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current assets – assets which can be consumed or turned into cash (stock, raw materials, book debts (syn. circulating assets)

stock – a store of goods or raw materials debtors – a person owing money to another

liabilities – an amount of money owed by a business to the supplier, lender, etc. current liabilities – debts that must be paid within one year

long term liabilities – money that must be paid after more then one year accruals – continual increase and growth

creditors – a person or business to whom another person or business owes money net assets – difference between assets and liabilities (excess of assets over liabilities)

provision for tax – setting aside (keeping) money (reserves) for tax that the company will probably have to pay

give priority – deal with what is the most important first, consider smth that needs attention before others

statement of account – a document sent regularly to a buyer who has an account with a particular seller, showing the dates of invoices sent to the buyer, the dates and amounts of payments made and the total that must be paid

open account (charge account, credit account) – an arrangement by which the customer can buy goods up to an agreed value every month and is allowed to pay for them at the end of an agreed period

meet orders – fulfill orders

withdraw credit facilities – to remove, to take back; to cancel credit agreement

hard currency – currency that keeps its value or whose value increases in relation to other currencies, and is used for international payments

Nigeria’s debt crisis and government measures to reduce imports are creating problems for Star-Line Jewellers. The company is having difficulty making payments abroad. Its foreign trade debts are rising. Essil d’Or of Paris, one of Star-Line’s main suppliers, is showing concern.

Θ Star-Line’s accounting year ends on the 31st March. The annual accounts indicate the company is still having difficulty making payments abroad. According to the accounts, Star-Line now owes Essil d’Or $151732 – an increase of $133606 in three months.

102

Read the accounts for the current year.

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Θ Exercise 1. These are Star-Line’s accounts for last year. Listen to the recording and write in the missing figures.

Exercise 2. Compare last year’s figures with the figures for the current year. Tick the correct box ( √ ).

Turnover

a)is up on last year

b)is down on last year

c)is about the same as last year

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Net profit

a)has gone up since last year

b)has gone down since last year

c)is about the same as last year

Capital reserves

a)have increased since last year

b)have decreased since last year

c)are about the same as last year

Current assets

a)are up on last year

b)are down on last year

c)are about the same as last year

Net assets

a)have risen since last year

b)have fallen since last year

c)are about the same as last year

Gross profit

a)is higher than last year

b)is lower than last year

c)is about the same as last year

Exercise 3. Make the conclusion about company’s current financial situation.

Θ Star-Line can apply to the Central Bank of Nigeria for the extra foreign currency it needs, but it must first have an import licence. The company has applied for a licence, but there are delays. «We are giving priority to imports of essential raw materials, machinery, and agricultural equipment » officials at the Ministry of Commerce explain. Early in

April, Star-Line receives this letter.

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Read the letter.

Essil d’Or

5 rue de la Paix

75001 Paris

Tel (+331) 47208898

Telex 26172 Essil

Fax (+331) 47204128

Mr. Johnson Odusanya

Managing Director

Star-Line Jewellers Nigeria Ltd.

17 Falomo Shopping Centre

Ikoyi Island

Lagos Nigeria

Dear Mr. Odusanya

I enclose an up-to-date statement of your account. I note that in spite of previous requests, several items remain long overdue.

As you know, our open account terms are payment in full within 30 days of date of invoice. Over the past months, we have continued to fulfil your orders because you have always settled your accounts satisfactorily.

However, in view of the present situation, I now have to advise you that Essil d’Or cannot meet your April order, or any subsequent orders, until all outstanding sums have been paid in full.

I also have to advise you that unless your payment is received within 14 days of the date of this letter, Essil d’Or will withdraw credit facilities from your company.

Yours sincerely

Christine Calvet

Export Sales Manager

Encl : 1

Θ Now listen to recorded extracts from the letter.