earnings.
Moscow's RTS had slumped as the Kremlin tussled with and eventually broke up one of its
biggest members, oil and gas firm Yukos.
Investors big and small lost money, Russia's reputation was dented and share prices
suffered as a result.
But the drop made stock valuations look more attractive, and the potential for profits now
seems to outweigh concerns.
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The RTS index climbed as high as 789.48 points - an all-time record - before falling back
to trade at 788.36, 0.8% higher than Monday's close.
That takes the RTS's gains to more than 28% this year.
'Peak of Mount Everest'
Most of Russia's biggest companies get their wealth from the nation's natural resources and
a surge in global demand has been driving earnings growth.
At the same time, the extra revenues have been helping boost Russia's budget and the
government is making strides in its attempts to increase tax collection. The subsequent
improvement in Russia's economy is filtering down into the corporate sector, and helping boost
consumer and business spending and investor confidence.
Also fuelling positive sentiment have been a number of large and well-received stock
offerings.
However, analysts are warning that the gains have come quickly and are unlikely to last
very much longer without some more positive economic or corporate news to underpin the market.
"The strength of the bulls is clearly fading, even if they manage to plant their flag on the
peak of Mount Everest," said Sergei Suverov, a dealer at Gazprombank.
"The local buyers who are behind this latest rally are preparing to sell," said Roland Nash,
an analyst at Renaissance Capital.
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Earlier Tuesday, a set of retail-sector economic indicators showed a slowing in activity that
is generally friendly for bonds, but the market showed little reaction.
The Bank of Tokyo-Mitsubishi's Retail Chain Store Sales Index fell 0.2% in the week
ended Oct. 21 from the previous week. It was the first time in four weeks that sales at U.S. retailers
had declined on a week-to-week basis.
Store sales generally were below expectations for the majority of American retailers,
"which caused many retailers to scale back their monthly expectations as well," said Michael
Niemira, economist at Bank of Tokyo-Mitsubishi Ltd. in New York.
Redbook Research's latest indicator of national retail sales showed sales up 0.4% in the
first three weeks of October compared with the same period in September. But the report said that
sales had softened from a higher pace earlier in the month.
VOCABULARY:
treasuries - казначейские ценные бумаги (векселя [treasury bills] и облигации
[treasury bonds])
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That was at the top end of the tentative price range of Y102.000 to Y112.000 set last
month.
The IPO price values Pacific Golf at 43 times expected earnings – against 17.3 for golf-
related products distributor Maruman Co.
Japan's golf market was hit hard after the country's economy burst in the early 1990s.
Nearly 600 Japanese golf courses went under between 1991 and March this year, according
to golf magazine publisher Ikki Publishing.
VOCABULARY:
at 43 times expected earnings – price/earnings ratio = 43
VOCABULARY CHECK
1) Акции с высоким уровнем отношения цены к доходу (выше 20) обычно
принадлежат молодым быстрорастущим компаниям, не имеют больших дивидендов и несут
большой риск.
2) Cводный индекс Нью-Йоркской фондовой биржи - взвешенный показатель
движения курсов акций компаний, зарегистрировавших свои бумаги на Нью-Йоркской
фондовой бирже.
3) Дивиденд - это часть прибыли компании, распределяемая среди акционеров.
4) Наиболее известный индекс промышленных акций Доу-Джонса включает
акции 30 ведущих промышленных компаний.
5) Актуарный индекс всех акций "Файненшл таймс" - самый широкий индекс в
Великобритании, охватывающий около 750 акций.
SECTION 4 DERIVATIVES
LEAD-IN
Derivative is a financial contract whose value is derived from the performance of assets,
interest rates, currency exchange rates, or indexes. Derivative transactions include a wide
assortment of financial contracts including swaps, futures, options, forwards and various
combinations thereof.
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One use of derivative securities is as a tool to transfer risk. For example, farmers can sell
futures contracts on a crop to a speculator before the harvest. The farmer offloads (or hedges) the
risk that the price will rise or fall, and the speculator accepts the risk with the possibility of a large
reward. The farmer knows for certain the revenue he will get for the crop; the speculator will make
a profit if the price rises, but also risks making a loss if the price falls.
A forward contract is an agreement between two parties to buy or sell an asset (which can
be of any kind) at a pre-agreed future point in time. Therefore, the trade date and delivery date are
separated. The forward price will usually give a good market estimation of the price in the future.
A futures contract is a form of forward contract that has been standardised for a wide
range of uses. It is traded on a futures exchange. Futures may also differ from forwards in terms of
margin and delivery requirements.
A futures contract is an order that you place in advance to buy or sell an asset or
commodity. The price is fixed when you place the order, but you don’t pay for the asset until the
delivery date. Futures markets have existed for a long time in commodities such as wheat,
soybeans and copper. The major development of the 1970s occurred when the futures exchanges
began to trade contracts on financial assets such as bonds, currencies and stock market indexes.
Participating in the futures market does not necessarily mean that you will be responsible
for receiving or delivering large inventories of physical commodities—buyers and sellers in the
futures market primarily enter into futures contracts to hedge risk or speculate rather than exchange
physical goods (which is the primary activity of the cash/spot market). That is why futures are used
as financial instruments by not only producers and consumers but also speculators.
A futures contract is an agreement between two parties: a short position, the party who
agrees to deliver a commodity, and a long position, the party who agrees to receive a commodity.
In every futures contract, everything is specified: the quantity and quality of the commodity, the
specific price per unit, and the date and method of delivery. The “price” of a futures contract is
represented by the agreed-upon price of the underlying commodity or financial instrument that will
be delivered in the future.
When you open a futures contract, the futures exchange will state a minimum amount of
money that you must deposit into your account. This original deposit of money is called the initial
margin. When your contract is liquidated, you will be refunded the initial margin plus or minus any
gains or losses that occur over the span of the futures contract.
The initial margin is the minimum amount required to enter into a new futures contract. If
your margin account drops to a certain level because of a series of daily losses, brokers are required
to make a margin call and request that you make an additional deposit into your account to bring
the margin back up to the initial amount.
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An option is a contract giving the buyer the right, but not the obligation, to buy or sell an
underlying asset at a specific price on or before a certain date. An option, just like a stock or bond,
is a security. It is also a binding contract with strictly defined terms and properties.
The two types of options are calls and puts:
A call gives the holder the right to buy an asset at a certain price within a specific period of
time. Calls are similar to having a long position on a stock. Buyers of calls hope that the stock will
increase substantially before the option expires.
A put gives the holder the right to sell an asset at a certain price within a specific period of
time. Puts are very similar to having a short position on a stock. Buyers of puts hope that the price
of the stock will fall before the option expires.
A swap is essentially an agreement in which counterparties (generally two) agree to
exchange future cash flows arising from financial instruments. For instance, a borrower agrees to
exchange fixed interest payments on a loan with another borrower’s variable interest payments,
each borrower thus making the type of payments that suits them better.
VOCABULARY
derivative - производная ценная бумага, производный (финансовый)
инструмент, дериватив: финансовый инструмент, стоимость
которого зависит от цены базового актива, валюты или другого
финансового инструмента
forward contract - форвардный контракт, форвард: соглашение о купле-продаже
товара, иностранной валюты или финансового инструмента, по
которому поставка осуществляется на определенную будущую дату
по оговоренной в контракте цене; (в отличие от фьючерса
торгуется вне биржи, может иметь нестандартные условия,
обычно предполагает физическую поставку товара, а не закрытие
позиции компенсирующей сделкой )
futures contract - фьючерсный контракт, фьючерс: соглашение о будущей купле-
продаже определенного количества ценных бумаг или товара по
заранее согласованной цене; (в отличие от форвардного
контракта торгуется на бирже, имеет стандартизированные
условия и обычно не предполагает физической поставки товара )
futures market - фьючерсная биржа, фьючерсный рынок: современная форма
futures exchange товарной биржи, торговля на которой ведется фьючерсными
контрактами - контрактами на поставку различных товаров в
будущем; торговлю на фьючерсной бирже по сравнению с биржей
реального товара отличает преимущественно фиктивный
характер сделок (лишь 1-2% сделок завершаются поставкой
товара, а остальные - выплатой разницы в ценах)
hedge - (сущ.) хедж: срочный контракт, который служит для страховки от
рисков неблагоприятного изменения цен
- (гл.) хеджировать, страховать себя от возможных потерь
hedger - хеджер: физическое или юридическое лицо, использующее
срочные и опционные операции для минимизации ценового риска
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(хеджирования)
cash market - наличный рынок, рынок спот, рынок наличного товара: рынок
spot market немедленной поставки и платежа (в противоположность срочному
рынку)
short position - короткая позиция: обязательство, образовавшееся в результате
срочных сделок по продаже ценных бумаг, товаров, валюты,
которых у продавца нет в наличии, при ожидании снижения цен
для проведения обратной операции
long position - длинная позиция: срочная торговая позиция, когда количество
купленных опционных и фьючерсных контрактов превышает
количество проданных, поскольку брокер надеется на повышение
цен и ожидает получить больший доход от их продажи в будущем
initial margin - первоначальная маржа: гарантийный депозит (маржа), вносимый
по срочному биржевому контракту в клиринговую палату
margin call - требование дополнительного обеспечения, требование
поддержания маржи: требование брокера клиенту о внесении
денежных средств или ценных бумаг в качестве дополнительного
обеспечения, вызванное неблагоприятным изменением цен, (напр.,
в связи с падением курса заложенных ценных бумаг)
option - опцион: разновидность срочной сделки, которую необязательно
исполнять; обусловленное уплатой премии право купить или
продать ценные бумаги (товар) по установленному курсу и в
определенное время (до определенного момента времени)
call option - опцион покупателя ["колл", на покупку]: право купить
определенный финансовый инструмент или товар по оговоренной
цене до истечения оговоренного срока, предоставленное продавцом
опциона в обмен на полученную при продаже опциона премию
put option - опцион продавца, опцион "пут": контракт, дающий покупателю
право (но не обязанность) продать соответствующий финансовый
инструмент по оговоренной цене в течение определенного времени
в обмен на уплату премии
swap - своп, обмен: торгово-финансовая обменная операция, в которой
заключение сделки о купле (продаже) ценных бумаг, валюты
сопровождается заключением контрсделки, сделки об обратной
продаже (купле) того же товара через определенный срок на тех же
или иных условиях.
COMPREHENSION QUESTIONS:
1) What is a derivative? What do derivative transactions include?
2) What aim do the speculators pursue?
3) What do the hedgers want?
4) What is the difference between a futures and a forward contract?
5) Do buyers and sellers in the futures market exchange physical goods?
6) What is the initial margin?
7) When are brokers required to make a margin call?
8) What is an option?
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9) Which of the options, a call, or a put, gives its holder the right to sell an asset within
a specific period of time?
10) When are currency swaps used?
VOCABULARY PRACTICE
Speculative trading in derivatives gained a great deal of notoriety in 1995 when Nick
Leeson, a trader at Barings Bank, made poor and unauthorized investments in index futures.
Through a combination of poor judgment on his part, lack of oversight by management, a naive
regulatory environment and unfortunate outside events, Leeson incurred a 1.3 billion dollar loss
that bankrupted the centuries old financial institution.
One should keep in mind that one purpose of derivatives is as a form of insurance, to move
risk from someone who cannot afford a major loss to someone who could absorb the loss, or is able
to hedge against the risk by buying some other derivative.
Futures are explicitly designed to allow the transfer of risk from those who want less risk
to those who are willing to take on some risk in exchange for compensation.
A hedger buys or sells in the futures market to secure the future price of a commodity
intended to be sold at a later date in the cash market. This helps protect against price risks.
Other market participants, however, do not aim to minimize risk but rather to benefit from
the inherently risky nature of the futures market. These are the speculators, and they aim to profit
from the very price change that hedgers are protecting themselves against. Hedgers want to
minimize their risk no matter what they're investing in, while speculators want to increase their risk
and therefore maximize their profits.
Suppose a U.S.-based company needs to acquire Swiss francs and a Swiss-based company
needs to acquire U.S. dollars. These two companies could arrange to swap currencies by
establishing an interest rate, an agreed upon amount and a common maturity date for the exchange.
Currency swap maturities are negotiable for at least 10 years, making them a very flexible method
of foreign exchange.
TEXT TO TRANSLATE:
57. Future Perfect
IF YOU believe what you read in newspapers, derivatives (options, swaps and so on) are
new, complex, risky and nasty—and of value only to those who make money selling them. In the
mid-1990s, indeed, rapid growth in derivatives markets (not to mention some spectacular losses by
those that used them) prompted concerns among regulators that derivatives might pose a threat to
the global financial system.
In recent years these worries have abated, as regulators have become better acquainted
with such instruments and even the most complex can be broken down into two easily understood
blocks: forward contracts, in which one party agrees to buy something from another at a specified
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future date for a specified price; and option contracts, in which one party agrees to provide the
right—but not the obligation—to another to buy or sell something in the future.
Neither is exactly new. Aristotle mentions options in "Politics"; and there was an active
market in tulip options in Amsterdam in the 17th century. In the same century an organised market
for future delivery of rice was developed in Osaka. Even before that, traders at medieval fairs used
arrangements that were recognisably forward contracts. Much of the arcane language merely
reflects the fact that these two blocks are being applied and combined in different ways.
Forward markets are the simplest. In the markets for perishable commodities, their forward
price is determined by expectations about future demand and supply. For financial assets, the price
is determined by the cost of holding the asset. In foreign-exchange markets, for example, the
forward rate is arrived at by looking at the difference between two currencies' interest rates. Since
no payments are made until the contract expires, the forward rate simply reflects the fact that one
currency is paying higher interest. If it did not, somebody could buy the currency and sell it back at
the same price, earning greater interest over the life of the contract. In other words, forward prices
are not a market's prediction about the direction a financial asset is likely to take.
Calling the options
Options are different. They are a form of insurance. They enable a purchaser to buy or sell
an asset at a certain price on a given date, but allow him to walk away if he wishes. The right to buy
is generally dubbed a "call", and to sell a "put". There is also a difference between European-style
options, which can be exercised (cashed in) only when they expire, and American-style ones, which
can be exercised at any time during the option's life. So, for example, if a person buys a European-
style six-month call option on Citigroup, he would buy an option that has a six-month life, and can
be exercised at the end of six months. If Citigroup's share price falls in the meantime, he will not
exercise the option.
Derivatives are traded in two types of market. The first is on exchanges, such as the
London International Financial Futures and Options Exchange (LIFFE), or the Chicago Board of
Trade (CBOT). The second is the over-the-counter (OTC) market—that is, people and firms trading
directly with one another.
A hedge by any other name
Many things have contributed to the 12-fold increase since 1990 in the use of derivatives.
Originally, the main demand came from farmers and those to whom they sold. Farmers knew their
costs; to prosper (even to survive), they needed to know at what price they could sell their produce.
The CBOT was set up as an agricultural exchange in 1848.
In recent decades, demand has come mainly from those who wish to hedge financial
exposures. Financial markets became more volatile in the 1970s and 1980s. After the breakdown of
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the Bretton Woods system of fixed exchange rates in the early 1970s, exchange rates became much
more volatile. This was exacerbated by the two oil shocks in that decade and by higher inflation—
which also led to more volatile interest rates. Demand for instruments to guard against these risks
surged.
The first currency futures were launched by the Chicago Mercantile Exchange's
International Monetary Market in 1972; and the first interest-rate futures by the CBOT in 1975.
Since then, derivatives exchanges have sprung up in all developed economies and in many
developing ones.
Risky galore
Do derivatives make the world riskier? Certainly, some companies that have used them
have lost lots of money. Think, for example, of Procter & Gamble, which lost heavily in 1994 (as
did several other firms) by using complex interest-rate swaps; or of Barings, a British bank that was
felled in 1995 by the activities of an employee, Nick Leeson, in Japanese stockmarket futures and
options markets.
Yet in such cases derivatives were not, of themselves, the main culprits. Either or both of
two other problems were generally to blame. Many companies that lost money using derivatives
treated their treasury departments, which deal with the cash coming into and out of a company and
organise its borrowing, as a profit centre. This gave them an incentive to take risk. The second
common fault has been bad risk management. In some cases—Barings is an example— this has
opened the way for fraud.
Others argue that derivatives increasingly affect the instruments on which they are based—
the tail wagging the dog. This argument, too, is wrong-headed. Derivatives are simply another,
more efficient way of dealing in the underlying instrument (and swaps have no underlying
instrument anyway); there is no tail and no dog, since it is all one market.
VOCABULARY:
regulator – регулирующий орган, орган надзора
203
exacerbate - обострять, осложнять, углублять, усиливать ( кризис, недовольство)
VOCABULARY CHECK
1) В отличие от форвардного контракта фьючерсный торгуется на бирже, имеет
стандартизированные условия и обычно не предполагает физической поставки товара.
2) Спекулянты стремятся получить прибыль при возможном изменении цен.
3) Задача хеджера – минимизация ценового риска, страхование от возможных
потерь.
4) Открыть длинную позицию» или «принять длинную позицию» означает купить
базовую валюту, и наоборот, «открыть короткую позицию» значит продать базовую валюту.
Так, на пример, совершение сделки на покупку 100 000 EURUSD означает покупку 100 000
евро за доллары. Тем самым происходит открытие длинной позиции по евро.
5) Опцион на покупку - опцион, дающий право, но не обязывающий купить
фьючерсный контракт, товар или иную ценность по заранее установленной цене.
Используется при игре на повышение.
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SECTION 5 WRONGDOING, CORRUPTION, INSIDER
DEALING
LEAD-IN
The buying or selling of a security by someone who has access to material, nonpublic
information about the security is insider dealing or insider trading
Insider trading can be illegal or legal depending on when the insider makes the trade: it is
illegal when the material information is still nonpublic. Trading while having special knowledge is
unfair to other investors who don't have access to such knowledge. Illegal insider trading therefore
includes tipping others when you have any sort of nonpublic information. Directors are not the only
ones who have the potential to be convicted of insider trading. People such as brokers and even
family members can be guilty.
Insider trading is legal once the material information has been made public, at which time
the insider has no direct advantage over other investors. The SEC, however, still requires all
insiders to report all their transactions. So, as insiders have an insight into the workings of their
company, it may be wise for an investor to look at these reports to see how insiders are legally
trading their stock.
Chinese walls are measures that you can take to stop knowledge in one department of your
company being illegally used by another department, to buy or sell shares for example.
Price fixing occurs when a group of companies in the same market secretly agree to fix
prices at a certain level, so they do not have to compete with each other.
When a group of investors work together to stop a financial market functioning as it
should, to gain an advantage for themselves, it is called market rigging:
An illegal payment to persuade someone to do something is a bribe, or informally a
backhander (BrE only), kickback or sweetener. To bribe someone is bribery. Someone who
receives bribes is corrupt and involved in corruption.
A type of fraud where someone illegally gets money from their employer is embezzlement.
One accountant sent false invoices to the company he worked for, and paid money from his
company into bank accounts of false companies he had “created”. He embezzled $2 million – quite
a scam.
Money laundering is the practice of engaging in financial transactions in order to conceal
the identity, source and destination of the money in question. Hiding the illegal origin of money is
common – gangsters buy property with money from drugs. When they sell the property, the money
becomes “legal”. But banks now help by telling when someone makes a large cash deposit.
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VOCABULARY
insider trading - покупка (акций) осведомленным лицом; инсайдерская
insider dealing [внутренняя] торговля: сделки по купле-продаже акций,
совершаемые, когда покупатель или продавец располагает какой-
л. конфиденциальной (внутренней) информацией о компании-
эмитенте (напр. сведениями о предстоящем поглощении
компании); проведение таких сделок обычно считается
незаконным
insider information - внутренняя информация: информация о компании, недоступная
широкой общественности
SEC - Комиссия по ценным бумагам и биржам: независимое
Securities and Exchange федеральное ведомство, в задачи которого входит регулирование
Commission операций с ценными бумагами, контроль за соблюдением законов
и правил деятельности бирж и финансового рынка, защита
инвесторов от мошенничества
Chinese wall - «китайская стена», принцип «китайских стен»: строгое
разграничение функций и информации между подразделениями
фирмы или другой организации; разделение функций банка в
сфере корпоративных финансов и торговли ценными бумагами во
избежание злоупотреблений в связи с использованием
внутренней информации
price fixing - фиксация цен(ы): установление и поддержание цены на
определенном уровне, часто не соответствующем реальной
рыночной конъюнктуре; обычно имеется в виду ситуация, когда
несколько фирм договариваются о поддержании общей цены,
действуя как единый монополист
market rigging - манипулирование рынком: искусственное повышение или
понижение цены (курса)
bribe - взятка, подкуп
backhander
bribery - взяточничество
Syn. corruption
embezzlement - растрата, хищение; присвоение (денег, имущества обманным
путем )
embezzle - растрачивать ( деньги, состояние ); присваивать (обманным
путем чужие деньги )
Scam - афера
money laundering - отмывание денег; утаивание сомнительных источников дохода
COMPREHENSION QUESTIONS:
1) What is insider dealing (insider trading)?
2) When is insider dealing considered to be illegal?
3) Are companies’ directors the only ones who have the potential to be convicted of
insider trading?
4) Why does SEC require all insiders to report all their transactions?
5) When does price fixing occur?
206
6) What can a group of investors do to gain an advantage for themselves in the market?
VOCABULARY PRACTICE
An example of illegal insider trading may be that you, as an assistant to the Chief
Executive Officer, learn that your company is going to be taken over before it is announced to the
stock exchange. Knowing that such a move is liable to cause the price to rise, you buy shares in the
company and subsequently profit from the transaction. A less dramatic (but still potentially
lucrative) example would be trading on the quarterly earnings/losses shortly before they are
announced.
Organized criminals, in particular drug traffickers, generate large amounts of cash which
they must convert and legitimize in order to benefit from, and further finance their illegal activity.
This is called money laundering.
TEXT TO TRANSLATE:
58. Soros found guilty of insider trading
Billionaire financier and philanthropist George Soros has been fined 2.2m euros (Ј1.4m;
$2.3m) for insider trading.
A Paris court found Mr Soros guilty of profiting from inside knowledge of a 1988 takeover
bid for Societe Generale, a French bank.
Mr Soros, who was not in court, denied the allegations.
In a statement he said he was "astounded and dismayed" by the ruling, and would "appeal
the decision to the highest level necessary".
"Let me repeat now what I have maintained from the start: at no point was I in possession
of inside information regarding Societe Generale," he said.
"The charges against me are unfounded and without merit."
His lawyers had argued that the incident was too far in the past to achieve a fair trial.
Two of his co-defendants, Lebanese financier Samir Traboulsi and Jean-Charles Naouri, an
aide to former finance minister Pierre Beregevoy, were acquitted.
Cashing in
The charges relate to a raid on Societe Generale by tycoon Georges Pebereau, who built up
a substantial stake in the bank before trying to take control.
The bid failed, but not before the bank's share price had more than doubled.
Mr Soros and three other defendants, the court found, bought Societe Generale stock when
it was cheap, and cashed in their investment when the price rose after the bid became public.
Two other businessmen implicated in the scandal - Edmond Safra and Robert Maxwell -
have since died.
207
The affair was widely seen as a symptom of the corruption of public life in France under
the presidency of Francois Mitterrand, from 1981 to 1995.
Mr Pebereau, who has never been charged with any offence in relation to the Societe
Generale deal, was acting at the instigation of Mr Miterrand's socialist administration, which
opposed the bank's privatisation under the previous government.
High profile
Mr Soros is no stranger to controversy.
He is widely known as the man who broke the pound, after helping force sterling out of
Europe's exchange rate mechanism in 1992.
Mr Soros, Hungarian-born but domiciled in the US, was also reportedly the first American
to earn a billion dollars in a single year.
In recent years, he has shifted his focus to his wide range of charitable projects, which
concentrate on developing democracy and education in Eastern Europe.
208
The proposals would allow companies to buy and hold their shares, similar to the Treasury
Stock system used in the US.
Two policy making panels, convened to discuss market support measures, backed the idea
but warned that Japan's wayward disclosure regime could create opportunities for abuse.
They urged the government to ensure that proper measures were in place to prevent
privileged information being leaked to the market before proposing to relax the environment
surrounding share buy-backs.
The government is keen to support share prices to alleviate the pressure on smaller
shareholders. The Nikkei 225 has dropped from a high of about 20,000 last year to under 14,000.
An investigation into insider dealing ahead of Toyota's announcement could confirm fears
that market support measures would not benefit the people they were designed to help.
Toyota's decision to buy back its own shares was prompted by Japan's banks unwinding
their holdings in the company. This put considerable selling pressure on its share price.
As Japanese banks continue to unwind their holdings in a number of major Japanese
companies, further selling pressure on those companies' shares and the wider market is expected.
The government hoped that liberalising share buybacks would remove the discrepancy
between the supply and the demand for those companies' shares.
VOCABULARY CHECK
1) Инсайдерские торговые операции – это операции с ценными бумагами на основе
внутренней информации о деятельности компании-эмитента.
2) Инсайдерская торговля может быть как легальной, так и незаконной, в
зависимости от степени доступности информации.
3) В инсайдерскую торговлю потенциально могут быть вовлечены не только
директора компаний, но и члены их семей, брокеры и др. заинтересованные лица.
4) Комиссия по ценным бумагам и биржам (США) требует, чтобы все лица,
имеющие доступ к внутренней информации о корпорации, сообщали о своих сделках.
5) Группа инвесторов может манипулировать рынком с помощью определенной
стратегии для получения спекулятивной прибыли.
6) С целью выявления незаконных сделок банки в настоящее время могут
предоставлять информацию о клиентах с большим количеством денег на счетах.
209
CASE STUDY:
Investors shun Fibernet after rights issue
Fibernet Group yesterday incurred the anger of investors when it announced it was to
raise £77m through a deeply-discounted rights issue. This was partly due to hostile sentiment
A 23 per cent decline in the stock to £10.20, down 307.5p, reflected alarm at the
prospect of more shares being introduced into a market already saturated with telecoms shares.
Four new shares are being offered for every existing 15 at a knock-down price of 600p,
The move provides further evidence that deeply-discounted rights issues have returned
to fashion.
Most of the proceeds are earmarked for investment in the group's planned fibreoptic
network in France, with the remainder to be spent in the UK developing digital -subscriber lines
(DSL), which provide high-speed internet access through upgraded copper telephone wires.
Charles McGregor, chief executive, said the heavy discount was necessary to guard
against a repeat of this week's telecoms issues - by KNP of the Netherlands, Telekom Austria and
Telefonica Moviles of Spain - which all either fell below or remained close to their issue price.
Some analysts questioned why Fibernet, with £41m of cash on its balance sheet, needed
more funding at this time. But others said it was a brave move that would ensure its DSL roll-out
in the UK and its European expansion, in France and Germany, were not delayed.
Small Telecoms operators, such as Fibernet which are competing for the growing demand
from businesses for broadband voice and data communications, have found their balance sheets
under scrutiny as the high cost of building networks drains their cash.
'The sector will succumb to the laws of natural selection. Well-funded companies will get
stronger, while the less well-funded will go bankrupt. This deal leaves Fibernet fully-funded,' said
Mr Williams.
News of the rights issue obscured results showing pretax profits in the year to August 31
of £3.4m, compared to a £4.6m loss last year - the first time the group had generated a full-year
surplus.
210
1. What was the strategic decision that required the capital Fibernet raised from the
rights issue?
2. Using evidence from the text and your own knowledge, explain why you think that
Fibernet used a rights issue of shares rather than taking out long-term loans.
3. Examine the likely reaction of shareholders to this financing decision in:
- the short term,
- the longer term.
211
Part 1
Unit 6
ACCOUNTING AND
BANKRUPTCIES
212
UNIT 6
ACCOUNTING AND BANKRUPTCIES
At the heart of modern financial accounting is the double-entry bookkeeping system. This
system involves making at least two entries for every transaction: a debit in one account, and a
corresponding credit in another account. The sum of all debits should always equal the sum of all
213
credits. This provides an easy way to check for errors. This system was first used in medieval
Europe, although claims have been made that the system dates back to Ancient Greece.
The subject of accounting is the calculation of the financial results of an economic entity’s
business activity. Accounting can show the managers or owners of a business whether or not the
business is operating at a profit, whether or not the business will be able to meet its commitments as
they fall due.
In accounting, it is always assumed that a business is a going concern, i.e. that it will
continue indefinitely into the future – which means that the current market value of its fixed assets
is irrelevant, as they are not for sale. Consequently, the most common accounting system is
historical cost accounting, which records assets at their original purchase price, minus accumulated
depreciation charges. In times of inflation, this understates the value of appreciating assets such as
land, but overstates profits as it does not record the replacement cost of plant or stock.
Assets such as machinery and equipment lose value over time because they wear out, or
are no longer up-to-date. This is called depreciation or amortization. For example, when new
computers are bought they are depreciated or amortized over a very short period, usually three
years, and a charge for this is shown in the financial records: the value of the equipment is written
down each year and written off completely at the end.
The value of a business’s assets under historical cost accounting – purchase price minus
depreciation or amortization – is known as its net book value.
A company’s financial performance for a period is its results. Company law specifies that
shareholders must be given certain financial information. Companies generally include three
financial statements in their annual reports. They are: the balance sheet, the profit and loss account,
cash-flow statement.
VOCABULARY
accountancy - бухгалтерский учет (чаще используется в значении
"профессиональная деятельность")
accounting - (бухгалтерский) учет; бухгалтерское дело: система сбора и
обработки финансовой информации о предприятии,
позволяющая пользователям выносить обоснованные
суждения о финансовом положении организации или
физического лица и принимать экономические решения
financial accounting - финансовый учет: процесс сбора и обработки информации
об экономической деятельности организации, ее ресурсах и
обязательствах, завершающийся составлением финансовой
отчетности
tax accounting - налоговый учет
managerial accounting - управленческий учет
214
cost accounting - калькулирование себестоимости (стоимости), учет издержек
auditing - аудиторская проверка; аудит: проверка отчетности и
audit учетных процедур компании на предмет их соответствия
установленным правилам учета
auditor - аудитор, аудиторская компания
regulators - контролирующие организации; регулирующие органы
bookkeeping - счетоводство, ведение бухгалтерских книг: стадия учета,
которая заключается в регистрации хозяйственных операций в
учетном регистре
window dressing - вуалирование, приукрашивание: действия, направленные на
придание финансовой отчетности желаемого вида, т. е. на
создание видимости более хорошего финансового положения,
чем оно есть на самом деле
creative accounting - креативная бухгалтерия, творческий учет: метод учета,
предоставляющий возможность манипулирования
финансовыми показателями за счет использования
неоднозначной трактовки законодательства (не считается
незаконным)
double-entry bookkeeping - система двойной записи: система учета, в соответствии с
которой каждая операция отражается одновременно по дебету
одного и кредиту другого бухгалтерского счета
debit - дебет: левая сторона бухгалтерских счетов
credit - входящая сумма или сальдо, записанное на правой стороне
бухгалтерского счета
economic entity - хозяйственная (экономическая) единица; экономический
economic unit субъект
going concern - действующее предприятие: предприятие, функционирование
которого планируется в течение неограниченного времени
historical cost accounting - учет по себестоимости (бухгалтерский учет в
фиксированных ценах или ценах приобретения актива)
depreciation charges - амортизационные отчисления: часть стоимости основных
средств, переносимая на стоимость других активов или
включаемая в расход отчетного периода
understate - занижать
overstate - завышать; преувеличивать
depreciation - снижение стоимости; обесценение, обесценивание;
снашивание (в результате износа и морального устаревания);
амортизация: постепенное списание стоимости актива в
расходы тех отчетных периодов, в которых ожидается
получение выгод от использования этого актива; (в
Великобритании данный термин употребляется только по
отношению к материальным активам, а для обозначения
амортизации нематериальных активов используется термин
"amortization")
amortization - амортизация
write down - списывать (частично; постепенно)
write off - списывать (полностью; окончательно); исключать из баланса
(со счетов) суммы безнадежных долгов или бесполезных
активов (напр. полностью изношенного имущества)
net book value - остаточная [чистая] балансовая стоимость: первоначальная
стоимость актива за вычетом накопленной амортизации,
215
отраженная в бухгалтерском учете и отчетности
book value - балансовая стоимость: стоимость, по которой элемент
активов, обязательств или собственного капитала отражается
в балансе
at book value - по балансовой стоимости
financial performance, - финансовый результат: характеристика эффективности
results деятельности предприятия или его подразделения
financial performance - финансовые показатели результатов деятельности
measures
financial statement - финансовый отчет
COMPREHENSION QUESTIONS:
1) What does accountancy/accounting refer to?
2) What is bookkeeping?
3) What is the purpose of auditing?
4) Is creative accounting considered to be illegal?
5) How does double-entry bookkeeping system work?
6) What does a going concern refer to?
7) What is the most common accounting system?
8) What is called depreciation/amortization?
9) What is known as net book value?
10) What financial statements do companies usually include in their annual reports?
VOCABULARY PRACTICE
Companies record their fixed assets at historical cost because they do not need to know
their real value; if a company is a going concern they are not for sale.
Historical cost accounting usually underestimates the value of assets that appreciate (gain
value), such as land and buildings.
A sound understanding of financial statements will help you identify unfavorable trends
and tendencies in your business's operations for example, the unhealthy buildup of inventory or
accounts receivable, before the situation becomes critical.
While amortization and depreciation are often used interchangeably, technically this is an
incorrect practice because amortization refers to intangible assets and depreciation
refers to tangible assets.
Ford Credit's results were affected by higher borrowing costs, the unit said in a separate
statement.
Using all available accounting procedures and tricks to disguise the true financial position
of a company is called “creative accounting”.
216
Computers enable accountants and auditors to be more mobile and to use their clients’
computer systems to extract information from databases and the Internet.
TEXTS TO TRANSLATE:
60. The Power of Four
The auditing profession is dangerously concentrated
WHATEVER you might think if your accounts have ever been qualified, auditors are only
human. And humans tend to exploit their power. So it is understandable that Britain's accounting
watchdog revealed last week that investors and the finance directors of the country's big companies
worry about the dominance of the big four auditing firms - Deloitte, Ernst & Young, KPMG and
Pricewaterhouse-Coopers (PWC). This is not a uniquely British problem: accounting is a global
profession - and it needs a global solution. Audits are vital to investors, who need trustworthy ac-
counts if they are to allocate capital efficiently. It is everyone's business to have confidence in what
they do. Past doubts have centred on the conflicts of interest when an auditor earns large fees for
selling tax advice or consultancy. And there have been welcome moves to save auditors from such
temptations.
The worries that emerged this week were about choice. If one of the big four international
accounting firms collapsed, some large quoted companies might be stuck without an alternative.
Many companies even now have only three to choose from, because they buy non-audit services
from one of the big four. Since audit firms tend to specialise by industry, some companies have no
choice at all. The darker version of this theme is that the four will use their power to hold sway with
litigators, regulators and standards setters. On the one hand, they dominate the profession's official
bodies; on the other, they cannot be too severely sanctioned for fear that four might become an even
more dominant three.
It is not an idle threat. The profession is in this pickle only because Andersen, the auditor
of Enron and WorldCom, collapsed in 2002 after its conviction (later overturned) for obstruction of
justice. Since then Japan's financial regulator has suspended the audit licence of PWC'S Japanese arm
for two months and Ernst & Young's American arm was banned in 2004 for six months from taking
on new public-company audit clients for reckless and negligent conduct. It is hard to avoid the
suspicion that Ernst was allowed to keep its existing clients for fear of the consequences if they
were taken away. One of the reasons American prosecutors did not indict KMPG last year for its part
in a case of massive alleged tax fraud may have been to avoid the risk of another Andersen-like
collapse.
Imbalance sheet
217
Everyone has his own fix for this mess. Least appealing is one of the auditors' own
proposals, that the state protect them by capping their liabilities if they are sued for damages. Aca-
demic research suggests that similar legislation in America has led auditors to cut corners and take
risks. Others think the best solution is to help the second-tier accounting firms audit the big
companies. The trouble is that smaller firms would invest in gaining expertise only if they had a
good chance of being appointed. But, without a reputation, firms' appeal is limited. The best way to
ensure independence (and weaken the stranglehold of the big auditors) is compulsory rotation: cli-
ents should be required to appoint a new firm every seven years or so. Bring in that change and four
big auditors would not seem too few. Meanwhile, regulators have no business giving big firms an
easy ride just because they fear what will happen if they do what is right. If one of the big four
collapses, so be it. Then the moment for drastic remedies will be at hand and the remaining big
three should be split up.
VOCABULARY:
Britain's accounting watchdog – орган, занимающийся регулированием деятельности
профессиональных бухгалтеров и аудиторов Великобритании
Everyone has his own fix for this mess – Каждый предлагает свое решение данной
проблемы.
VOCABULARY CHECK
1) Бухгалтерский учет - система сбора и обработки финансовой информации об
экономическом субъекте, дающая возможность делать выводы о финансовом положении
организации и принимать экономические решения.
2) Cистема двойной записи - это система учета, в соответствии с которой каждая
операция отражается одновременно по дебету одного и кредиту другого бухгалтерского
счета.
3) Управленческий учет необходим для принятия управленческих решений.
4) Система учета по себестоимости, которая отражает активы по цене
приобретения за вычетом накопленных амортизационных отчислений, является наиболее
распространенной системой составления бухгалтерской отчетности.
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5) Годовой отчет обычно включает в себя три финансовых отчета.
6) Со временем машины и оборудование теряют стоимость в результате
изнашивания или устаревания. Этот процесс называется амортизацией.
7) Отчисления на амортизацию отражаются в финансовой отчетности. Стоимость
оборудования списывается постепенно каждый год.
8) Остаточная балансовая стоимость представляет собой первоначальную
стоимость актива за вычетом накопленной амортизации.
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thereafter. The second comes from retained earnings which the company is able to accumulate
over time through its operations. In most cases, the retained earnings portion is the largest
component.
Shareholders' equity represents a company's total net worth. In order for the balance sheet
to balance, total assets on one side have to equal total liabilities plus shareholders' equity on the
other.
The balance sheet, along with the profit and loss account and cash flow statement, is an
important tool for investors to gain insight into a company and its operations. The balance sheet is a
snapshot at a single point in time of the company’s accounts - covering its assets, liabilities and
shareholders’ equity. The purpose of the balance sheet is to give users an idea of the company’s
financial position along with displaying what the company owns and owes. It is important that all
investors know how to use, analyze and read one.
Below is an example of a balance sheet:
Balance Sheet for Wal-Mart
As of Jan 31, 2006
Assets Liabilities and
Shareholders’ Equity
Current assets: Current Liabilities:
Cash and Cash Equivalents 6,414 Commercial Paper 3,754
Receivables 2,662 Accounts Payable 25,373
Inventories 32,191 Accrued Liabilities 13,465
Prepaid Expenses and Other 2,557 Accrued Income Taxes 1,340
Total Current Assets 43,824 Long-term Debt, due within one 4,595
year
Obligations Under Capital Leases, 299
due within one year
Property and Equipment, at cost: Total Current Liabilities 48,826
Land 16,643
Buildings and Improvements 56,163 Long-term Debt 26,429
Fixtures and Equipment 22,750 Long-term Obligations Under 3,742
Capital Leases
Transportation Equipment 1,746 Deferred Income Taxes and Other 4,552
Total Property and Equipment, at 97,302 Minority Interest 1,467
cost
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Property Under Capital Lease, net 3,415
Goodwill 12,188 Total Shareholders’ Equity 53,171
Other Assets and Deferred Charges 2,885
Total Assets 138,187 Total Liabilities and 138,187
Shareholders’ Equity
The assets and liabilities sections of the balance sheet are organized by how current the
account is. So for the asset side, the accounts are classified typically from most liquid to least
liquid. For the liabilities side, the accounts are organized from short to long-term borrowings and
other obligations.
Firms in a good situation are said to have a strong balance sheet and those that are not, a
weak one. Things that are not shown in the balance sheet but in a footnote, for example, are off-
balance sheet.
A company’s balance sheet may include provisions for potential losses, such as bad debts,
debts that may never be paid. If it looks almost certain that a debt will not be paid, it is considered a
write-off and written off.
Provisions are liabilities, the amount of which cannot be established precisely, or the
occurrence of which is uncertain. Provisions should be distinguished from reserves, which are
amounts set aside under equity for future use with respect to obligations which may arise from
probable or possible events.
VOCABULARY
accounting equation - уравнение баланса, балансовое [бухгалтерское] уравнение
(формула, лежащая в основе составления бухгалтерского баланса)
assets - активы
current assets -текущие оборотные активы; оборотный капитал: активы, которые
являются частью капитала обращения предприятия и часто
оборачиваются в ходе коммерческой деятельности; к наиболее
распространённым видам текущих оборотных активов относятся
товарная наличность, дебиторская задолженность и наличность
fixed assets - основные средства, материальные (долгосрочные) активы, основной
капитал; активы, которые фирма приобретает для длительного
использования в процессе экономической деятельности, а не для
перепродажи: здания, сооружения, машины, оборудование, земля и т.
п.
tangible assets - материальные (осязаемые) активы: оборудование, здания, ценные
бумаги и т. п.
intangible assets - нематериальные (неосязаемые) активы; не имеют материального
выражения, но способны приносить доход своему владельцу, напр.,
репутация фирмы, капитализированные права, привилегии, торговые
марки, арендные контракты, франшизы, конкурентные преимущества
и т. д.
goodwill - “гудвилл”; деловая репутация; условная стоимость репутации и
деловых связей фирмы
liabilities. - обязательства; пассивы
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current (short-term) - текущие (краткосрочные) обязательства; текущие пассивы:
liabilities задолженность, подлежащая погашению в течение ближайшего года
long-term liabilities - долгосрочные обязательства
accrued expenses - начисленные (накопленные) обязательства (расходы): затраты,
accumulated expenses которые будут оплачены до конца отчетного периода, но еще не
выплачены; в балансе относятся к краткосрочным обязательствам
shareholders'(or - акционерный (собственный) капитал, чистая стоимость компании,
owners’) equity нетто-стоимость (активов) компании: все активы минус все
обязательства компании
retained earnings - нераспределенная прибыль: чистая прибыль компании, не
retained profits распределенная среди акционеров, а направленная в резервы или на
undistributed profits другие цели (реинвестированная в бизнес)
accumulated earnings
balance sheet - бухгалтерский баланс, балансовый отчет: финансовый отчет, в
котором отражаются активы и пассивы компании по состоянию на
определенную дату
annual balance sheet - годовой баланс
strong balance sheet - речь идет об устойчивом, стабильном финансовом положении
организации
weak balance sheet - балансовый отчет, свидетельствующий о том, что финансовое
положение компании нестабильно
off-balance sheet - внебалансовый отчет
bad debt - безнадежный долг, безнадежная задолженность: долг, взыскание
которого не представляется возможным
provision - резерв на покрытие выплат по обязательствам; резерв предстоящих
расходов и платежей
reserves - резервный фонд, резерв, резервы: средства, которые не
используются, оставлены для будущих платежей (напр., резерв по
безнадежным долгам, банковский резерв, золотовалютные резервы
государства)
COMPREHENSION QUESTIONS:
1) What does the basic accounting equation state?
2) What do current assets include?
3) What is the life span of fixed assets?
4) What could fixed assets be divided into?
5) What are liabilities?
6) What is the difference between long-term and current liabilities?
7) What two main sources does shareholders’ equity come from?
8) What is a balance sheet? What is its purpose? How is it organized?
9) What do we say about firms in a good/bad situation?
VOCABULARY PRACTICE
Assets are anything that have value. Your house, car, checking account, and the antique
china set your grandma gave you are all assets. Companies figure up the dollar value of everything
they own and put it under the asset side of the balance sheet.
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Liabilities are the opposite of assets. They are anything that costs a company money.
Liabilities include monthly rent payments, utility bills, the mortgage on the building, corporate
credit card debt, and any bonds the company has issued.
Retained earnings are what's left after dividends are paid. This money is either used for
future business ventures or invested back into the company for growth purposes.
Companies have intangible assets, whose value is difficult to quantify or turn into cash,
such as goodwill, patents, copyright and trade marks.
One of the most basic concepts of accounting involves determining if an item is an asset or
a liability. Unpaid payroll expenses, unpaid interest on notes, and taxes incurred but not yet paid
are liabilities. Although not yet paid, they must be accounted for within the company’s financial
records. Thus, the entries of “accrued” expense were born. Accrued expense refers to an expense
that has been incurred but not yet paid.
Bad debt is usually a product of the debtor going into bankruptcy or where the additional
cost of pursuing the debt is more than the amount the creditor could collect. This debt, once
considered to be bad, will be written off by the company as an expense.
TEXTS TO TRANSLATE:
61. Bank Reform in Japan
Seriously?
THIS might, just might, be a turning-point for the crisis at Japan's banks. Just as everyone
was beginning to think the banks would stagger along half-dead for ever, a trio of powers has
emerged—and it seems to be bent on real reform. In a striking break with the past, the Financial
Services Agency (FSA), the Bank of Japan (BOJ), and the Keidanren, the powerful group
representing business interests, have all reached an understanding. As early as next month, a broad
set of financial and structural reforms to clean up the banks and their borrowers could be set out.
Hakuo Yanagisawa, the minister in charge of financial affairs, is leading the attack. This
week he demanded that banks write off their bad loans rather than just set aside provisions to cover
potential losses. That practice often understates bad loans, which have worsened at many banks,
leading to a second round of losses. Mr Yanagisawa has also urged banks to speed up their bad-
loan disposals. Banks have ditched some ¥70 trillion ($620 billion) of non-performing loans over
the past ten years; that much and more still sits on their books.
If banks get more serious about excising bad debts, many will end up in the red when they
next close their books. Mr Yanagisawa has indicated that as long as they show they are serious
about cleaning up, then the FSA will tolerate this. In turn, the central bank, a long-time advocate of
wholesale bank reform, is also ready to help, by setting up a mechanism to provide needed liquidity
to cash-strapped banks.
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Many weak, indebted borrowers would be driven out of business should the banks start
writing off bad debts and cutting credit lines. That is why the Keidanren's support for painful reform
is startling, if welcome. Its chairman, Takashi Imai, conceded this week for the first time that pain,
at least in the short term, was necessary to revive corporate fortunes. "Unless some of the players
jostling around [in the corporate sector] leave the field," he said, "we won't be able to shake off this
unhealthy deflation."
There is little doubt that the weakness of the stockmarkets, which are hovering close to a
15-year low, has prompted the latest flurry of reforming zeal. But whether banks can be cajoled into
acting is still unclear. With luck, they will grab this opportunity to clean up their books. After all,
most are already being pushed to the brink by huge bankruptcies, actual or pending, such the
collapse of Phoenix Resort, a resort operator, which failed on February 19th with ¥270 billion of
liabilities. If they fail to act, the FSA could use the threat of stricter inspections, for one, to prod
them.
Mr Yanagisawa has already accomplished a good deal since he was appointed minister
(for the second time) last December. He still has a long way to go. For starters, he must explain the
nitty-gritty of his reforms, and how they will be carried out. One issue is how the banks are to write
off their bad loans. There are several ways this could be done. Simply to forgive debt would raise
questions of moral hazard, inviting companies to take wild risks on the assumption that they would
be bailed out. Selling bad loans to third parties in the market for distressed debt would help banks,
but would leave the problems of the corporate sector unresolved. One solution might be to split
companies into good bits, which survive, and bad bits, which are got rid of.
Another matter which has not yet been addressed is the issue of management
responsibility. The managers that got banks into this mess are still at their desks, and it is hard to
see how revived banks can prosper in future under such a benighted lot. Furthermore, Mr
Yanagisawa's assumption that banks will not need another injection of public funds in order to
survive these massive write-offs may also prove mistaken.
The biggest risk is that Mr Yanagisawa may not be around to push through his reforms.
Cutting off credit lines and forcing companies to go bust would meet with a deal of opposition, not
least from the ruling Liberal Democratic Party. Yoshiro Mori, the prime minister, gets more
unpopular by the day. Mr Mori, a pork-barrel politician, is unlikely to back full-scale bank reform
in his present, vulnerable state. Yet should he go, there are no guarantees that Mr Yanagisawa will
be asked to stay on to complete the job.
VOCABULARY:
… has also urged banks to speed up their bad-loan disposals - … также настоятельно
рекомендовал банкам поскорее списать сомнительные долги
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nonperforming loans - реально не функционирующиe (займы, по которым не
выплачиваются проценты)
close their books - подвести итог ( подвести итоги по данным в бухгалтерских книгах
и вывести сальдо по балансу в конце отчетного периода )
bail out – оказывать помощь при выходе из сложной финансовой ситуации (часто со
стороны государства)
benighted – некомпетентный
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• Borrowing works like leasing, but applies to any form of asset, including property,
although upkeep is down to the borrower. It also isn't necessarily limited to assets. Take the
Flexible Business Loan from NatWest, for example, which can finance anything from new
equipment to taking on more staff. It can also offer more flexibility with regards to repayment
options than other finance sources, such as repayment holidays, the ability to change repayment
amounts and frequency of repayments.
Tailored to the business
Asset finance is a hybrid of leasing and borrowing, and as with these options, costs can be
spread. What's more, with some lenders repayments can be made to coincide with incoming
revenue.
Asset finance also works at a fixed rate, the contracts can be suited to the business and the
asset, and as it is independent, it does not require companies to open an account. In addition, the
upkeep of the asset is performed by the asset company. Although businesses never own the assets,
they can still reduce their tax bill by choosing a borrowing or leasing option, as some or all of the
cost is deductible as a business expense.
As the asset is handed back once the contract ends, asset financing usually involves lower
deposits and monthly payments than loans or hire purchase, there are no resale problems and if the
asset is used for business, between 50% and 100% of the VAT paid on rentals can be claimed back.
Businesses can also take advantage of the asset finance company's buying power and its
subsequent service and maintenance. So the monthly price a company pays with asset finance
should be lower than anything offered elsewhere.
Broad coverage
Any tangible asset with a readily available resale market is ideal for asset finance, such as
vehicles, IT equipment, construction equipment and marine products. Vehicles is the biggest sector,
taking £19bn of the £27bn of asset finance provided last year, and third-party finance was used for
almost 50% of all new car registrations in 2005.
A traditional criticism of asset finance was that it was only for established companies
borrowing large sums. This is no longer the case, according to Dryden. "Every client is suitable, but
to make it viable, we look for a capital expenditure of around £15-20,000," he says.
Asset finance is different from a bank loan or an overdraft where the loan is unsecured.
The security is the asset. "If we can identify it we are happy to fund it, so it shouldn't matter how
old the company is," says Dryden. "We take each case on its own merits and tailor the facility to
suit."
226
Lombard differs from other asset finance companies in a few notable ways. "We can put a
relationship manager with a customer anywhere in the UK, and will try to meet face to face rather
than talk on the phone, which is unique to us," explains Dryden.
This also works well for advisors and brokers. "We can make contact with a client almost
immediately," says Dryden. This immediacy also applies to the speed at which a finance application
is dealt with. Lombard would hope to get payment approved within 24 hours, and could get finance
available in a similar time frame depending on the company and the amount required.
VOCABULARY:
asset financing - финансирование активов: привлечение кредитов для оплаты
приобретения тех или иных активов или высвобождения средств, вложенных в
данные активы; обычно такие кредиты обеспечены теми же активами, для
финансирования которых они привлечены (напр., финансирование под дебиторскую
задолженность, финансирование под обеспечение товарно-материальными запасами,
лизинг, покупка в рассрочку и т. д.)
VOCABULARY CHECK
1) Балансовый отчет по структуре обычно представляет собой таблицу, на левой
стороне которой указываются активы, на правой — собственный капитал и обязательства;
активы и обязательства компании показываются в балансе с подразделением на
долгосрочные и краткосрочные.
2) К основным активам относятся материальные, такие как оборудование,
компьютеры, здания, земля, которые фирма приобретает для длительного пользования, и
нематериальные.
3) Значение неосязаемых активов, таких как деловая репутация, торговая марка,
нельзя недооценивать.
4) Собственный капитал рассчитывается как разница между совокупными активами
предприятия и его обязательствами (пассивами).
5) В Великобритании термин ‘depreciation’ употребляется только по отношению к
материальным активам, а для обозначения амортизации нематериальных активов
используется термин ‘amortization’.
6) Балансовый отчет компании может содержать резервы по сомнительным долгам, а
также резервы предстоящих расходов и платежей.
227
SECTION 3 FINANCIAL STATEMENTS AND THE
BOTTOM LINE
LEAD-IN
Along with the balance sheet, companies generally include two more financial statements
in their annual reports.
The profit and loss account (Br.E) or income statement (Am.E) shows earnings or income
and expenditure. It usually gives figures for total sales or turnover, and costs, expenses and
overheads. In theory, if a company makes more money than it spends, it makes a profit. If not, it
makes a loss. But it’s possible for a company to show a profit for a particular period because of the
way it presents its activities under the accounting standards or accounting rules of one country,
and a loss under the rules of another.
A pre-tax profit or a pre-tax loss is one before tax is calculated.
The final figure for profit or loss is what people call informally the bottom line. This is
what they really worry about! The bottom line also means the final result or the most important
aspect of something.
Below is an example of a consolidated profit and loss account according to international
accounting standards (IAS) of Nokia:
Financial year ended December 31 Notes 2006 2005 2004
EURm EURm EURm
Net sales 41121 34 191 29 371
Cost of sales -27 742 -22 209 -18179
Gross profit 13 379 11982 11192
If a company is making a loss, commentators may say that it is in the red. They may also
use expressions with red ink, saying, for example, that a company is bleeding red ink or
haemorrhaging red ink. The phrase "in the red" is used widely to refer to companies that have not
been profitable within their last accounting period. This term is derived from the color of ink used
by accountants to enter a negative figure on a company's financial statements. The phrase "in the
black" is widely used to refer to the condition of companies that have been profitable in their last
accounting period.
The third financial statement has various names, including the funds flow statement,
source and application of funds statement (Br.E), cash flow statement and the statement of
changes in financial position (Am.E). This shows the flow of cash in and out of the business
between balance sheet dates.
Whereas the profit and loss account concentrates on whether a profit or loss has been made
and a balance sheet shows the current worth of the business, a cash flow statement concentrates on
cash.
A cash flow statement records the cash received by a business during the year and the
flows of cash out. It therefore indicates where the firm’s cash funds have come from and how they
have been used.
By concentrating on cash – or liquidity – these statements help managers realize why a
profitable business might be running out of cash. Perhaps substantial capital investment has been
undertaken, or goods have been sold but creditors are being given much longer to pay. These
accounts will also explain why a loss-making business might be ‘cash rich’. Perhaps a loan has been
taken out, creditors have paid back more quickly than usual or a new capital injection from
investors has been made.
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Cash flow can be used as an indication of a company's financial strength. A business with
cash flow difficulties may ask its bank for an overdraft, which is an instant extension of credit from
a lending institution. Their account at the bank is then in the red. This is a form of financing from
the bank (and an expensive one), and the business’s receivables are security for this financing.
VOCABULARY
profit and loss account (Br.E) - отчет о прибылях и убытках, отчет о результатах
income statement (Am.E) хозяйственной деятельности
consolidated profit and loss - консолидированный (сводный) отчет о прибылях и
account убытках, (показывает результаты хозяйственной
деятельности группы компаний как единого целого)
make a profit - получать прибыль
make a loss - нести убытки
accounting standards - стандарты (бухгалтерского) учета
accounting rules
International Accounting - Международные стандарты бухгалтерского учета
Standards (IAS) (финансовой отчетности); МСФО
pre-tax profit - прибыль до вычета налогов
pre-tax loss - убыток до налогообложения (до вычета налогов)
bottom line - нижняя черта, итог, баланс доходов и расходов (прибылей
и убытков) (итоговая строка в финансовой отчетности,
показывающая чистые прибыли и убытки); чистая прибыль
(размер прибыли после налогообложения); окончательный
результат; важный (основной, главный) фактор
in the red - с убытком; выражение, используемое для обозначения
убыточных операций, т. к. раньше в бухгалтерских книгах
убытки записывались красными чернилами
red ink - убытки, потери; отрицательное сальдо (баланса,
финансового отчета)
bleeding red ink - истекающий кровью, обессиленный; стоящий на грани
haemorrhaging red ink банкротства
in the black - без убытков, с положительным сальдо, с прибылью:
выражение, используемое для обозначения безубыточных
операций
cash flow statement - oтчет о движении денежных средств, отчет о денежных
funds flow statement потоках, отчет об источниках и использовании фондов
source and application of
funds statement (Br.E)
statement of changes in
financial position (Am.E)
capital investment - капиталовложения, инвестиции в основной капитал
overdraft - превышение кредита (в банке); овердрафт; задолженность
банку: сумма сверх остатка на текущем счете в банке, на
которую может выписываться чек
security - обеспеченность (напр. кредита), залог
COMPREHENSION QUESTIONS:
1) What financial statements are generally included in companies annual reports?
2) What information is given in the profit and loss account?
230
3) What is the bottom line?
4) When are the expressions ‘bleeding red ink’ or ‘haemorrhaging red ink’ used?
5) In what connection are the phrases ‘in the red’/’in the black’ used?
6) What does cash flow statement show?
7) In what way does the cash flow statement differ from the income statement?
8) What is overdraft?
VOCABULARY PRACTICE
Ford has now lost money in North America in seven of the past eight quarters. The region
had a pretax loss of $1.6 billion in 2005.
Automotive units in South America, Ford of Europe and Asia- Pacific reported profits.
South America's $95 million pretax profit widened from the year-ago $88 million pretax profit;
Europe's pretax profit expanded to $105 million from $66 million; and Asia Pacific's pretax profit
fell to $4 million from $36 million in 2005's second quarter.
The bottom line is the first thing many investors look at to gauge a company's profitability.
The NHS in England will be £750m in the red by the end of the financial year on 31
March, a BBC survey suggests.
What does a company bleeding red ink in the cutthroat PC industry do with spare cash that
it nets from laying off its employees and outsourcing the jobs to India? HP goes shopping!
‘ATI is back in the black’. ATI returned to profitability during the three months to 30
November 2005, the first quarter of the graphics company's 2006 fiscal year.
Overdrafts are generally meant to cover short-term financing requirements - they are not
generally meant to provide a permanent source of finance
TEXTS TO TRANSLATE:
63. Strong Fundamentals and Fundamental Analysis
We hear the word "fundamentals" on an almost daily basis. On CNBC' s "Squawk Box", for
instance, company CEOs come out and proclaim that their companies have good fundamentals.
Analysts and fund managers are always talking about how this or that stock has strong
fundamentals. In turn, there are some traders who proclaim that fundamentals don't actually matter
and investors should rely on 'technical' merits instead. All this talk about fundamentals is confusing.
What are they all talking about?
In the broadest terms, fundamental analysis involves looking at any data, besides the
trading patterns of the stock itself, that can be expected to impact the price or perceived value of a
stock. As the name implies, it means getting down to basics. Unlike its cousin technical analysis,
which focuses only on the trading and price history of a stock, fundamental analysis focuses on
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creating a portrait of a company, identifying the intrinsic or fundamental value of its shares and
buying or selling the stock based on that information.
Some of the indicators commonly used to assess company fundamentals include: cash
flow; return on assets; conservative gearing; history of profit retention for funding future growth;
and soundness of capital management for the maximizing of shareholder earnings and returns.
Think of the stock market as a shopping mall: stocks are the items for sale in the retail outlets.
Technical analysts will ignore the goods for sale. Instead, they will keep an eye on the crowds as a
guide for what to buy. If they notice shoppers congregating inside a computer shop, our technical
analysts will try to buy as many PCs as they can, betting that the growing demand will push PC
prices higher.
Fundamental analysts have a more staid approach. Their sights are set solely on the
products in the mall. Shoppers are dismissed as an unreliable, emotional herd with no inkling of the
real value of the goods for sale. Our fundamental analysts move slowly through the stores seeking
the best deals. Once the crowd moves on from the PCs, they will take a closer look at the ones that
were passed over.
Fundamental analysts might take a stab at determining the scrap value of the PC stripped
down to its hard disk, memory cards, monitor and keyboard. In the stock market, this is akin to
calculating the book value or liquidation price of a company.
They will also take a very close look at the quality of the PC. Is it going to last, or will it
break down within a year? The fundamental analysts will pore over the specifications, scrutinize the
manufacturer's warranty and consult consumer reports. Similarly, equity analysts check a company's
balance sheet for financial stability.
Then, the fundamental analysts might try to understand the performance of the PC in terms
of, say, processing power, memory or image resolution. These are like the forecast earnings and
dividends identified from a company's income statement.
Finally, the fundamental analysts will put together all the data and come up with an
intrinsic value or value independent of the current sale price. If the sale price is less than the
calculated intrinsic value, the fundamentalists will buy it. If not, they will either sell the PCs they
already own or wait for prices to fall before buying another one.
Performing fundamental analysis can be a lot of hard work. But that is, arguably, the
source of its appeal. By taking the trouble to dig into a company's financial statements and assess its
future prospects, investors can learn enough to know when the stock price is wrong. Those investors
able to spot the market's mistakes can make themselves money - a lot of it. At the same time,
buying companies based on intrinsic, long-term value protects investors from the dangers of day-to-
day market flux.
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However, the fact that fundamental analysis shows that a stock is undervalued does not
guarantee that it will trade at its intrinsic value any time soon. Things are not so simple. In reality,
real share price behavior relentlessly calls into question almost every stock holding, and even the
most independently minded investor can start doubting the merits of fundamental analysis. There is
no magic formula for figuring out intrinsic value.
When the stock market is booming, it is easy for investors to fool themselves into thinking
they have a knack for picking winners. But when the market falls and the outlook is uncertain,
investors cannot rely on luck. They actually need to know what they're doing.
That said, there is much that the investor can do to learn about fundamentals. Investors
who roll up their sleeves and tackle the terminology, tools and techniques of fundamental analysis
will enjoy greater confidence in using financial information and, at the same time, will probably
become better stock pickers. At the very least, investors will have a better idea of what is meant
when someone recommends a stock on strong fundamentals.
VOCABULARY:
fundamentals – основы; основные принципы; зд. факторы положения кампании,
такие как: баланс, счет прибыли и убытков и т.д. Используются при анализе для
прогнозирования курсов акций.
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VOCABULARY CHECK
1) Отчет о прибылях и убытках показывает доходы компании, её расходы и
разность между доходами и расходами.
2) Чистая прибыль компании, т. е. доход за вычетом всех расходов, называется
нижней чертой или последним показателем в отчете о прибылях и убытках.
3) Отчет о движении денежных средств отражает источники поступления
денежных средств и направления их расходования. Это помогает менеджерам понять,
почему прибыльное предприятие может испытывать нехватку наличности.
4) Овердрафт - форма краткосрочного кредита, процентная ставка по нему
подлежит согласованию.
5) При предоставлении кредита кредитор обычно требует обеспечения его займа
SECTION 4 BANKRUPTCIES
LEAD-IN
Unsuccessful companies may collapse, go out of business, or go bankrupt.
Bankruptcy is a legally declared inability or impairment of ability of an individual or
organization to pay their creditors. Creditors may file bankruptcy for a debtor in an effort to recoup
a portion of what they are owed. In the majority of cases, bankruptcy is initiated by the debtor.
The primary purpose of bankruptcy is to give an honest debtor a "fresh start" in life by
relieving the debtor of most debts, and to repay creditors in an orderly manner to the extent that the
debtor has the means available for payment.
In the United Kingdom, bankruptcy (in a strict legal sense) relates only to individuals and
partnerships. Companies and other corporations enter into differently-named legal insolvency
procedures: liquidation, administration (administration order and administrative receivership).
When a company or partnership gets into financial trouble an administrator or
administrative receiver may be appointed.
An administrator's primary goal is to rescue the company as a going concern. If this isn't
possible, the administrator will try to get a better result for the creditors than would be possible if
the company was wound up.
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If neither of these is possible, the administrator will sell the company's property to make at
least a partial payment to one or more secured or preferential creditors, such as employees or the
bank.
An administrative receiver is an insolvency practitioner who has control of the
whole, or a substantial part, of the company's property and wide powers over the business.
The administrative receiver is mainly concerned with getting back the money owed to the
secured creditor. The administrative receiver may sell the assets piecemeal, or sell the whole
business as a going concern to pay off the secured creditor, and the costs of the receivership.
If a company cannot be rescued, it is wound up, with the receivers or administrators selling
what they can to pay off the debts. A company in this situation goes into liquidation and is then in
liquidation. The receivers or administrators are in this case liquidators of the company.
A company unable to pay its debts is insolvent.
An insolvent company that does not continue in some form ceases trading.
More informal expressions for going out of business include crash, fold, go bust, go
under, and go to the wall.
When a lot of businesses in an industry go bust at the same time, commentators talk about
a shake-out eliminating these weaker companies.
Sometimes the image of corporate wreckage is used; the state of the company is likened to
a car or plane after a serious accident. Commentators talk about trying to salvage something from
the wreck or wreckage in the same way that shipwrecks are salvaged for anything of value that
remains.
Companies in financial difficulty are often described as sick, or ailing, a word used more
in this context than to describe people who are ill.
Companies in trouble and needing outside help are also often referred to as lame ducks,
likening them to birds with difficulty in walking.
Sometimes company doctors, people who specialize in this area, are brought in to turn
round companies in difficulty and make them successful again. If they succeed in difficult
circumstances, the resulting turnround or turnaround is often described as dramatic or remarkable.
VOCABULARY
go bankrupt/ collapse/ go out of
business -обанкротиться
crash/ fold/ go bust/ go under/ go
to the wall
bankruptcy - банкротство, несостоятельность
file for bankruptcy - заявлять о несостоятельности
insolvency -неплатежеспособность: неспособность выполнять
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денежные обязательства; в случаях отдельных
индивидуумов это может привести к банкротству, а в
случае компаний - к ликвидации; несостоятельность
insolvent - неплатежеспособный; несостоятельный
liquidation - ликвидация: официальное закрытие компании,
winding-up удовлетворение требований кредиторов и распределение
оставшихся активов между акционерами
go into liquidation - ликвидироваться; прекратить деятельность в связи с
банкротством
company in liquidation - ликвидируемая компания
liquidator - ликвидатор: лицо, уполномоченное осуществить
официальное прекращение деятельности компании
administration in bankruptcy - управление конкурсной массой, конкурсное управление:
организация продажи имущества должника посредством
проведения аукционов или публичных торгов
administration order - решение [постановление, приказ] о конкурсном
управлении: приказ суда, согласно которому указанному
лицу поручается осуществлять управление делами
неплатежеспособного физического или юридического лица
administrative receivership - конкурсное управление; управление конкурсной массой:
процесс, в ходе которого назначенное судом лицо
осуществляет управление активами неплатежеспособного
должника
administrator - администратор: лицо, назначенное судом для
выправления дел компании на грани банкротства
administrative receiver - конкурсный управляющий, управляющий конкурсной
массой
cease trading - прекратить деятельность компании
shake-out - «встряска»: существенное изменение в рыночных
условиях (напр., возникновение избытка предложения,
рецессия), в результате которого наиболее слабые
участники рынка (спекулянты или торгующие в кредит)
разоряются или несут потери
wreckage, wreck - крушение; гибель; катастрофа; авария; крах
salvage - спасать имущество
sick, ailing - ( о компании, об экономике) испытывающий серьёзные
(финансовые) трудности (проблемы)
lame duck - "хромая утка" : компания в тяжелом (финансовом)
положении; (полит. ам.): государственный деятель или
крупный чиновник, чье влияние сведено к нулю в связи с
предстоящим уходом с занимаемого поста в результате
поражения на выборах или отставки
company doctor - специалист, консультант который вводится в правление
turnaround manager компании для вывода компании из кризисной ситуации;
антикризисный управляющий
turn around - полностью изменить; изменить к лучшему; улучшить,
turn round исправить
turnaround - благоприятный поворот (рыночной конъюнктуры,
turnround экономики в целом или дел компании (напр., поворот от
убытков к прибыли); «разворот» компании: вывод
компании из кризиса путем реструктуризации, сокращения
расходов, выбора новой стратегии развития
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COMPREHENSION QUESTIONS:
1) What is bankruptcy? What is its purpose?
2) What insolvency procedures do companies go through?
3) What is an administrator’s primary goal?
4) What is an administrative receiver mainly concerned with?
5) What happens to a company when it cannot be rescued?
6) What expressions are used when we talk about companies going out of business?
7) What words are used when we describe companies in financial difficulty?
8) What situation is called turnaround?
VOCABULARY PRACTICE
Like a battlefield surgeon the turnaround manager must decide where to spend time. Will
this company fail no matter what the manager does? Even if survival is a possibility will the
investment of time and resources exceed the value to be created?
Once the manager is committed to the turnaround, the first step is to stop the negative cash
flow. This will require some quick and decisive management action to stabilize the organization and
deal with poor employee morale and to increase the margins and reduce the overhead costs. In
these crisis situations, the successful turnaround manager must focus on short-term action plans to
make the business healthy.
Administrators found that an immediate liquidation of Polly Peck would have produced a
deficit for shareholders of $384 million.
In the US, a trustee is like a British receiver, except that he is there to get the company
going again, not to wind it up.
Airlines throughout the globe are losing money heavily and many are facing bankruptcy,
takeovers and collapse.
As Japan's 'bubble’ economy bursts, so thousands of companies are collapsing with it.
Some 5,600
companies went bankrupt during the first seven months of this year.
Instead of allowing them to collapse, triggering a chain reaction - remember one small
company going under can bring down up to a dozen in its wake - the government should extend a
lifeline.
The banks had no alternative. If they had pulled the plug, Canary Wharf would have gone
into liquidation and been sold off to the highest bidder and they would all have lost millions.
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TEXTS TO TRANSLATE:
64. Bankruptcies reach another record
The number of people going bankrupt in England and Wales has hit another record
high during the first three months of 2005, official figures show.
The Department of Trade and Industry said the number of individual bankruptcies reached
10,091.
The number of bankruptcies was 24.5% higher than a year ago and up 2.8% on the
previous quarter.
Worries about debt levels have been growing and accountants KPMG said a "black cloud
of debt" hung over the UK.
Struggle
Company liquidations fell 1.3% on the previous quarter to 2,900 the DTI figures showed, a
drop of 7.4% on the previous year.
Total individual insolvencies reached 13,229 in England and Wales during the first quarter.
Of these, 3,139 were Individual Voluntary Arrangements (IVAs) - an alternative to
bankruptcy which allows debtors to come to an agreement with their creditors. The number of IVAs
was up 40.1% on the same period in 2004, but down 2.1% on the previous quarter.
The level of consumer debt broke through the £1 trillion level last year, and there are
growing worries at the number of people who are getting into major difficulties with their finances.
Accountancy firm KPMG said that the latest figures meant 37,886 people have been made
bankrupt in the year to 31 March, a 30% increase on the previous 12 months.
"These figures... do prompt the question of where this is all going to end," said Steve
Treharne, head of personal insolvency at accountancy firm KPMG.
"It is interesting that these statistics are released just over a week after official government
figures reveal there has been a 35% increase in mortgage possession actions on the same period last
year.
"If the current trend continues, we could see annual rates of 60,000 bankruptcies within the
next three years."
Bankruptcy 'more attractive'
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The five interest rate rises since late 2003 have been cited as one reason for the surge in the
number of bankruptcy cases.
And some experts have also argued that recent changes to bankruptcy laws have made
people more willing to choose bankruptcy as a way of sorting out their finances.
Under the Enterprise Act 2002, since April 2004 bankrupts in England and Wales have
been able to come out of bankruptcy faster than previously.
KPMG said that more than three quarters of bankruptcy cases came from people declaring
themselves bankrupt rather then being forced into it, a move it said was down to the changes in the
law.
"In many people's eyes, this Act made bankruptcy a far simpler and more attractive
proposition and removed some of the stiffer penalties previously meted out to bankrupts in the UK,"
Mr Treharne said.
However, Sue Edwards, senior social policy adviser at Citizens Advice, said easy access to
credit was to blame for the rise, rather than changes in the law.
"People are borrowing too much, and lenders are making poor lending decisions," she said.
VOCABULARY:
individual voluntary arrangement –( IVA) - индивидуальное добровольное
соглашение: договор, который заключает неплатежеспособное лицо со своими
кредиторами и по которому данное лицо обязуется в течение некоторого периода
времени (обычно 5 лет) выплачивать определенную сумму долга, а кредиторы
соглашаются не предпринимать каких-л. действий по аресту его имущества, доходов
и т. п.
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The news has prompted investors concern that the banking sector could suffer from
stagnant revenue and rising bad debts.
Debt concerns
In May, rival bank Barclays warned bad-debt provisions were rising ahead of forecasts as a
result of rising credit card debts.
Lloyds said it had made greater provision to cover consumer bad debts, along with its
rivals, but lower company debts would offset this.
"We are continuing to make progress against our objective to deliver sustained earnings
growth, despite signs of a slowing consumer environment in the UK," said chief executive Eric
Daniels.
It added its decision to concentrate on existing customers would result in healthy levels of
lending and deposit growth.
In March, the UK's biggest bank posted a 20% fall in full year pre-tax profits from the
previous year - although 2004's figure had been boosted by the £1.2bn sale of various overseas
businesses.
Lloyds, which also owns the Cheltenham & Gloucester and Scottish Widows brands, has
around 15 million personal banking customers and operations in 27 countries across the globe.
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laws have been beefed up, too. Between 1989 and 1996, just three firms went bust. Since the
currency crash, thousands have gone to the wall.
Others have been restructured over the past two years by the state "hospital bank",
Konsolidacni Banka. Helped by western advisers, it has slimmed many state-owned firms and split
them into sellable bits. Parts of Skoda Pizen, a troubled engineering group, were sold to western
firms last year, while Germany's Siemens has been eyeing CKD, a tram-maker. Even Zetor, which
makes tractors, looks likely to be sold soon. A symbol of communist pride, it returned to operating
profit after being forced to build tractors only when it had received firm orders. These firms are
recovering mainly because lack of cash forced them to restructure.
Mr Gregr's scheme may now hand them money and reverse that process. Many Czech
companies are dead on their feet. He aims to get them walking. This is not his first attempt: he
launched a similar scheme in 1999 to rescue more than 30 big, sickly firms. Lack of cash and
protests from the European Commission meant that plan was watered down, and eventually covered
just eight firms. A couple have since been sold, but most still languish in state hands. The betting in
Prague is that these are the companies that Mr Gregr now wants to throw more money at, along
with another 30 or so that long ago ceased paying their debts.
In fact, companies with potential do not need Mr Gregr's plan. Money is less of a problem
than it was, because foreign investment has started flooding into the country. Until the currency
collapse, the Czechs generally scorned foreign investment, preferring to keep big companies in
local hands. Since then, a package of investment incentives and some big privatisations have
brought foreign cash rolling in. Big investors include television makers such as Japan's Matsushita,
Philips, a Dutch electrical group, and car-parts makers such as Germany's Bosch. These have been
drawn to the Czech Republic by its clever, cheap workers and its proximity to the EU. Some $4.5
billion, or nearly 10% of GDP, flowed in last year. Another $8 billion will arrive if the government
succeeds in selling a 64% stake in CEZ, the main electricity generator (though the process was held
up this week by the threat of lawsuits from spurned financial advisers).
This foreign money is turning industry round. Foreign-owned firms now account for nearly
half of Czech exports, and were responsible for almost all of the 17% surge in exports last year.
And although total industrial production went up by a more modest 5%, it exploded in industries
with heavy foreign investment: transport production went up by 45%, for example, fuelled by the
half-million cars built by Volkswagen-owned Skoda (no relation of Skoda Pizen).
Yet Mr Gregr wants to resuscitate the very bits of Czech industry that foreigners are
avoiding. Why bother? He claims that "the market on its own cannot resolve the situation." With the
budget deficit running at 9% of GDP, though, he may yet be refused the cash to turn his grandiose
vision into reality. Perhaps he will be forced to let the market do its work after all.
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VOCABULARY:
flagging economy – экономика, находящаяся в неблагополучном состоянии, темпы
роста которой снижаются
242
A key element of the package -which has the full backing of the coalition government -
was the rationalisation of three loss-making state-owned banks under a single supervisory board.
Mr Derviş announced that Ziraat, Halk and Emlak banks -the three main state-owned
banks - would be restructured to operate "on the basis of market rules and profitability". This would
include the merger of Emlak with Ziraat, branch closures and staff cuts.
The government would issue "marketable domestic debt instruments" to the equivalent of
$16bn to help cover losses of more than $20bn accumulated by the three banks. The restructuring
will be overseen by a common board of directors staffed by independent bankers.
Other measures included legislation to make the central bank fully independent and aid
liquidation of insolvent banks. There were also moves to sell off 51 per cent of Turk Telecom and
accelerate privatisation of Turkish Airlines, as well as the alcohol, tobacco and sugar monopolies.
Ankara also filled the important posts of treasury chief and head of the banking watchdog
by respectively appointing Engin Akcakoca and Faik Oztrak, both respected technocrats.
VOCABULARY:
abandon a pegged exchange rate – отказаться от привязки национальной валюты к
доллару
VOCABULARY CHECK
1) Компания, неспособная платить по своим долговым обязательствам, является
неплатежеспособной.
2) В Великобритании неплатежеспособность отдельных индивидуумов может
привести к банкротству, а в случае несостоятельности компаний - к ликвидации.
3) Когда компания испытывает финансовые трудности, для выправления дел
судом может быть назначен администратор или конкурсный управляющий.
4) Если невозможно сохранить компанию как функционирующее предприятие,
администратор продаст собственность компании, чтобы хотя бы частично выполнить
обязательства перед основными кредиторами.
5) Компании, которые испытывают финансовые проблемы, часто называют
«хромыми утками».
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6) Антикризисные управляющие помогают компании выйти из кризиса. Если им
это удается, то речь идет о серьёзном благоприятном повороте положения компании.
CASE STUDY:
Europe's Enron
The Ahold financial scandal should shock Europe into accounting and corporate
Royal Ahold as "Europe's Enron" - but in many ways it is true enough. Certainly,
the world's third-biggest food retailer, after Wal-Mart and Carrefour, presents none of
the financial risks of Enron, which was both deeply in debt and the world's largest
electricity giant. That apart, the similarities between the former Texan powerhouse
and the Dutch retailer are striking, from the very bad corporate governance,
US problem that cannot occur in the old continent. Instead, they should fix their own
On 24 February 2003 Ahold announced the resignation of its chief executive and
finance director after finding that it had overstated its profits by more than 463m
($500m). Its market value plunged by 63 per cent that day, to 33bn. In late 2001, it
exceeded 30bn. Ahold is now under investigation by various authorities, including the
Rather like Kenneth Lay at Enron, and Dennis Kozlowski at Tyco, another scandal-
hit US firm, Ahold's now-departing boss, Cees van der Hoeven, won a huge reputation
from turning a dull company into a growth machine. Investors applauded long after they
should have started asking hard questions. When eventually they did ask them, his anger
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The 463m overstatement is due primarily to Ahold's US Foodservice unit, which
supplies food to schools, hospitals and restaurants, although there are also issues over
its Disco subsidiary in Argentina and several other units. This has led some observers to
say that this is less a European problem than yet another US accounting failure. Such a
claim absolves Ahold's bosses of responsibility for their acquisitions and dishonesty and
ignores the persistent, firm-wide tendency to test the limits of acceptable accounting.
Most firms that buy in bulk - including such admired retailers as Wal-Mart and
Tesco - get discounts from suppliers if they meet sales targets. The issue is how those
rebates are accounted for. The accepted practice is to wait until the targets are met.
Failing firms, such as now-bankrupt Kmart, food distributor Fleming, and now Ahold
appear to have booked these rebate payments before they were earned.
What of Ahold's auditor? Although the problems were uncovered, it should have
done so much earlier, says Lynn Turner, a former chief accountant at the SEC.
VOCABULARY:
bad corporate governance – неэффективное корпоративное управление
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VOCABULARY REVISION – UNIT 6
Текущие оборотные активы; основной капитал; балансовая стоимость; долгосрочные
обязательства; бухгалтерский учет; балансовый отчет; собственный (акционерный) капитал
компании; бухгалтерское уравнение; условная стоимость репутации и деловых связей
фирмы; материальные активы; амортизационные отчисления; функционирующее
предприятие; пассивы, обязательства; внебалансовые счета; резервы для покрытия
безнадежных долгов; списать долги; сообщать о результатах деятельности; финансовый
результат хозяйственной деятельности компании (суть дела, итог); финансовый отчет; отчет
о прибылях и убытках; годовой отчет; прибыль до налогообложения; убытки до вычета
налогов; балансовый отчет, свидетельствующий о нестабильном финансовом положении
компании; приукрашивание; бухгалтер; банкротство; разорение мелких инвесторов;
обанкротиться; подавать петицию о банкротстве; компания, находящаяся в тяжелом
финансовом положении; финансовый консультант, которого вводят в правление компании
для спасения ее от банкротства; благоприятный поворот дел компании; менеджер,
специализирующийся на выводе компаний из кризиса; неплатежеспособность; решение о
назначении администратора; прекратить деятельность компании; управление конкурсной
массой; судебный исполнитель, управляющий конкурсной массой; ликвидация; ликвидатор
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Part 1
Unit 7
MANAGEMENT
AND LABOUR
RELATIONS
247
UNIT 7
MANAGEMENT AND LABOUR RELATIONS
VOCABULARY
Board of Directors - совет директоров
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Chief Executive Officer - (главный) исполнительный директор (один из
(CEO)(AmE) руководителей корпорации, отвечающий за основную часть
Managing Director (BrE) ее текущей деятельности); генеральный директор
(корпорации), директор-распорядитель (фирмы)
chief operating officer (COO) - главный операционный директор: руководитель
корпорации, отвечающий за повседневные операции, за
текущую деятельность
chief financial officer (CFO) - главный финансовый директор; руководитель корпорации,
отвечающий за финансовые вопросы: вице-президент,
казначей
vice president (VP) - вице-президент, заместитель президента
manager - менеджер, управляющий, руководитель, директор,
заведующий: лицо, осуществляющее руководство людьми,
управление процессами, распоряжение имуществом и т. п.
executive - администратор, руководитель, руководящий работник:
осуществляет управление организацией в соответствии с
решениями, принятыми на более высоком уровне (напр.,
советом директоров)
senior manager - старший менеджер, старший управляющий
company officer
middle manager - управляющий среднего звена
front-line manager - руководитель линейного подразделения
line manager
payroll - платежная ведомость, ведомость заработной платы:
учетный документ, который представляет собой список
работников с указанием начисленной им заработной платы
employees, personnel, staff, - персонал, кадры, штат, кадровый состав
workers, workforce
white-collar workers - "белые воротнички": работники, не занятые физическим
трудом; включает служащих, в т. ч. клерков и секретарей,
инженерно-технический персонал, управляющих,
специалистов и др.
blue-collar workers - "синий воротничок", производственный рабочий: класс
работников, занятых непосредственным производством
товаров, по преимуществу физическим трудом, не
требующим умственных усилий, а также высокой
квалификации
entrepreneur - предприниматель: человек, который создает, финансирует
и управляет коммерческой или промышленной
организацией, ожидая получить прибыль
start-up - новая фирма, новое предприятие, предприятие (фирма) в
начальной стадии развития; особенно часто в настоящее
время новая "интернет-компания"
tycoon, magnate, mogul промышленный или финансовый магнат
COMPREHENSION QUESTIONS:
1) What kind of structure do most organizations have?
2) What is the Board of Directors responsible for?
3) Who is responsible for the day-to-day running of the company?
4) What do senior managers do?
249
5) What is the role of the middle managers and line managers?
6) What kind of work do white-collar and blue-collar workers perform?
7) Who is entrepreneur?
8) What do we sometimes call rich and successful people with power and influence
running big companies?
VOCABULARY PRACTICE
Apple today announced that Dr. Eric Schmidt, chief executive officer of Google, was
elected to Apple’s board of directors at their meeting today. Eric also sits on Google’s board of
directors and Princeton University’s board of trustees.
Despite their differences, great managers share one common trait: they do not hesitate to
break virtually every rule held sacred by conventional wisdom. They do not believe that, with
enough training, a person can achieve anything he sets his mind to.
The term 'payroll' encompasses every employee of a company who receives a regular wage
or other compensation. Some employees may be paid a steady salary while others are paid for
hours worked or the number of items produced. All of these different payment methods are
calculated by a payroll specialist and the appropriate paychecks are issued.
With the movement of many Western nations towards service based economy, the blue-
collar workforce has steadily decreased in size. At the same time skilled blue-collar workers,
mainly trade jobs working in the building industry, have seen rapidly rising wages.
Taikichiri Mori, 88, a property tycoon, overcame falling property prices to remain the
world’s richest individual with a fortune of $13 billion.
He is the person employees see every day. The front-line manager is the most important
two-way communicator in any business. He is not only the mouthpiece by which company messages
are communicated downwards, but the means by which messages are communicated upwards.
TEXTS TO TRANSLATE:
68. Tough at the top
The jobs of big-company bosses have become more difficult and less glamorous, and
their image has taken a terrible pasting
CORPORATE leaders are having a rotten time. Accounting scandals, lavish pay increases
and collapsing stockmarkets have conspired to turn the world against them. They are regarded with
cynicism and mistrust everywhere. In America, the bosses of big companies command only slightly
more respect in public-opinion polls than used-car salesmen. Rebuilding lost trust will be slow
work.
250
At the same time, leaders of large companies are increasingly in the public gaze. A
company's boss is now expected to take personal responsibility for its fortunes as never before. This
is reflected not just in new corporate-governance rules, but also in the way that financial markets
scrutinise the appointment of a new corporate boss and that companies feel they have to defend
executive pay packages.
Yet the task of a corporate leader has never been more demanding. This is partly because
of changing corporate structures. Big companies often operate in many countries or product
markets, and joint ventures, outsourcing and alliances add further complexity. Layers of middle
management have gone, so that more divisions report directly to the person at the top. The pace of
innovation is quicker, new technologies have to be applied faster and product life-cycles have
become shorter.
Corporate leaders are struggling to keep up momentum in their businesses when economic
activity is sluggish. They also need time to spend with the people they lead: for more and more
businesses, the abilities of a relatively small number of people are thought to be the key to success,
and retaining and developing their talents is vital. Swamped with e-mails (which some of them
answer themselves), voicemails and demands for appearances on breakfast television and at grand
dinners, many corporate leaders find it harder and harder to make time to think.
In addition, for anyone in charge of a large quoted company, the level of outside
scrutiny—whether by government, consumer groups, the press or the financial markets—is far
beyond anything a corporate leader would have been subjected to in the past. For many bosses, this
sense of managing in a goldfish bowl has become particularly onerous. The chairman of two large
publicly traded British companies says in exasperation: “I spend my life advising friends of mine
not to become chief executives of quoted companies, and by and large they take my advice.” Many
look longingly at the more secluded world of private equity.
Whatever the reason, people have come to expect more from corporate leaders. Profiles
and interviews published in the business press ensure that the more telegenic or talkative business
folk are as well known as minor Hollywood celebrities. In the heady stockmarkets of the late 1990s,
some chief executives acquired heroic status, and not always reluctantly. As Rakesh Khurana at
Harvard Business School points out in a book debunking the cult of the charismatic boss, in 1981
only one cover of Business Week featured a chief executive from a Fortune 1,000 firm, but in 2000,
when the markets peaked, the number rose to 18. These days, a company's performance and, more
alarmingly, its share price, are often seen as largely determined by its CEO.
Financial markets continue to harbour exaggerated expectations. “The pressure people are
feeling at the top of organisations is unbelievable,” says John Kotter, also at Harvard Business
School. If earnings growth drops 3%, he says, the share price may fall by 30%. Yet earnings are
251
unlikely to grow faster than GDP for more than short periods, and GDP is likely to remain sluggish
in most countries for several years to come. Moreover, most companies jog along at much the same
pace as the rest of their industry most of the time. A recent study by Nitin Nohria of Harvard
Business School and a group of colleagues found that fewer than 5% of publicly traded companies
maintained a total return to shareholders greater than did their industry peers for more than ten
years. To expect bosses consistently to deliver double-digit growth is to ask the impossible.
This gap between expectations and reality has helped to sweep corporate heroes from their
pedestals, especially in America, where the cult of the business leader went to the most ludicrous
lengths. A poll in July last year found that only 23% of Americans thought the bosses of large
corporations could be trusted, even fewer than the 38% who (unwisely) trusted journalists. The
same poll found, though, that 51% of respondents trusted accountants (whose failings contributed to
several corporate scandals), and a remarkable 75% trusted people who run small businesses.
In response, a raft of new measures has been launched to improve corporate governance.
Many governments, and some international bodies such as the Paris-based OECD, have been
drawing up new codes of conduct. Most of these aim to ensure that boards of directors keep a closer
eye on the behaviour and competence of corporate leaders. The effect has generally been to increase
the professionalism of corporate boards, and to make them take their duties more seriously.
Companies now pay more attention to internal controls and guard their reputation more jealously.
The number of ethics courses taught in business schools has increased markedly. But few people
believe that this will bring a big reduction in fraud, the cause of the worst recent scandals; and
hardly anyone thinks that it will make companies expand faster or invest more wisely.
VOCABULARY:
corporate governance - корпоративное управление: распределение властных
полномочий в корпорации, прежде всего — между менеджерами и акционерами
252
NEW YORK - Members of America's professional and managerial classes have always
left college confident of at least one thing: they had taken their last test. From here on, they could
rely on charm, cunning and/or a record of accomplishment to propel them up the corporate ladder.
But that's not necessarily true any longer. A growing number of companies, from General
Motors Corp to American Express Co., are no longer satisfied with traditional job interviews.
Instead, they are requiring applicants for many white-collar jobs - from top executives down - to
submit to a series of paper-and-pencil tests, role-playing exercises, simulated decision-making
exercises and brainteasers. Others put candidates through a long series of interviews by
psychologists or trained interviewers.
The tests are not about mathematics or grammar, nor about any of the basic technical skills
for which many production, sales and clerical workers have long been tested. Rather, employers
want to evaluate candidates on intangible qualities: Is she creative and entrepreneurial? Can he lead
and coach? Is he flexible and capable of learning? Does she have passion and a sense of urgency?
How will he function under pressure? Most important, will the potential recruit fit the corporate
culture?
These tests, which can take from an hour to two days, are all part of a broader trend.
'Companies are getting much more careful about hiring,' said Paul R. Ray Jr., chairman of the
Association of Executive Search Consultants.
Ten years ago, candidates could win a top job with the right look and the right answers to
questions such as 'Why do you want this job?'. Now, many are having to face questions and
exercises intended to learn how they get things done.
They may, for example, have to describe in great detail not one career accomplishment but
many - so that patterns 35 of behavior emerge. They may face questions such as 'Who is the best
manager you ever worked for and why?' or 'What is your best friend like?'. The answers,
psychologists say, reveal much about a candidate's management style and about himself or herself.
The reason for the interrogations is clear: many hires work out badly. About 35 percent of
recently hired senior executives are judged failures, according to the Center for Creative Leadership
in Greensboro, North Carolina, which surveyed nearly 500 chief executives.
The cost of bringing the wrong person on board is sometimes huge. Searching and training
can cost from $5000 for a lower-level manager to $250,000 for a top executive. Years of corporate
downsizing, a trend that has slashed layers of management, has also increased the 50 potential
damage that one bad executive can do. With the pace of change accelerating in markets and
technology, companies want to know how an executive will perform, not just how he or she has
performed.
253
'Years ago, employers looked for experience - has a candidate done this before?' said
Harold P. Weinstein, executive vice-president of Caliper, a personnel testing and consulting firm in
Princeton, New Jersey. 'But having experience in a job does not guarantee that you can do it in a
different environment.'
At this point, most companies have not shifted to this practice. Some do not see the need or
remain unconvinced that such testing is worth the cost. But human-resource specialists say
anecdotal evidence suggests that white-collar testing is growing in popularity. What has brought so
many employers around to testing is a sense of the limitations in the usual job interview. With so
little information on which to base a decision, 'most people hire people they like, rather than the
most competent person,' said Orv Owens, a psychologist in Snohomish, Washington, who sizes up
executive candidates. Research has shown, he said, that 'most decision makers make their hiring
decisions in the first five minutes of an interview and spend the rest of the time rationalizing their
choice.'
Besides, with advice on how to land a better job about as common as a ten-dollar bill,
many people are learning to play the interview game.
Even companies that have not started extensive testing have toughened their hiring
practices. Many now do background checks, for example, looking for signs of drug use, violence or
sexual harassment. But the more comprehensive testing aims to measure skills in communications,
analysis and organization, attention to detail and management style; personality traits and
motivations that behavioral scientists say predict performance.
VOCABULARY:
corporate ladder - карьерная (служебная) лестница
VOCABULARY CHECK
1) Большинство организаций имеют иерархическую структуру. Возглавляет
компанию, как правило, человек или группа лиц, которым подчиняется увеличивающееся на
каждом последующем уровне пирамиды количество служащих.
2) Президент компании стоит во главе Совета Директоров.
3) Главный операционный директор - руководитель корпорации, отвечающий за
повседневные операции.
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4) Главный исполнительный директор - руководитель корпорации, отвечающий
за основную часть ее текущей деятельности.
5) Старшие менеджеры возглавляют различные отделы внутри компании.
6) Платежная ведомость представляет собой список всех работников компании с
указанием заработной платы.
SECTION 2 HUMAN RESOURCES,
HEADHUNTING AND DOWNSIZING
LEAD-IN
A company’s activities may be spread over different sites.
A company’s most senior managers usually work in its head office or headquarters (HQ).
In larger organizations there is a human resources department (HRD) that deals with pay,
recruitment, finding and training job applicants, as well as administering employee-benefit
programs. This area is called human resources (HR) or human resource management (HRM).
Another name for this department is the personnel department.
As companies reorganize to gain competitive edge, human resources plays a key role in
helping companies deal with a fast-changing competitive environment and the greater demand for
quality employees.
Personnel departments are usually involved in finding new staff and recruiting them,
hiring them, or taking them on, in a process of recruitment. Someone recruited is a recruit, or a
hire (Am.E). The company employs or hires them; they join the company. A company may recruit
employees directly or use outside recruiters, recruitment agencies or employment agencies.
Outside specialists called headhunters may be called on to headhunt people for very important
jobs, persuading them to leave the organizations they already work for. This process is called
headhunting.
Many people work for the same organization until they reach retirement: the age at which
people retire, or end their working life. Career paths are thus clear: you can work your way up the
career ladder, getting promotion to jobs that are more senior, with greater responsibility. You are
unlikely to be demoted: moved to a less senior job.
To leave the company, you may resign or hand in your notice.
However, over the past years the changing business environment, not least highly
competitive global product markets, an increasingly rapid pace of technological change, a changing
social environment are driving the demand for a flexible labour market. People are forced to move
to different jobs when necessary which means job insecurity for many employees, the feeling that
they may not be in their job for long.
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In order to make an organization more efficient companies have to cut costs. They
downsize, or reduce the numbers of people they employ. Businesses use several techniques in
downsizing, including providing incentives to take early retirement and transfer to subsidiary
companies, but the most common technique is to simply terminate the employment of a certain
number of people.
Rightsizing is downsizing in the belief that an enterprise really should operate with fewer
people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect.
Delayering is the process of eliminating layers of middle management
Organizations say that they are eliminating middle levels of their hierarchies so as to
empower ordinary workers and employees. This process of empowerment is designed to give them
the authority to make decisions that were previously taken by middle managers.
As a result of this restructuring the company becomes flatter (with fewer layers of
management) and leaner (with fewer, more productive employees).
Employees who are made redundant may get advice about finding another job, retraining,
etc. This is called outplacement advice.
VOCABULARY
site - местоположение, местонахождение
head office - штаб-квартира; главный офис; главное управление, центр
headquarters (HQ) (какой-л организации)
human resources department - отдел кадров
(HRD)
personnel department
human resources (HR) - персонал; трудовые ресурсы
human resource - управление трудовыми ресурсами: направление
management (HRM) менеджмента, базовой идеей которого является повышение
производительности посредством создания благоприятных
условий для деятельности сотрудников организации
recruit - нанимать ( людей на работу)
hire
take on
recruitment - набор, подбор, наем персонала; рекрутмент
recruit - новичок, новый работник (сотрудник)
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hire
recruiters, - специалист по подбору персонала, рекрутер
recruitment agency - фирма, осуществляющие подбор специалистов по заданным
employment agency работодателем критериям
headhunter - "охотник за головами": специалист или фирма,
занимающиеся поиском работников на руководящие
должности неформальными методами; рекрутская фирма
headhunting. - охота за “головами”, за “мозгами”, переманивание
высококлассных специалистов при помощи тщательно
разработанной системы льгот
retirement - выход в отставку; уход на пенсию
career ladder - карьерная (служебная) лестница; лестница продвижения по
службе
promotion - продвижение по службе
demote - понижать в должности, в звании
resign - уходить [подавать] в отставку, оставлять пост
quit
notice - предупреждение [уведомление] о расторжении контракта
flexible labour market - гибкий рынок труда
job insecurity - неуверенность в завтрашнем дне
downsize - сокращать (штат), уменьшать (размеры компании)
downsizing - уменьшение числа сотрудников предприятия с целью
delayering повышения результативности деятельности
incentive - поощрение, стимул, побуждение, побудительный мотив
rightsizing - оптимизация размера ( организации )
dumbsizing - необдуманное сокращение штата; ‘сокрушение штата’
empower - доверять, уполномочивать, давать права и возможности
empowerment - “делегирование” полномочий, передача обязанностей
менеджеров среднего звена рабочим и служащим
restructuring - реструктуризация, перестройка структуры
lean and flat organization - эффективно функционирующая организация с упрощенной
(“плоской”) структурой управления
fire, dismiss, sack, terminate - увольнять
lay off увольнять (как правило, временно); сокращать
make smb redundant
outplacement - увольнение по сокращению штатов (предполагает также
попытку фирмы трудоустроить увольняемого на новом месте)
COMPREHENSION QUESTIONS:
1) What is the role of the HRD?
2) What are the ways of recruiting employees?
3) Why are outside recruiters called headhunters?
4) Why is a labour market much more demanding now than it used to be?
5) Why do organizations eliminate middle levels of their hierarchies?
6) When do employees get outplacement advice?
257
VOCABULARY PRACTICE
Contrary to popular myths, downsizing does not necessarily make companies more
profitable, more productive, or even smaller.
A flat organisation, with a small number of management levels, should give more
opportunity for decision-making at all levels.
Empower your people. Don't command and control. Let them use their own initiative and
entrepreneurial spirit.
TEXTS TO TRANSLATE:
70. The Truth About Work
The gap between rhetoric and reality never seems to grow any narrower when it comes to
the public discussion of employment. Politicians and journalists, recruitment agencies and
management consultants continue to make the flesh creep with talk of the end of the permanent job
for life, the arrival of flexible labour markets and the emphasis on employability in a world of
regular job changes.
An impression is given of a rapid, irreversible transformation of the supposed world of
stable, long-tenured employment that dominated the industrialized economies for the first three
decades after the second world war. However, much of this received wisdom is wrong. A research
paper from the International Labour Organization provides evidence to demonstrate this.
The research shows that the average length of job tenure hardly changed during the 1990s.
In fact it rose slightly to 10,5 years. As the ILO report states: 'In contradiction to an assumed radical
change in the labour markets towards less stability and more numerical flexibility, the
investigation of job tenure does not, in fact, show any universal trend towards increased labour
market instability among the major industrialized countries. ... While certain sub-groups of the
population, such as those with less education, experienced less job security than in the past, for the
258
most part these analyses indicate there was no systematic change in the duration of jobs over time,'
concludes the ILO.
What differences exist in job tenure between countries seems to have less to do with
technological change or globalization and more to do with the ups and downs of the business
cycle. 'Research shows that flows both in and out of employment tend to be countercyclical, so
average job tenure is declining in upswings and increasing in downturns,' notes the ILO. 'The
decline in job tenure observed, in recent years may mainly reflect the economic recovery that
has taken place in some countries, rather than a structural shift towards increased job
instability.'
Shorter job tenures can be found among university graduates, while those with the longest
time in a job have a medium level of educational qualifications. People working in larger
companies are more likely to stay with their employer for a long time. Downsizing tends to
hit junior workers most, not the ageing core.
The report found that job retention rates stayed remarkably stable, at least after the early
1980s. But the figures mask a tendency for younger and older workers to have lower retention rates
compared with those of prime age.
But this is not the end of the matter. The report tries to find out why so many people
believe they are living through a period of exceptional job instability. The ILO acknowledges that
between 1985 and 1998 we experienced a significant net increase in the amount of temporary work
(fixed-term contracts and temporary agency employment). But the existence of a temporary work
contract is not necessarily a sign of instability. Fixed-term contracts are an important gateway into
long-term employment.
So what explains the view that we think we are living in an uncertain world of work? It
may be that an involuntary loss of work now covers the articulate, skilled white-collar elites - not
just blue-collar workers - and they make a bigger fuss about being made redundant.
VOCABULARY:
make the flesh creep – пугать; наводить ужас
job retention rates – процент остающихся на своих рабочих местах (по сравнению с
количеством увольнений)
260
Globalization should also keep service prices in check, just as it did when manufacturing
went offshore. Companies will be able to reduce overheads and improve efficiency. 'Our
comparative advantage may shift to other fields,' says economist Robert Lipsey, 'and if productivity
is high, then the US will maintain a high standard of living.' By encouraging economic development
in nations such as India, meanwhile, US companies will have expanded foreign markets for their
goods and services.
Outsourcing experts say the big job migration has only just begun. Frances Karamouzis,
research director at Gartner Inc., expects 40% of the USA's top 1,000 companies to have an over-
seas pilot project under way within two years. The really big offshore push won't be until 2010 or
so, she predicts. But if big layoffs result at home, corporations and the US government will face a
backlash. Some states are already pushing for legislation to stop public jobs from being transferred
overseas and now the unions are moving into the fight to keep jobs at home.
The truth is, the rise of the global knowledge industry is so recent that most economists
haven't begun to understand the implications. For developing nations, the big beneficiaries will be
those offering the speediest and cheapest telecom links, investor-friendly policies, and ample
college graduates. In the West, it's far less clear who will be the big winners and losers. But we'll
soon find out.
VOCABULARY:
outbid rivals – обойти конкурентов
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of many company directors is to wait in the hope that something—the shares, ideally—will turn up.
Far better to find a replacement, quickly, and pay the price.
An able chief executive has extraordinary power to make or break a company. Take the
way that Robert Ayling has turned Britain’s BA from ‘the world’s favourite airline’ into just
another troubled carrier. Or look at how Gil Amelio damaged Apple Computer and Edzard Reuter
wrecked Daimler-Benz. But the speed with which Apple’s resurrection followed the return of Steve
Jobs, or the vigour with which Jurgen Schrempp has restructured Daimler and Jean-Marie Messier
has transformed France’s Vivendi, all show the value of talent.
Exceptional skills required
Such influence reflects the demands of running a large firm these days. Backed by the
corporate bureaucracy, a chief executive might once have got by with good managers, cost-control,
and a beady eye on the accounts. Although such things still matter, a chief executive now has to
think for himself. He needs to be an innovator and an entrepreneur with a global vision. He needs
political skills, to steer a course through the regulatory maze. He needs to be a salesman and a
preacher to woo consumers, employees and investors. Which is why a firm with a good boss does
everything in its power to hang on to him – and why some of the most successful chief executives
spent years in the job. Yet, because the costs of failure are so high, it is also essential to get rid of an
underperforming boss. In the United States, more boards are doing their duty. Indeed, running a big
American firm or a Silicon Valley start-up is now riskier than being grand vizier in the court of the
Ottoman sultan. Boards in other parts of the world are too reluctant to pull the trigger.
A few firms go to the other extreme and become serial sackers; many others, even
American ones, seem stuck with a fossilised strategy and a familiar face. According to Rakesh
Khurana, of MIT's Sloan School of Management, most boards give the chief executive a
honeymoon of between two and three years. Then follow a couple of dangerous years. After that,
the longer you are chief executive, the less likely you are to be fired.
Where there is inaction, institutional investors bear part of the blame. Rather than step in
when performance flags, many prefer to sell the shares or sit back and wait for a free ride on the
activism of others. When investors act, as they do increasingly in America, they discover that
replacing the boss is a labour of behind-the-scenes negotiations.
Which is why sacking the boss ultimately comes down to the judgment of a firm's
directors. Yet boards find many excuses for doing nothing. The boss is near retirement; he is the
founder; he is the founder's son. It would look bad; it would be hard to find someone better; it
would show that the corporate strategy had been less brilliant than the board had told shareholders
at the previous annual meeting.
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How to change this? An essential is to structure the board so that it can scrutinise the chief
executive. That is best done when the roles of non-executive chairman and chief executive are
separate, so that rebellious directors have a leader. Non-executives should meet without the chief
executive, and make a regular evaluation of the boss's achievements.
Directors will do this better if they have a stake in the firm. Many companies have grasped
the need to align the interests of chief executive and shareholders, with shares or (less good) share
options; far fewer have seen the need to align the interests of directors and shareholders in the same
way.
Many mediocre chief executives owe their jobs to bad boards. The longer a chief
executive has been in the job, the more likely he is to have appointed the executive directors and
brought in his chums as "independent" non-executives. When the chief executive's tennis coach and
golf partner have to decide his future, they are unlikely to vote for execution—a reason for ensuring
that non-executives are truly professional, and value their reputation for independence above their
board fees.
When it is time to make a change, firms should reluctantly accept that they may have to
pay a bad boss to leave. To pay a crooked one would be wrong. That aside, when a chief executive
leaves under a cloud, his career is wrecked and he is unlikely ever again to run a firm of similar
size. Buying out the boss may be the fastest way to give a company a fresh start. A fresh start is
exactly what many companies need.
VOCABULARY:
global vision – зд. умение смотреть далеко вперед
VOCABULARY CHECK
1) Сокращение штата, проведенное ненадлежащим образом, очень справедливо
называют "сокрушением штата".
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2) Как правило, старшие менеджеры работают в штаб-квартире или в головном
офисе компании.
3) Отдел кадров компании занимается вопросами заработной платы, подбора и
обучения персонала, а также программами поощрения сотрудников.
4) Компания может сама осуществлять подбор специалистов, либо обращаться за
помощью к специальным рекрутским фирмам.
5) Охота за «головами» - это переманивание высококвалифицированных
специалистов при помощи тщательно разработанной системы льгот.
6) «Делегирование» полномочий – это передача обязанностей менеджеров
среднего звена рабочим и служащим.
7) Организация с упрощенной структурой управления имеет больше
возможностей для принятия решений на всех уровнях.
8) Увольнение по сокращению штатов предполагает попытку фирмы
трудоустроить увольняемого на новом месте.
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company’s shares at low prices. There may be performance-related bonuses if the manager reaches
particular objectives for the company.
Compensation is also used to talk about money and other benefits that a senior manager (or
any employee) receives if they are forced to leave the organization, perhaps after a boardroom row.
This money is in the form of a compensation payment, or severance payment. If the manager also
receives benefits, the payment and the benefits form a severance package.
Executives may be persuaded to move company by the promise of a golden hello: a large
sum of money or some other financial enticement offered by the company they move to.
A compensation package for an executive leaving a company is also known as a golden
goodbye, golden handshake, or golden parachute.
When executives are ousted, or forced to leave, people may talk about companies giving
them the golden boot.
In Britain, executives with very high pay and good benefits may be referred to as fat cats,
implying that they do not deserve this level of remuneration.
VOCABULARY
salary - оклад, жалованье, заработная плата (служащего): исчисляется на
месячной или годовой основе и напрямую не зависит от
количества отработанных часов или объемов выполненных работ;
обычно термин применяется к оплате труда "белых воротничков"
(служащих, научно-технического персонала и т. п.)
wages - заработная плата : сумма, выплачиваемая работодателем
наемному работнику в зависимости от количества отработанного
времени или выполненного объема работ; часто устанавливается
на почасовой или понедельной основе; обычно термин
применяется к оплате труда рабочих и неквалифицированных
работников
fringe benefits - дополнительные льготы (выплаты, привилегии),
perks предоставляемые работнику сверх основной зарплаты
(напр.бесплатное медицинское обслуживание, пенсионная схема,
медицинская страховка, оплачиваемый отпуск, служебный
автомобиль, субсидия на жилье или образование детей)
compensation - вознаграждение, оплата, компенсация ( чаще всего, когда речь
remuneration идет о руководителях компании)
compensation package - компенсационный пакет: совокупность всех видов
remuneration package вознаграждений работника или управляющего, включающая
заработную плату, различные виды премиального
вознаграждения по результатам работы, страховую премию и т. п.
share options (BrE) - опцион на акции: право купить или продать определенное
stock options (AmE) количество акций компании в течение конкретного срока по
определенной цене
performance-related - премия, надбавка, бонус по результатам : вознаграждение,
bonuses выплачиваемое в дополнение к обычной заработной плате,
обычно, чтобы поощрить высокую производительность или
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высокое качество работы
compensation payment - выходное пособие, компенсация, выплачиваемая сотруднику, с
severance payment которым прекращены трудовые отношения (в связи с
сокращением штатов, досрочным расторжением или истечением
срока трудового договора и т. п.)
golden hello - большой аванс, предлагаемый сотруднику при устройстве на
новое рабочее место (использующийся работодателем в качестве
"приманки")
golden goodbye - компенсация за отставку, золотое рукопожатие: часто не
golden handshake облагаемая налогом выплата компанией денег директору,
golden parachute менеджеру или консультанту, который вынужден покинуть
компанию до истечения срока его контракта в связи со слиянием,
поглощением или по какой-л. иной причине
oust - выгонять с работы
give the golden boot
fat cat - богач, денежный мешок
COMPREHENSION QUESTIONS:
1) What is the difference between wages and salary?
2) What do fringe benefits and perks include?
3) Who has the right to buy the company’s shares at low prices?
4) What could a boardroom row result in?
5) Why do companies try to retain qualified executives?
6) When do managers receive compensation and in what form?
7) When are executives given the golden boot?
VOCABULARY PRACTICE
Severance Pay may range from two weeks to as much as six months or more at your
current salary, plus unused vacation and maybe even sick pay and floating holidays. Your ex-
employer may pay it all in one lump sum or in regularly-scheduled paychecks.
Many employers routinely give severance packages to long-term employees who are fired
for reasons other than serious misconduct, even if they are not legally required to do so. Why? To
soften the blow of being fired and to buy a little insurance against lawsuits. A severance package
may help sweeten the sour grapes a worker feels about being fired. And a happier former employee
is a less litigious former employee.
Both privately and publicly held companies make stock options available for several
reasons: they want to attract and keep good workers; they want their employees to feel like owners
or partners in the business; they want to hire skilled workers by offering compensation that goes
beyond a salary; this is especially true in start-up companies that want to hold on to as much cash
as possible.
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Stephen Walls, who picked up a six-figure golden handshake when Plessey was bid for four
years ago, is in line for another bumper pay-off. He stands to receive at least $925,000
compensation after a boardroom row at Anglo-French paper group Arjo Wiggins.
He also said he would work without a contract indefinitely. Such a move would prevent
him from receiving substantial ‘golden parachute’ severance pay should he leave United’s
employment.
Most executives value salary increases far more than perks when changing jobs, says a
survey carried out by a leading recruitment company. Responses in a recent survey of 146
executives found that 63 per cent of them said they would prefer to have the equivalent increase in
salary instead of some or all of the perks on offer. The benefits they considered most important
were non-contributory pensions, company cars and healthcare.
Huge payoffs recently have included $1.5 million for Robert Horton, who was ousted as
chairman and chief executive of BP following a boardroom row.
TEXTS TO TRANSLATE:
73. In the money
Executives have enjoyed an astonishing pay bonanza. Edward Carr explains why
most of them deserved it
RIGHT and left, Americans and Europeans, stockmarket investors and anti-globalisation
campaigners all share one belief: top managers pay themselves too much. The evidence seems to
bear them out. For almost half a century the ratio of top executives' pay to median earnings was as
smooth as a boardroom table. Then, starting in America in the 1980s and a few years later
elsewhere, this ratio began to increase before taking off exponentially and peaking around the turn
of the millennium. At that point the worker on an American shop floor was earning in a year
roughly what his boss on the top floor took home each evening.
Most people think they know what lay behind this. Greedy chief executives, abetted by
weak, sycophantic boards, gorged themselves at the expense of savers—more often than not the
very pension and mutual-fund investors who, as workers, had seen their salaries and benefit
packages fail to grow. To add to the grievance, many executives did not seem to deserve such
rewards. Extraordinary pay for great performance is fine, it is routinely said. But many executives
have been paid a fortune for presiding over mediocrity. The Corporate Library, an American
corporate-governance consultancy, last year identified 11 large and well known but poorly
governed companies, including AT&T, Merck and Time Warner, where the chief executive had
been paid at least $15m a year for two successive years even as the company's shares had
underperformed. Robert Nardelli received a $210m pay-off when he lost his job earlier this month
even though the shares of his company, Home Depot, fell slightly during his six years in charge.
Carly Fiorina, ejected from Hewlett-Packard almost $180m better off—including a severance
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payment of $21.6m—after a lacklustre tenure as chief executive, let it be known in her
autobiography that money was not important to her. Not everyone believed her.
National pay schemes vary greatly, and America remains ahead of, and more extreme than,
other countries. But over the past decade all markets have displayed the same pattern: widening
gaps between managers and workers and greater emphasis on long-term incentives. It is hard to see
how this could have been caused by universally poor governance across so many different systems.
The chief mistake of the past 15 years was the granting of too many share options to too
many people on terms that were too generous. That was costly and unwarranted, but it stemmed
more from foolish accounting and tax policies supercharged by bull-market mania than from a
sinister plot hatched in the executive suite.
This is not to deny the abuses and downright crookery that have marred executive pay.
Even now, dozens of senior managers are under investigation for “backdating” their share
options—illegally manipulating the timing of grants to increase the likelihood of a payment. Nor is
it to assert that all is right in the boardroom. Indeed, the case for reform is strong.
It is, however, to argue that popular opinion is wrong. The lion's share of the executives'
bonanza was deserved—in the sense that shareholders got value for the money they handed over.
Those sums on the whole bought and motivated the talent that managed businesses during the
recent golden age of productivity growth and profits. Many managers have done extremely well
over the past few years; but so, too, have most shareholders.
Between 1993 and 2003 the total pay of the top five executives in the Standard & Poor's
1,500, which accounts for roughly 80% of listed American companies by value, amounted to some
$350 billion, according to Lucian Bebchuk and Yaniv Grinstein, of Harvard and Cornell
Universities. The share of earnings consumed by those people's pay rose from 5.2% in the first five
years of that period to 8.1% in the second five. And this is without counting the value of pensions,
which can boost the total by as much as a third.
Although overpaying a chief executive on its own is unlikely to bankrupt a company, there
are other reasons to care about top pay. One is incentives. The role of pay is not to get executives to
work harder (most are workaholics already, toiling towards an appointment with the heart surgeon),
but to recruit good managers and get them to take difficult decisions. Shutting a subsidiary,
sacrificing a pet project or forgoing a tempting acquisition is not much fun. Without the spur of
high pay, managers tend to avoid such things.
Executive pay is also the most controversial aspect of the increasing inequality that has
appeared over the past couple of decades. As the topmost echelon appears to be capturing a huge
share of new wealth, everyone else's wages have barely shifted. This would be disruptive even if
managers were felt to deserve what they are paid. It would be explosive if high pay continued to be
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seen as a swindle. Ultimately, businesses function with the blessing of workers, shareholders,
customers and voters. If business leaders are universally seen as immoral and grasping, cynicism
and mistrust will flourish and choke enterprise. Jeb Bush, a Republican former governor of Florida
and no enemy of business, gave warning last year that “if the rewards for CEOs and their teams
become extraordinarily high with no link to performance, then it undermines people's confidence in
capitalism.”
Across the rich economies, governments have begun to demand disclosure of pay and new
corporate-governance codes. In America's Congress Charles Grassley, a Republican and former
head of the Senate committee on finance, is calling for boards to “do their job” instead of being “in
hock” to managers. Barney Frank, the new Democratic head of the House financial-services
committee, is likely to introduce a bill on pay.
All this makes business people extremely nervous. The difficulty is that they find it hard to
discuss pay. (Imagine the talking point: “I am worth $100m because...”) Their case is seldom heard
or examined. But “it is a societal problem,” says Jay Lorsch, of Harvard Business School. “If the
business community doesn't do something, we are going to get more pressure from the federal
government—and we don't want that.”
The arguments about pay are subtle and complex. They start with that moment in the 1980s
when the long-established relationship between workers' and managers' pay began to break down.
What could explain such a turning point?
VOCABULARY:
backdating - датировка [проведение] задним числом
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The vote is purely advisory, with no binding force. But it leaves the company in a sort of
legal limbo. More importantly, it leaves boardrooms everywhere in a difficult position. The
message of shareholder discontent with large executive pay packages and poor corporate
performance has never been so clear.
Company bosses have been slow to understand the new mood of outrage among
shareholders. Shareholders have for years accepted that "fat cat" bosses paid themselves more or
less whatever they liked. So it is uncomfortable to face criticism. But behind the criticism is a
strong feeling that many chief executives are living according to quite a different set of rules from
everyone else.
Although the value of most large companies has fallen considerably over the last few
years, bosses have continued to pay themselves more. The value of their pensions has increased and
they have struck lavish deals in the form of "golden parachute" severance deals to cushion their fall
if they leave. Some of the aspects of Mr Garnier's package that most irritated the shareholders were
ones that appeared to reward not superior performance but simply being there. Lots of bosses have
such components in their pay.
Of course, companies may set up deals with bosses they no longer want in order to
encourage them to go quickly and without a legal fight. But a generous advance promise to reward
failure is no way to encourage success. Like the "guaranteed bonus" and the lifetime free dental
treatment, it offers chief executives a one-way bet.
If the CSK vote makes companies cautious about such deals, that is welcome. The market
for chief executives is far from perfect. There is no rate for the job, positions are often quietly filled
rather than openly advertised and boardroom search committees rarely ask, "Could we get someone
equally good even if we paid a bit less?" If the board now has to defend its compensation decisions
publicly, it may be easier to say "We'd love to give you a golden parachute but the shareholders
would make a fuss." More fuss, please, from shareholders. It's their company, after all.
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"It certainly represents a landmark in executive pay,'' said Pearl Meyer, whose firm
surveyed 51 large companies in a variety of industries last summer as a way of providing an early
glimpse into the pay packages that will be disclosed in proxy statements issued by companies in the
coming months.
Chief executives' compensation has more than doubled since 1995, when the more than 50
companies surveyed paid an average of $4.4 million, about half of that in cash, according to the
study.
But while a buoyant stock market and generous awards of stock options have helped push
their average pay into eight figures for the first time, chief executives may not be able to look
forward to such largesse, Ms. Meyer said.
"We may be coming to the end of a golden era," she said, adding that the slowing economy
and the downturn in many of these companies' stocks are not yet reflected in the levels of executive
pay.
Stock options continue to be the currency of choice, accounting for 60 percent of the
compensation packages awarded to chief executives, according to the survey.
The average executive received $6.5 million in options, an increase of 28 percent from
1999. The options are valued at one-third of their grant value.
Companies are continuing to award large grants, Ms. Meyer said, adding that "the
megagrant is now standard" rather than the exception.
The details of proxy statements are expected to reflect how companies are handling
significant declines in their stock prices.
Executives may have been given options at prices higher than the current stock price, for
example, and companies may choose to reprice those options.
"You're going to see more changes in option practices," Ms. Meyer said.
The use of options is pervasive in the compensation packages of other senior executives,
according to the survey, and has reached at least half the total pay for chief financial officers and
the like for the first time.
But companies were also generous with annual bonuses to their chief executives, which
rose 20 percent over the last year, to an average of $2 million, according to the survey.
Salaries, once the bulk of executive compensation, now account for just 10 percent of pay
packages, increasing 4 percent in the last year.
In keeping with the preference for stock options and a move away from performance-based
plans, the only portion of executive pay to decline was long-term incentives.
Those incentives decreased by 16 percent from 1999 and now represent about 12 percent
of total compensation, according to the survey.
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"You are on the cusp of the turn," Ms. Meyer said.
VOCABULARY CHECK
1) «Золотое рукопожатие» - увольнение одного из руководителей компании с
уплатой ему значительной финансовой компенсации.
2) «Золотое приветствие» - разовое вознаграждение при привлечении особо
полезного сотрудника в новую фирму.
3) Выходное пособие – компенсация при увольнении. Такая выплата может быть
единовременной или производиться равными суммами в течение некоторого периода
времени.
4) Дополнительные льготы, выплаты и привилегии включают в себя владение
акциями компании, полностью оплачиваемые отпуска, субсидированное жилье, служебный
автомобиль и др.
CASE STUDY:
Mitsubishi Motors to rejig structure
DaimlerChrysler, will reveal significant changes to its senior and middle management
The changes reflect underlying tensions between the company's new German
managers and established Japanese executives who found it difficult adjusting to the new
culture.
The restructuring will aim to weed out managers whose more traditional
mentality could delay the sweeping reforms under way under the new management.
It is understood that both MMC's chief operating officer and president want to
dispense with managers at any level who remain locked into the 'length of service'
mentality and have acted ahead of this month's meeting together to weed them out.
when he announced 60 senior staff advisers - who were of an advanced age and made a
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On arrival in January, Rolf Eckrodt, chief operating officer, appointed a 'COO
management resent the presence and power of the COO Team, all of whom are under 40
years old and who are controlling the strategic direction of the company.
The tension between the COO Team and some of MMC's managers has been
described as stemming from Japanese managers with a 'job for life' attitude.This is not
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Part 1
Unit 8
TRANSPORTATION
AND LOGISTICS
274
UNIT 8
TRANSPORTATION AND LOGISTICS
275
Air transportation is a completely different thing than truck freight. If you are shipping
something by air freight, then there is obviously a critical time factor involved, otherwise you
would not be willing to incur the additional cost.
Cargo airlines move freight directly for shippers and they also offer cargo space to freight
forwarders and integrators.
Freight forwarders serve as an intermediary between the airlines and the shipping public.
They buy large blocks of space on various airlines, called pallet positions, to various locations.
The air waybill is the air freight industry’s equivalent of the trucking industry’s bill of
lading. It serves the same general purpose and contains essentially the same information.
VOCABULARY
logistics -логистика: наука о планировании, контроле и управлении
транспортными, складскими и прочими активами,
совершаемыми в процессе доведения сырья и материалов до
предприятия, а готовой продукции до потребителя, передача,
хранение и обработка соответствующей информации
truckload carrier - грузовой перевозчик
shipment - груз; партия товара; перевозка, поставка (товаров)
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freight - груз, фрахт; стоимость перевозки
shipper - грузоотправитель; товар, удобный для перевозки
consignee - грузополучатель, консигнатор
consignor - грузоотправитель
freight bill - счет за провоз; счет за фрахт
collect payment - взимать плату
transportation broker - транспортный брокер; оператор
owner-operator - оператор-перевозчик (как правило, собственник
транспортных средств)
freight charges - грузовой тариф; плата за перевозку груза
actual movement of the - фактическое передвижение груза
freight
bill of lading - накладная, коносамент
carrier freight bill - счет за перевозку груза
delivery receipt - расписка в получении
air transportation - авиаперевозка
cargo airlines - грузовые авиалинии
integrated carriers - интегрированные перевозчики: перевозчики, в распоряжении
которых имеется более одного вида транспорта
freight forwarders - агентство по отправке грузов; грузовое транспортно-
экспедиционное агентство
pallet - паллет, поддон
air waybill - авиагрузовая накладная
dry cargo ships - сухогруз
tanker - танкер, нефтеналивное судно
universal ship - универсальное судно
bulker (bulk carrier) - балктанкер; балкер; сухогруз (судно для перевозки массовых,
навалочных, наливных или насыпных грузов)
timber-carrier - лесовоз
reefer ship - рефрижераторное судно
roll-on/roll-off ships - трейлер, судно с горизонтальной погрузкой (выгрузкой)
goods of single or mixed - товары одной или нескольких разновидностей
commodity
COMPREHENSION QUESTIONS:
1) What does the notion “business logistics” encompass?
2) What are the responsibilities of a carrier in a truck shipment?
3) Why is the relationship between a transportation broker and an owner-operator mutually
beneficial?
4) What documents are used in a domestic truck shipment?
5) What purposes does the bill of lading serve?
6) Who is the carrier freight bill presented to?
7) What is POD?
8) What are the functions of freight forwarders?
9) What types are all cargo ships divided into?
277
VOCABULARY PRACTICE
Actually, logistics has its origin in the military. From that perspective, it refers to the
movements of troops, equipment and supplies from one location to another.
In many companies the logistics department will typically include the areas of traffic,
warehousing and export/import operations.
The terms “shipper” and “consignor” are interchangeable in transportation lingvo. This
is the company, or person, who gives the freight to the carrier for shipment. The recipient of the
freight, or customer, is typically referred to as the “consignee”.
If the freight is damaged at the time of delivery, you should note on the delivery receipt
that the goods are damaged.
Integrated carriers function as both an airline and a freight forwarder. Generally, they
own a smaller number of airplanes than an exclusive air carrier, and so, they must make use of the
commercial airlines and other all cargo airlines for the volume they cannot handle with their own
equipment.
The broker bills the shipper for the freight, then pays the owner-operator a percentage of
the revenue for the transportation service provided.
Delivery charges (commonly referred to as freight) are based on the size and weight of the
order as well as its' destination.
The future of container shipping was the topic discussed by a number of experts in London.
According to the estimates more than two thirds of the global general cargo trade moves in
containers.
TEXTS TO TRANSLATE:
76. The physical internet
Like information on the internet, goods are moving around the world with ever
greater efficiency. But Paul Markillie spots dangers lurking in modern supply chains
LOUISVILLE, Kentucky, 2am. Roaring thrust-reversers rapidly slow the giant MD-11 jet
as it touches down on the runway before turning to taxi towards a sprawling floodlit building.
Seconds after it has pulled up at the ramp, large doors on the fuselage swing open and people scurry
around with equipment. But they are not about to unload hundreds of passengers: instead, the
aircraft carries stacks of air-freight containers stuffed with parcels and documents. Soon they will
be emptied to join the 300,000 packages that are sorted every hour at the UPS Worldport.
Every package is automatically photographed, measured and weighed and has the
information on its super-barcode analysed by computers to determine its trajectory along some of
the 17,000 conveyor belts. This requires awesome computing power: more data are processed here
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every 30 minutes than in an entire day of trading on the New York Stock Exchange. Eventually the
packages slide down a chute to be placed into a bag or an air-freight container. And before dawn
they are off again to complete their journey in another aircraft or in one of a fleet of waiting trucks.
A few hundred miles to the south-west, in Memphis, Tennessee, more landing lights line
up across the night sky. This is FedEx's global hub, and for the next few hours an aircraft will land
here every 90 seconds. Every one of them has the company logo painted on its tail. Tractors towing
containers and cargo pallets dash everywhere. Documents are automatically sorted in a maze of
machines. In one giant building, known as the “matrix”, packages zoom around on 300 miles of
conveyor belts. Before dawn, all these packages too will have departed again.
As the night continues to travel west, similar scenes unfold at airports in Manila, Taipei,
Hong Kong, Mumbai, Guangzhou, Dubai, Cologne, Paris and Anchorage. The goods moving
through these air-cargo hubs range from items bought on eBay to vehicle parts, fresh flowers,
books, computers, transplant tissue—just about anything imaginable. Even live whales have been
“FedExed”. And when the night reaches America again, the landing lights once more appear in the
sky over Louisville and Memphis.
21st-century clippers
Frederick Smith, FedEx's chief executive, compares his company's jets to clippers, the
sailing ships that once carried cargoes on the trade winds. Mr Smith pioneered the air-express
business in the early 1970s by delivering a few hundred parcels overnight to a handful of American
cities using Falcon aircraft the size of an executive jet. At Memphis airport, the parcels were sorted
on a table. Many of his contemporaries thought he was mad: who would pay to send packages by
air? He almost went bust. But now FedEx has ordered a fleet of double-deck Airbus A380s to help
cope with demand. Rival UPS has also placed orders for the huge new Airbus. Neither company
wants any seats inside, just space for lots of cargo. If they were passenger airlines, UPS and FedEx
would now rank among the world's biggest carriers.
In an effort to rebrand itself, UPS is painting the phrase “Synchronising the World of
Commerce” on its 270-plus aircraft and 90,000-plus vehicles, including its distinctive dark brown
delivery trucks. It may not exactly trip off the tongue, but it is an apt description of a business that
has grown far beyond simply delivering things. Nowadays firms ranging from trucking companies
to freight forwarders, shipping lines, air-cargo carriers and post offices are more likely to use the
word “logistics” to describe what they do.
Logistics is a military term. As generals know, wars can be won or lost by it even before
they are fought. Now companies are having to become more involved in planning their own
logistics. Under relentless pressure to reduce costs and increase sales around the world, firms are
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outsourcing operations to subcontractors who can do them better and more cheaply, and moving
more of their production and services to lower-cost countries.
Globalisation requires greatly increased co-ordination of transport by road, rail, sea, air and
now also by an entirely new route to market: the internet. This makes logistics vastly more
complex. The job of ensuring that all these things work together is known as supply-chain
management. Thomas Freese, an American consultant in this business, explains: “Supply-chain
management is an evolution of logistics. Logistics tends to be tactical, supply-chain management is
strategic.”
Supply chains are becoming not only longer but also more enveloping. Supply-chain
management these days can include anything from buying raw materials to managing suppliers,
warehousing, operating transport fleets, taking orders, collecting payments, repairing products and
even answering the telephone at call-centres. Companies are also outsourcing supply-chain services.
Yet supply-chain management is not just about wringing costs out of a business. It can also
be used to increase revenue and boost profits without necessarily lowering costs. Indeed, some
companies have re-engineered their supply chains to gain a huge competitive advantage. What has
put Wal-Mart ahead of Sears in retailing, Dell in front of Hewlett-Packard in the personal-computer
business and Zara ahead of Marks & Spencer in fashion? The market leaders all have supply chains
that are more responsive to customer demand, according to Yossi Sheffi, director of the
Massachusetts Institute of Technology's Centre for Transportation and Logistics.
Things like transport, purchasing and warehousing used to be considered merely part of the
cost of doing business, and were often managed as separate entities. Now they are coming together
as a strategic item on the chief executive's agenda. There is a reason for this. “Supply-chain leaders
are very aware of how a company runs because they have to deal with all the different components
of the operation,” says Rick Blasgen, who used to work for a big American food group and now
runs the Council of Supply Chain Management Professionals.
But as this survey will show, supply chains harbour dangers too, and managing risk is
becoming a pressing issue. A number of alarm bells have started ringing. Most firms have been
organising their logistics to make themselves leaner. Many now carry little or no inventory to save
money. Indeed, sometimes their entire inventory consists of what is moving from the factory
directly to the consumer in the back of a truck or an aeroplane. If something goes wrong—and it
often does—business will quickly grind to a halt.
Experts worry that some companies do not fully understand the risks of operating very lean
international supply chains—or that they choose to ignore them because their rivals are forcing the
pace, purchasing critical components from a single supplier to increase their buying power. In fact,
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some firms do not know who is supplying their suppliers—or even where some of their lower-tier
suppliers are based.
VOCABULARY CHECK
1) Перевозчики доставляют груз от грузоотправителя к грузополучателю.
2) Логистика включает в себя такие понятия как транспортировка грузов,
складирование, экспортно-импортные операции, контроль за продвижением товара,
сервисное обслуживание клиентов.
3) Транспортный брокер, как правило, не располагает собственными
транспортными средствами.
4) Транспортная накладная, счет и расписка в получении – это основные
документы при перевозке грузов.
5) Коносамент - документ, выдаваемый перевозчиком грузоотправителю в
подтверждение факта принятия груза к перевозке и обязательства передать его
грузополучателю; содержит условия транспортировки товара, удостоверяет право
собственности на товар.
6) Транспортно-экспедиционная компания - компания, предлагающая услуги по
принятию и отправке грузов клиента.
7) Интегрированные перевозчики - компании-перевозчики, в распоряжении
которых имеется более одного вида транспорта.
8) Банк грузоотправителя представляет все грузовые документы банку
грузополучателя на инкассо.
9) Балкеры, лесовозы, рефрижераторные суда, танкеры относятся к
специализированным видам транспортных средств.
10) Универсальное судно – судно, предназначенное для перевозки самых
различных грузов.
11) Суда с горизонтальной погрузкой и выгрузкой получили большое
распространение.
12) Для развития контейнерных перевозок требуются значительные инвестиции в
обустройство портов, дорог, терминалов.
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SECTION 2 FREIGHT TERMS, LIABILITIES AND
RESPONSIBILITIES
LEAD-IN
Collect and prepaid are two of the most common terms in transportation. These words
indicate who is responsible for paying the carrier’s freight bill. “Collect” indicates that the freight is
payable by the consignee or recipient of the freight. “Prepaid” means that the shipper of the goods is
responsible for paying the freight charges. It is very simple but very important.
Cash on Delivery (COD).If you do not trust the creditworthiness of your customer, you
may use your carrier as a collection agent for you. Indicate on the bill of lading, in the COD block,
the value of the goods you are shipping, and the carrier will not deliver the freight unless they
receive a check from the consignee. The carrier then sends the check to you. The carriers charge for
this service, but it is nominal and sometimes well worth it.
The International Chamber of Commerce (ICC) developed and issued a set of rules,
called INCOTERMS, interpreting the major terms of delivery common in foreign trade contracts.
They allow sellers and buyers from different cultures and legal systems to decide at what point the
ownership and paying for freight, insurance and customs costs transfer from one to the other. Each
INCOTERM is a three letter acronym related to where the seller's responsibility ends.
There are four groups of INCOTERMS - "E", "F", "C" & "D"
E - group: used where the seller does not want to arrange transport.
EXW or "Ex-Works" means the seller's only responsibility is to make the goods available
at the seller's premises, i.e., the works or factory. The seller is not responsible for loading the goods
on the vehicle provided by the buyer unless otherwise agreed. The buyer bears the full costs and
risk involved in bringing the goods from there to the desired destination. Ex works represents the
minimum obligation of the seller.
F - group: used where the seller can arrange some transport within his/her own country.
FCA or " Free Carrier " This term has been designed to meet the requirements of multi-
modal transport, such as container or roll-on, roll-off traffic by trailers and ferries. The seller fulfils
his/her obligations when the goods are delivered to the custody of the carrier at a named point. If no
precise point can be named at the time of the contract of sale, the parties should refer to the place
where the carrier should take the goods into its charge. The risk of loss or damage to the goods is
transferred from seller to buyer at that time.
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FAS or "Free Alongside Ship" requires the seller to deliver the goods alongside the ship
on the quay. From that point on, the buyer bears all costs and risks of loss and damage to the goods.
FAS requires the buyer to clear the goods for export and pay the cost of loading the goods.
FOB or "Free On Board": the goods are placed on board the ship by the seller at a port of
shipment named in the sales agreement. The risk of loss of or damage to the goods is transferred to
the buyer when the goods pass the ship's rail (i.e., off the dock and placed on the ship). The seller
pays the cost of loading the goods.
C - group: used where the seller can arrange and pay for most of the freight charges up to
the foreign country.
CIF "Cost, Insurance, and Freight" means that the seller must contract with the insurer
and pay the insurance premium. Insurance is generally important in international shipping because
transport companies have restricted liability for loss or damage.
D - group: used where the seller can pay for most of the delivery charges to the destination
country.
DAF "Delivered At Frontier" means that the seller's obligations are fulfilled when the
goods have arrived at the frontier but before the customs border of the country named in the sales
contract. The term is primarily used when goods are carried by rail or truck. The seller bears the full
cost and risk in delivering the goods up to this point, but the buyer must arrange and pay for the
goods to clear customs.
DES "Delivered Ex-Ship" means the seller makes the goods available to the buyer on
board the ship at the destination named in the sales contract. The seller bears the full cost and risk
involved in bringing the goods there. The cost of unloading the goods and any customs duties must
be paid by the buyer.
DDP "Delivery/Duty Paid" represents the seller's maximum obligation. The term "DDP" is
generally followed by words indicating the buyer's premises. It notes that the seller bears all risks
and all costs until the goods are delivered. This term can be used irrespective of the mode of
transport. If the parties wish to make clear that the seller is not responsible for certain costs,
additional word should be added (for example, "delivered duty paid exclusive of VAT and/or
taxes").
It is not compulsory to use incoterms. However when things go wrong and disputes arise it
is much easier to sort out who is responsible for what if incoterms have been written into the
shipping contract. To be safe, incoterms should be decided upon in the negotiationphase of any
international purchasing contract.
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VOCABULARY
freight - фрахт, стоимость перевозки; груз
collection - получение денег ( по векселям и т.п. ), инкассирование,
инкассо
collect freight - условие об уплате фрахта в пункте назначения после сдачи
груза
prepaid - уплаченный заранее
cash on delivery - наложенный платеж, оплата по (при) доставке: способ
collect on delivery (COD) расчетов, при котором оплата производится после доставки
товара
International Chamber of - Международная торговая палата, МТП
Commerce (ICC)
Incoterms - Инкотермс, "Международные коммерческие условия": ряд
International Commercial терминов, определяющих условия поставки и момент перехода
Terms ответственности от стороны к стороне
ex works - франко-завод, франко-предприятие, с завода (рудника, склада,
EXW предприятия), самовывоз: условие договора купли-продажи,
при котором обязанностью продавца является предоставление
товара в распоряжение покупателя на своем предприятии или
складе, при этом покупатель несет ответственность за погрузку
и транспортировку груза
FCA - франко-перевозчик: условие в торговом контракте,
Free Carrier означающее, что продавец несет ответственность за товары и
оплачивает все расходы по транспортировке и страхованию
товаров до тех пор, пока товары не перейдут в распоряжение
выбранного покупателем перевозчика
FAS - франко вдоль борта судна, свободно вдоль борта судна, фас:
Free Alongside Ship условие торгового контракта, согласно которому продавец
несет все расходы по страхованию и транспортировке груза
вплоть до доставки товара к борту судна
FOB - свободно на борту, франко-борт, фоб: условие
Free On Board внешнеторгового контракта, означающее, что транспортные,
страховые и погрузочные расходы вплоть до завершения
погрузки товара несет экспортер (продавец), т. е. они
включаются в цену; право собственности переходит к
покупателю с момента завершения погрузки
CIF - стоимость, страхование, фрахт (СИФ): условие контракта,
Cost, Insurance, and означающее, что экспортер несет расходы по доставке товара в
Freight порт отгрузки, его страхованию, погрузке и фрахту до порта
назначения; импортер оплачивает оговоренную цену товара
после предъявления через банк документов (коносамента,
страхового полиса, счета-фактуры).
DAF - "доставлено на границу"; употребляется с указанием места;
Delivered At Frontier ответственность продавца заканчивается, когда товар
подготовлен к экспорту и доставлен в указанный пункт у
границы
DES - оставлено (поставлено) с судна, поставлено (доставлено)
Delivered Ex-Ship франко-судно: условие торгового контракта, означающее, что
ответственность продавца заканчивается, когда корабль с
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товаром на борту прибыл в указанный порт (товар не
разгружен)
DDP - "доставлено, пошлина оплачена": условие в торговом
Delivery/Duty Paid контракте, означающее, что ответственность продавца
заканчивается после того, как товар доставлен в указанное
место в стране покупателя
COMPREHENSION QUESTIONS:
1) What are the most common terms in transportation and why?
2) What do the words “collect” and “prepaid” indicate?
3) When is delivery effected on COD terms?
4) What do Incoterms imply?
5) What four groups are Incoterms divided into?
6) What do FOB (CIF/DAF/DDP/EXW) terms cover?
VOCABULARY PRACTICE
Freight terms are a crucial aspect of transportation and logistics because it has to do with
money.
Rather than having the freight bill sent to either the shipper or the consignee, the freight
may be billed to a third party.
What are INCOTERMS or, to give it the full title, International Commercial Terms? They
are the official rules for the interpretation of trade terms; the international standard for defining
the respective responsibilities at the various stages of the shipping process.
In international trade, it would be best for exporters to refrain, wherever possible, from
dealing in trade terms that would hold the seller responsible for the import customs clearance
and/or payment of import customs duties and taxes and/or other costs and risks at the buyer's end,
for example the trade terms DDP.
Similarly, it would be best for importers not to deal in EXW, which would hold the buyer
responsible for the export customs clearance, payment of export customs charges and taxes, and
other costs and risks at the seller's end.
The FAS term is popular in the break-bulk shipments and with the importing countries
using their own vessels.
CIF terms provide for the cargo insurance and delivery of goods to the named port of
destination (discharge) at the seller's expense. Buyer is responsible for the import customs
clearance and other costs and risks.
TEXT TO TRANSLATE:
77. Negotiation Strategies
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With enough volume, almost anything is negotiable. This is one of the cardinal rules of
freight negotiation. The only thing that you absolutely cannot negotiate is the thing you don't
mention. Always negotiate from a position of strength. Know your business. Telling a carrier that
you have a lot of freight doesn't help. Have all of your facts and figures together.
You should, at minimum, know:
- Frequency of shipment - number of shipments per day, week, month, etc.
- Freight volume - tonnage shipped or revenue paid to your present carrier for a definite
period of time
- How quickly you pay your bills - carriers want to be paid on time. If you are a slow
payer, you will be less likely to get a good rate agreement
- What is the time your freight will be available for pick-up -carriers need to see how
well you fit into their current schedule
- Where are you shipping to and how much volume to each state/region - carriers need
this to determine if your operation fits-in with theirs
- Detailed description of the commodity(ies) you are shipping and their respective class
ratings - carriers need to know what they are moving to determine the specific nature of the freight
and how economical or costly it will be for them to move it
- The percentage of prepaid vs. collect freight. Prepaid freight is that paid by the shipper.
Collect freight is that paid by the consignee. Carrier discounts only apply to the payer of the freight
bill. Carriers need to know how much of your freight will be covered by your discount.
There are other factors to consider, and actually, the more information you can provide, the
more accurately a carrier can assess your account.
VOCABULARY:
freight rates – грузовой тариф
VOCABULARY CHECK
1) При транспортировке грузов «инкассо» означает, что стоимость фрахта
оплачивается грузополучателем.
2) В случае, если счет не высылается ни грузоотправителю, ни грузополучателю, он
может быть направлен третьей стороне.
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3) Если вы не доверяете своему клиенту, то поставка товара может быть
осуществлена на условиях COD – уплата наличными при доставке.
4) Инкотермс – это международные термины, определяющие условия поставки и
момент перехода ответственности от продавца к покупателю.
5) Один из вопросов, затронутых на этой конференции, касался страхования
контейнерных перевозок.
6) ФОБ - базисные условия поставки, согласно которым продавец оплачивает
расходы по транспортировке, страхованию, а также таможенные расходы до момента
доставки товара на борт судна зафрахтованного покупателем, в согласованном порту
погрузки в установленный срок.
7) Фрахт - это плата за перевозку груза; перевозимый на зафрахтованном
транспортном средстве (первоначально на судне) груз, а также сама такая перевозка.
8) Базисные условия поставки, при которых товар переходит в распоряжение
покупателя уже на предприятии или складе поставщика, называются франко-завод.
9) Базисные условия группы Е предусматривают, что обязанности продавца
являются минимальными: он должен лишь предоставить товар в распоряжение покупателя в
согласованном месте – обычно в собственном помещении.
10) Существуют два условия, предусматривающие страхование: CIF и CIP.
Согласно этим базисным условиям продавец обязан обеспечить страхование в пользу
покупателя.
CASE STUDY:
Troubled Waters
While the majority of the top 20 ocean carriers have all gleefully announced their
record profits in the last 12 months, most intra-Asian shipping lines have all struggled to
remain in the black. Although low freight rates have played a part in this poor
performance, rapidly increasing charter hire costs have been the main culprit.
For the South Korean ocean carrier Sinokor Merchant Marine, this has been a big
concern. JH Lee, the company's charter team section chief, lamented: "It is very difficult to
make money. Sometimes, we decrease the number of vessels we are operating, and we
change the vessels in our services many times to obtain the best efficiency, which gives
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Lee explained: "Three years ago, most of our fleet consisted of chartered
tonnage, but in recent years, as the charter market has gone up so much, this policy has
changed, and now we own some of our ships. We have 17 vessels in our fleet, and about
60% of these are now owned. In the past few years, we have bought on the secondhand
market, to reduce our exposure to vessel operating costs. Despite this, our charter rates
As well as trying to reduce vessel costs Sinokor has had to concentrate on its
most profitable trades. In some cases, this has meant reducing the number of vessels
deployed, or has even led to the cutting of services. In addition, because freight rates
have been so poor, Sinokor's profitability is affected more because its portfolio is based
mainly on the South Korea/China trade lane. Nevertheless, in comparative terms, the
company has continued to do fairly well financially. In 2003, it had a turnover of USD260
million.
For the future, Sinokor remains optimistic, but at the same time it realizes that
long-term profitability and security does not necessarily lie in the intra-Asian trade lanes.
Lee explained: "The South Korea/China market is instable, and we need to focus on other
routes. But, to do this we need good partners. This is not easy because of the mutual
differences in both culture and commercial policies. We tried joint ventures in the past,
but they failed because each of us wanted to call at different ports. For the moment, we
will reduce our service scope and wait for the charter market to stabilize. Then, we will
start introducing new services. We may venture into the transpacific trade. Smaller ocean
carriers like us do have a vision to enter into these major trades. It is not just a dream - it
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5. Using evidence from the text and your own knowledge say what influences freight
rates.
6. Speak on the current situation in the world shipping.
Part 1
Unit 9
THE
UNDAMENTALS
OF INSURANCE
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UNIT 9
THE FUNDAMENTALS OF INSURANCE
290
There are various losses which people or businesses can insure against:
- theft – someone stealing their goods or possessions
- damage from fire or other natural disasters such as floods, earthquakes and hurricanes.
If property is stolen or damaged, the person or company who is insured makes a claim –
requests compensation – from the insurer. The insurer will then indemnify or compensate them:
that is, pay them an amount of money equivalent to the loss.
VOCABULARY
loss (es) - убыток (убытки)
predictability of losses - предсказуемость убытков
redistribute (losses) - перераспределять (убытки)
exposure to loss - риск возникновения убытка
insurance pool - страховой «пул», страховое сообщество, общий фонд
страховщиков
premium - страховая премия
insured - страхователь, застрахованный
uncertain loss - неявный убыток
insurer - страховщик
policy - страховой полис
loss of or damage to property - потеря или ущерб имущества
personal injury - травма
make a claim against smb. for - предъявлять иск к кому-л. о чем-л.
smth.
indemnify - возмещать убытки, компенсировать -
compensate
COMPREHENSION QUESTIONS:
1) What is insurance protection?
2) How can losses be predicted?
3) What is basic to an insurance system’s operation?
4) What does the insured receive in exchange for the payment of the premium?
5) Why are people willing to pay an insurance premium?
VOCABULARY PRACTICE
Through the operation of an insurance system, losses can be predicted before they occur.
In exchange for the payment of the premium, the insured receives a promise from the
insurance system to be compensated in the event of a loss.
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People are willing to pay an insurance premium to be relieved of the uncertainty about a
loss.
TEXT TO TRANSLATE:
78. Royal Insurance
(a leaflet offering insurance for a home and its contents)
At Royal Insurance we believe in offering careful householders both buildings and
contents insurance at the best possible price. After all if you take steps to protect your home it's only
right that we, as one of Britain's leading household insurance companies, should recognise such
care by using the fairest, most accurate premium assessment system available today. Your quotation
will be tailor made for you - taking into account where you live and size, type and age of your
home.
For many householders the premium could be less than that charged by their present
insurer.
Fast and fair settlement of claims.
At Royal Insurance our professional friendly staff will ensure not only that your claim is
dealt with promptly but also without unnecessary argument. After all you want your claim settled
without problems and delays.
Real peace of mind from one of the UK's largest insurance companies.
You can enjoy peace of mind knowing that your home and its contents are protected by a
company who have been providing insurance expertise for over 150 years and whose customer
service is second to none - something appreciated by over one million householders who have
trusted Royal Insurance to look after their home.
Easy to understand and simple to buy.
At Royal insurance we ensure that you know exactly what your insurance covers you for.
As for buying a policy from Royal Insurance, nothing could be more straightforward, you will
almost certainly qualify if you can tick yes to the questions below. Then complete the coupon and
post it to us FREEPOST (you don't need a stamp) or call us on FREECALL 0500 223344 and we
will send you a free quotation by return of post.
New for old cover.
Many insurance companies will only pay you the original cost of the items for which you
make a claim. With Royal Insurance, however, you enjoy peace of mind with new for old cover.
This means that we'll replace items claimed for at today's prices, if they cannot be, economically
repaired. No reductions will be made for wear and tear, except for clothing, household linen and
pedal cycles.
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Extra customer care 24 hours a day, 365 days a year.
FREE 24 hour helpline mid emergency repair service. Should you unfortunately suffer an
emergency like a burst pipe or tiles blown off your roof, simply call our FREEPHONE 24 hour
emergency number, any day of the year. We will provide practical help from a competent local
tradesman and we will pick up the bill up to 150 for each call out necessary.
VOCABULARY:
property insurance - страхование имущества
VOCABULARY CHECK
1) Страховая компания сделает все возможное, чтобы клиент точно знал, что
входит в страховое покрытие, если он застрахует свое имущество у них.
2) Вы можете получить страховой полис (заключить договор страхования) в Royal
Insurance, если Вы ответите «да» на шесть вопросов в анкете.
3) Если Вы вышлете купон или позвоните в нашу страховую компанию, мы
бесплатно пришлем Вам наши тарифные ставки.
4) Royal Insurance обеспечивает покрытие «новое вместо старого» в случае, когда
Вы предъявляете претензию в отношении утерянных или поврежденных предметов.
5) Некоторые страховые компании выплачивают лишь первоначальную
стоимость имущества.
6) Компании, занимающиеся страхованием личного имущества, разработали
систему оценки страховой премии.
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SECTION 2 UNDERLYING PRINCIPLES
LEAD-IN
It is sometimes said that insurance is like gambling. In betting, for example, one gives a
sum of money to a bookmaker who agrees to pay out on the bet if the horse one has backed wins the
race. The law however has found a means of distinguishing between gambling contracts, which it
will not enforce, and insurance contracts, which it will. For a contract to be one of insurance the
insured person must have an insurable interest in the subject matter of the insurance. That is, he
must stand to lose financially if the event insured against happens. In life insurance, for example, a
man or woman obviously has an interest in his or her own life and can therefore insure it and also
the life of a husband or wife. But one cannot insure the life of anybody else unless their death
would result in financial loss to oneself. Similarly, with property, insurance may only be effected if
one stands to lose financially by its loss or destruction. Clearly the owner of the property would lose
but so also might other people, such as a building society which has lent money on the security of a
house or dry cleaner who has taken in clothes for cleaning.
Further, in insurances on property or against liabilities the law applies the principle that
the policyholder must not make a profit if the event insured against happens. The insurance contract
is said to be one of indemnity, to make good the insured's loss and no more. Suppose, for example,
that property is insured for more than its value and is destroyed as a result of an event insured
against. The insured's recovery will be limited to the actual value. Again, if the property has been
insured twice over and is destroyed, the insured will not be entitled to recover in all more than its
total value. And if insured property is destroyed in circumstances which give the insured a right to
claim both against his own insurer and against some other person who was responsible for the
damage, the insured must allow the insurer to have the benefit of the right to claim against the other
person.
Contracts of insurance form a special class of contract in that the law requires both parties
to them, the insured and the insurer, to exercise the utmost good faith towards each other. In
particular when anyone applies for insurance (he is known as the proposer) he must tell the
prospective insurer every fact that he knows or ought to know which would influence a prudent
insurer in deciding whether to grant the insurance and, if so, on what terms. To take an example, a
proposer for life insurance must reveal if he has recently had a heart attack as this may be a sign that
he is more likely to die prematurely. Similarly if a motorist is seeking to insure his car and has had a
number of recent road accidents he must reveal that fact so that the insurer can decide whether to
charge him an above-normal premium because he appears to be especially prone to accidents. If any
fact of the kind described is not disclosed by the proposer or if any fact is misstated, even
unintentionally, the insurer is entitled to refuse to pay a claim under the policy. Insurers maintain
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that this is only right because the proposer knows the facts and the insurer does not. The insurer
needs to be put in a fair position to decide whether to accept an insurance and on what terms.
Insurance companies have to invest the money they receive from premiums. Like pension
funds, they are large institutional investors that invest huge sums in securities, especially low-risk
ones like government bonds.
The largest insurance market in the world is Lloyd’s of London. This is an association of
people called underwriters, who guarantee to indemnify other people’s possible losses. Lloyd’s
spreads risks among a number of syndicates: groups of wealthy individuals, commonly known as
‘names’. These people can earn a lot of money from insurance premiums if the clients never claim
for compensation, but they also have unlimited liability or responsibility for losses.
If insurance companies consider that they have underwritten too many risks, they can sell
some of that risk to a reinsurance company. This is a company that will receive some of the
premium and also bear, or take, some of the risk.
VOCABULARY
insurable interest - страховой интерес
subject matter of - предмет, подлежащий страхованию
insurance
life insurance - страхование жизни
property insurance - страхование имущества
liabilities - ответственность
policyholder - держатель страхового полиса
the event - страховой случай
indemnity - возмещение (убытков)
the insured's recovery - страховое возмещение
claim against smb - заявить о возмещении (убытка)
utmost good faith - принцип взаимного доверия
proposer - потенциальный страхователь
Lloyd's Лондонский Ллойд: ассоциация страховщиков
underwriter - страховщик (часто морской, член ассоциации страховщиков
"Ллойд")
reinsurance - перестрахование, вторичная страховка
COMPREHENSION QUESTIONS:
1) Why is insurance sometimes compared with gambling?
2) What is the difference between gambling contracts and insurance contracts?
3) What is an insurable interest?
4) What does the expression “to exercise the utmost good faith towards each other”
mean?
5) When is the insurer entitled to refuse to pay a claim under the policy?
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VOCABULARY PRACTICE
For a contract to be one of insurance the insured person must have an insurable interest in
the subject matter of the insurance.
The insurance contract is said to be one of indemnity, to make good the insured's loss and
no more.
According to the insurance contract the insured and the insurer must exercise the utmost
good faith towards each other.
A proposer for life insurance must reveal if he has recently had a heart attack.
The insurer needs to be put in a fair position to decide whether to accept an insurance and
on what terms.
TEXT TO TRANSLATE:
79. Insuring for the future?
Lloyd's is trying to make its business practices as sleek as its building. But will that be
at the expense of the characteristics that make the market so distinctive?
“IF YOU had to invent an insurance market, you'd never invent Lloyd's,” it is often said of
the 316-year-old London-based institution. Lloyd's is most famous for almost going bust in the
1990s at the expense of the individual “names” who used to provide its capital. Lately, however, it
is showing signs of having made a remarkable recovery. It reported profits of £1.9 billion ($3.1
billion), more than double the previous year. And its reputation is riding high. Not only did it
willingly pay huge claims after September 11th, but also it expects to have no trouble riding out the
succession of hurricane-related claims currently battering the insurance market. Its final payout for
hurricane Charley, for instance, was a modest £300m or so, hardly enough to dent a market that has
annual underwriting capacity of £15 billion, almost half of which is directed to the reinsurance
business.
Lloyd's new-found health is galvanising its bosses, who think the market can do even
better if only it will shed some of its quirkier characteristics and embrace modern technology and
business practices. Nick Prettejohn, chief executive since 1999, talks of changing the behaviour of
the whole enterprise: “We're trying to make up for an awful lot of lost time.”
A brief walk round the market suggests he is right. Despite its modern setting, Lloyd's is
replete with traditions. Brokers still march around with bulging folders of documents as they seek to
place business. Encouraging them and underwriters to make better use of electronics is only one of
several big changes Mr Prettejohn has in store. He rattles off eight priorities, ranging from the
adoption of annual accounting (Lloyd's has traditionally reported results with a delay of three years)
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to obtaining more licences for doing business round the world and getting easier treatment on
reinsurance from regulators in America. The most important of all, however, involves improving
the performance of the 66 underwriting syndicates that inhabit Lloyd's. “People should be able to
demonstrate a well-argued business plan,” he insists.
If that seems an unremarkable goal, then consider that Lloyd's is not a company, but a
highly unusual market. Its syndicates are mostly backed by big insurers, which have their own chief
executives and announce their own results. Despite competing against each other, the syndicates
also report to the centre, which pools some of their risk. In this sense they form a unique structure—
a “voluntary, mutual, capitalist society”, in the words of Graham McKean, chairman of Ballantyne,
McKean & Sullivan, a firm of brokers.
Indeed, Lloyd's barely squeaked into the modern era. Between 1988 and 1992 it lost £8
billion as claims poured in from litigation in America about asbestos and pollution cases, as well as
from a string of disasters. The names who provided the market's capital had unlimited exposure to
Lloyd's risks. More than 1,500 of these (out of 34,000) were financially ruined. They sued for
negligence, which had indeed appeared rampant. To save itself, Lloyd's embarked on a huge
actuarial exercise. In 1996 it hived off all of the pre-1993 liabilities into a new reinsurance vehicle
called “Equitas” and managed them separately from the ongoing business. The enraged names were
offered a settlement, which most accepted.
Lloyd's breathed another day and began to change its ways. In 1994 new rules allowed
companies to invest in Lloyd's syndicates for the first time. They have since largely replaced names,
who now account for less than 20% of Lloyd's capital base. Many big insurers, such as America's
AIG or Bermuda's XL Capital, back Lloyd's syndicates. In turn, Lloyd's has internationalised, with
America providing more than one-third of premium income and Asia marked for future growth. The
theory behind the switch to corporate capital was that companies could bear losses better than
individuals. But premium rates stayed low in the late 1990s, and some companies considered
pulling out.
Stress tested
Then came September 11th. Paradoxically, the attacks helped to resuscitate Lloyd's. The
syndicates' collective bill (before receiving reinsurance payouts) ended up at around £5 billion, or
one-quarter of the total for the World Trade Centre. But Lloyd's paid up and did not collapse as
many feared—indeed, the market resumed writing terrorism cover within 48 hours of the disaster.
The huge losses from the attacks, combined with deep confusion about which insurers were bound
to which policies, helped to spur the internal agenda for change. “That tragedy concentrated
people's minds,” says Mr Prettejohn.
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September 11th also ushered in a long bull market for insurance. Lloyd's has taken
advantage and its own financial health has improved. In August it even received a long-sought
upgrade from A.M. Best, a credit-rating agency. “Lloyd's is stronger than at any time in its history,”
says Robert Hiscox, chairman of an insurer that runs one of Lloyd's biggest syndicates.
Still, Lloyd's faces lots of challenges. After three strong years, rates for many types of
insurance have recently begun to fall. Capital flooded into the industry after September 11th.
Competition from Bermuda and elsewhere is intense. The question that preoccupies every
underwriter and broker is this: will Lloyd's be able to maintain its new regime of discipline when
the market turns?
To put Lloyd's ambitions in context, consider the following: few insurers have ever broken,
or much moderated, the dramatic swings of the industry's fortunes. Insurers unfailingly pay lip
service to “breaking the cycle”; then they proceed to slash rates and write slacker policies in order
to hang on to market share. Restraint is all the harder because, unlike in other businesses, insurers
only find out years later, when claims are settled, just how inaccurate was their pricing of risk.
If only everybody would slash capacity rather than rates—ie, write less business at higher
rates when times get hard—then returns would be steadier. Or so the theory goes. But of course
insurers cannot act as an oligopoly. Even within the Lloyd's marketplace, syndicates regularly steal
each other's business by cutting rates.
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E-mail has drawbacks. First, it is not secure. Second, it is inefficient, since data are not
stored in a standard way. Far better, says Lloyd's, to create a single system that everyone can access
from their desks. This would make it faster and more secure to hammer out policies. It would also
help companies crunch numbers and thus understand their exposures better. Banks built such
systems long ago. A year ago Lloyd's hired Iain Saville, who has run such projects at the Bank of
England and elsewhere, to head its IT efforts.
Lloyd's new system, called Kinnect, is not much liked or understood. It has cost £50m, but
only a paltry number of transactions go through it. Everyone seems to have a different idea for a
better and cheaper system. A few even worry that the technology will supersede the face-to-face
exchanges between brokers and underwriters—the very essence of the Lloyd's market—though this
seems unlikely, especially for complicated risks.
As Lloyd's pours money into Kinnect and into the salaries of managers who peddle its
brand and preach the virtues of market discipline, somebody has to pay for it all. To date, Mr
Prettejohn has managed costs well. He has got rid of hundreds of staff jobs and outsourced services
such as claims processing. Better technology should bring more savings—eventually.
But Lloyd's is not a cheap place to do business. This is plain in an industry whose margins
have fallen in recent decades. Syndicates contribute 0.5% of their premium capacity towards annual
operating costs of around £170m. Lloyd's bizarre capital structure creates still more costs. To the
annoyance of some syndicate managers, the remaining names are allowed to shift their investments
around every year in an auction. This forces syndicates to re-form, and capital to be re-raised,
annually. Administrative costs pile up.
CASE STUDY:
Shop Around for the Best Car Insurance
Shopping around for motor insurance really pays. You might find a quote for half
your present premium if you just took time to make a few telephone calls.
differences in premiums of more than 100 per cent in some cases, and 30 or 40 per cent
in many. That can easily mean a saving of 100 or more. «I think that rating, overall, is
Insurers set their rates in line with their own claim's experience. So, if your
insurer has had a lot of these from drivers with your model of car, or living in your area,
299
your premiums could rise. Another insurer with far fewer claims would offer you a much
better rate.
But if your renewal is due next month, and you start to shop around now, you
cannot rely on getting the same rate in a few weeks. Premiums can change significantly
There are many loyal (or lazy) customers who renew every year with the same
company assuming that, if their premiums are rising, other companies will be raising
Unfortunately that is not necessarily the case: your insurer will have no
compunction about bumping up rates for existing customers, while a rival might be keen
to attract new business and would make you a much better offer. Most insurers will
The motor insurance market is just emerging from a period of steep price rises -
more than 20 per cent a year - to compensate for horrendous claim rates due to crime
and the recession. The industry is also changing shape as the arrival of Direct Line, the
cost-cutting, telephone-based direct insurer, and its imitators force the old giants of the
Some sections of the motor insurance industry are now murmuring about a price
war. That could be exaggerated, but companies moving into the direct insurance market
need to grab a big enough share of the market to justify the huge investment in
The easiest way to build up market share is to offer low premiums, even if that
means making a loss for the first few years. And if direct writers are lowering premiums,
So, consumers could benefit, at least in the short term. Indeed, things are looking
better for car owners than they have for some time.
If insurers want to avoid a price war, they may start trying to compete on other
factors, such as service - promising to offer smoother claims procedures, for example.
300
This appears to be the direction being taken by the latest entrant to the direct market,
Guardian Direct.
It is, however, far less easy for consumers to shop around for good service than
for low prices. The proof of good service really comes when you claim -which, with any
There can be some confusion between direct insurers and telephone brokers,
Direct insurers are those which sell only their own policies, and only directly to
the consumer over the telephone. They cut out third parties, which reduces
Telephone brokers have access to quotes from many different insurers, and use a
computer to find the lowest for you. Some of them deal with a select panel of a dozen
VOCABULARY:
motor insurance - страхование средств транспорта
301
VOCABULARY CHECK
1) Страхование – это способ возмещения убытков, которые понесли физические и
юридические лица, посредством их распределения между многими лицами (страховое
сообщество).
2) Системы страхования осуществляют перераспределение бремени убытков.
3) Все контракты страхования должны строиться на принципах взаимного доверия.
4) Желающий застраховать свою жизнь должен сообщить страховщику о
перенесенных серьезных операциях и других случаях серьезных заболеваний.
5) Возмещение при страховании жизни отличается от других видов страхования.
302
Part 2
303
Основная задача второго этапа обучения заключается в закреплении и
совершенствовании сформированных на первом этапе обучения компетенций.
Структура данного раздела учебника, его тематический ряд и предлагаемые темы
заданий направлены на развитие аналитических, системных и коммуникационных
компетенций, необходимых для выполнения тех видов профессиональной речевой
деятельности, которые определены квалификационной характеристикой выпускника по
направлению международные экономические отношения.
Чтение и письмо
Умение читать и понимать литературу по специальности.
Умение проводить творческий анализ и обобщение фактов в письменной форме.
Умение составлять рефераты, аннотации.
Умение аргументированно изложить мнение по предложенному вопросу.
Перевод
● Умение переводить документы, статьи и другие материалы по профессиональной тематике
с английского языка на русский и с русского языка на английский.
● Умение осуществлять перевод "с листа" с английского языка на русский и с русского языка
на английский.
● Умение осуществлять реферативный и аннотационный перевод.
Говорение и аудирование
Умение строить связанные высказывания репродуктивного и продуктивного характера, в
том числе с аргументацией и выражением своего отношения к полученной информации.
Умение делать сообщения и доклады на английском языке по экономической тематике.
Умение вести дискуссию в рамках профессиональной тематики.
Умение синтезировать и продуцировать вторичные тексты различного характера
(рефераты и др.).
Умение понимать публичное выступление, в том числе переданное с помощью
технических средств.
Умение использовать речевые средства убеждения в публичных выступлениях на
профессиональные темы в непосредственном контакте с аудиторией.
Умение извлекать имплицитную информацию из устного сообщения монологического
или диалогического характера.
304
Информационно-аналитическая работа
Умение работать с информационными массивами для анализа ситуации,
прогнозирования и ответственного выбора решения поставленной задачи.
Умение интегрировать специальные и языковые знания и умения, накопленные в
период обучения.
Умение самостоятельно получать знания и решать разнообразные проблемы,
принимать нестандартные решения.
305
МЕТОДИЧЕСКИЕ РЕКОМЕНДАЦИИ
306
датах, терминах и т.д. Преподаватель проверяет точность
найденных сведений, задавая конкретные вопросы по тексту.
307
ОСНОВЫ РЕФЕРИРОВАНИЯ И АННОТИРОВАНИЯ. ПРАКТИЧЕСКИЕ
РЕКОМЕНДАЦИИ
Объем иноязычной информации, поступающей в наши дни, неуклонно растет.
Полный перевод ее часто невозможен или нецелесообразен.
Другими способами обработки информации является реферирование и
аннотирование. Кроме того, реферативная деятельность обладает высоким обучающим
потенциалом. Она не только активизирует навыки различных видов чтения, а требует
действий по смысловому свертыванию текста, что, в свою очередь, приводит к
мотивированному усвоению иноязычного материала и преодолению возникающих при этом
лексико-грамматических трудностей.
Рефератом мы называем текст, пост