This is the Cambridge International Certificate in Financial English, Sample Test tapescript 2006. 
Extract One.You will hear a financial analyst talking on a radio programme.You now have fifteen seconds to look at the questions before you listen.F: Any cynic – and you can spot them from afar; they call themselves realists – will tell you that there is no such thing as a true merger. There is the pursuer and the pursued, the predator and the prey. To put it politely, there’s always a dominant partner in every corporate deal, even if it’s styled as a merger. In today’s programme, we identify Europe’s top takeover targets. Quantitativeanalysis will lead us to a consideration of capital performance, cash reserves and debt. The qualitative aspect is essentially the word on the street.    The merger and acquisitions departments of Europe’s banking community are rubbing their hands with glee at the prospect of some major crossborder deals at last. They are, of course, hoping to drum up some business, and they may just well be right. But one thing is certain, Europe needs some cross-border activity. Scaling up is a necessity if Europe’s big businesses are to compete with their US counterparts on a global basis. Now you will hear the recording again. 
1 What is going to be the focus of today's programme?A measuring the performance of companies before mergersB identifying the companies most likely to be involved in mergersC analysing why financial institutions are encouraging mergers
2 What is the speakers view about the prospect of more cross-border mergers?A She has an open mind about how well they will work.B She doubts that there will be as many as people think.C She regards them as a positive development at this time. 

Extract Two.You will hear an accountant asking an IT consultant for advice about software packages.You now have fifteen seconds to look at the questions before you listen.M: So for me setting up as an accountant, an existing software package that’s been tailored to my particular needs would be a good investment, wouldn’t it?F: Well I’d advise against it. Of course, specifying and designing the program takes time, but this may or may not be a problem for you. The major drawback, though, is that while the original product goes through a series of trials, to ensure that it does the job it’s setting out to do, this isn’t the case with the tailored elements of the package. Something else to consider is that you probably won’t get specific training materials with the tailored elements, though I understand you’re sufficiently computer-literate to cope with that.M: But surely if you pay enough …F: You’re assuming that the producer is willing to modify the software to meet your specific requirements – when actually it’s in their interest to sell a standard product. It isn’t so much a question of the profit margin on the tailored software: they have to consider the problems of ensuring that future upgrades work properly in your system – because they’re trying to reducethe number of versions they support, not increase them. Now you will hear the recording again. 
3 Why does the consultant advise the accountant not to buy a tailored software package?A The lack of training materials will cause him problems.B Some parts of the product will not have been tested.C Development of the software is likely to take too long.
4 According to the consultant, why do producers dislike tailoring software?A It may be difficult to provide adequate technical support.B The profit margins are lower than on standard software.C Tailored software is too expensive for most potential customers.

Extract Three.You will hear an accountant giving advice to a group of people who are thinking of starting small businesses.You now have fifteen seconds to look at the questions before you listen.M: Now you’ll almost certainly need the services of an accountant before you start your business, so this is a priority from the outset. So how do you go about identifying one? You’ll need a firm which has experience of the sector in which you’re going to be operating. Their website may tell you this, but it may not tell you much about their reputation – and you need to check this out. The institution that is backing you financially will certainly have a view, so it’s crucial to ask them. And you may be able to confirm that view through other third parties such as former clients. 
I’d say it’s well worth investing time in finding the right firm and this may involve getting in touch with half a dozen, and maybe making an appointment with, say, three of them. My advice would be to approach firms which are small in size like the one you’re thinking of setting up – they’ll be more likely to understand the issues and problems you face. Tell them what you’re planning to do and ask for their comments on your business plan if you’ve got one. You’ll need to discuss fees, and remember, find out who at the firm you’ll be dealing with, because it may not be the person you’retalking to – and that could make all the difference. Now you will hear the recording again. 
5 The speaker says that the most important source of information about the reputation of an accountancy firm isA the internet.B the firm's previous clients.C financial institutions.
6 In the speaker's opinion, new small enterprises should begin by approaching accountancy firms whichA are similar in scale.B offer free help with business planning.C are able to provide a personalised service.

Part 2.You will hear a conversation between two colleagues, Mark and Julia, about a seminar on Intellectual Property (IP) Rights which Julia has attended. For questions 7-11, choose the best answer (A, B or C). You will hear the recording twice. You now have 45 seconds to look at Part 2.
M: Julia, so, how was the seminar?F: Very good – the speaker, Dr Andreotti was talking about Intellectual Property in businesses –M: Sounds interesting – but how relevant is it for most of our work?F: Well, as I listened to him, I realised that intellectual property concepts are relevant in every modern business …some companies, for example, in terms of fixed capital assets such as land and equipment are worth virtually nothing, but if you look at their ideas and know-how, they have very high value. The problem is that you have to know where the know-how is located, so to speak.M: Well, in people – in its staff, I suppose.F: Yes, I can see why you say that – if a key researcher leaves a company, you’d think its IP value would reduce. But now I realise that IP really resides in systems – in clear documentation and transmission of knowledge.M: Right ..but how do you measure IP value? Doesn’t it change all the time? I mean an IP valuation is most needed for company acquisitions, I suppose?F: Well actually, the speaker said that acquisitions aren’t really the main reason for wanting to establish IP value– not for Stock Exchange flotations either. At the moment it’s being asked for mainly when company backers want to withdraw and realise their investment.M: Really … and what about debt serving companies – do they recognise IP as good collateral?F: Well, the speaker had done a survey on this and found that finance providers will lend whatever amount is required to companies with IP assets, although they do tend to charge an additional amount to do a more searching audit. (pause) And of course companies with high IP assets are atrisk of losing their unique ideas to their competitors. M: But doesn’t existing trademark and copyright legislation offer some protection?F: Although they are theoretically comprehensive, it seems that there’s difficulty in using the current laws when companies are trading on ideas rather than tangible things. It can involve a long and painful process through the courts as people try to make use of the legislation.M: So what was his main point ..?F: The overriding message was that in the new economic climate, intellectual property is key, but that it’s not just a question of protection but also of showing market value …a protected idea with no proven sales value is useless.M: Mm, yes I can see that.Now you will hear the recording again.
7 According to Julia, the best way for a company to maintain high IP value is by A retaining its best staff. B setting up good internal systems. C having a flourishing research culture.
8 According to the seminar speaker, an IP valuation is most often requested when A people want to sell their stake in a company. B one company wants to take over another. C a company wants to float on the stock exchange.
9 According to the seminar speaker, what tends to be the attitude of financiers to companieswith IP assets? A They charge them much higher interest rates on loans. B They avoid lending them large amounts of money. C They carry out more thorough checks before lending to them.
10 Julia believes that existing trademark legislation is not helpful with IP because A it hasn't been updated. B it is restricted to other types of company assets. C it is difficult to enforce.
11 Julia says that the main message of the seminar was that companies should ensure thatthey bothA develop new ideas and protect established ones.B protect an idea and demonstrate its marketability.C protect IP assets and more tangible property. 

Part 3.You will hear the chairman of a hotel and entertainment group giving a talk about the group’s performance in the last year. For questions 12-20, complete the sentences using up to three words.You will hear the recording twice. You now have one minute to look at Part 3.
M: Good morning, everyone, and thank you for coming. I’ll start by giving you a brief survey of the Roxford Hotel and Entertainment Group’s performance last year. On the positive side, Group profit before taxation increased by 41 per cent to £383 million, with earnings per share up by a record 52 per cent. I’m pleased to be able to announce a final dividend of 9.6 pence, which represents an increase of 7.6 per cent on the previous year.     In the hotel division, the year saw operating profit rise by 17 per cent to £171 million, as the recovery in overall trading which began two years ago continued. Underlying profit increased by 20 per cent, compared with only 5 per cent the year before.    Although this is a considerable improvement, the figure is somewhat disappointing, as we had hoped to achieve a rise of 25 per cent. The shortfall resulted from several negative factors. The most significant of them was that for much of the year, exchange rates were less favourable to usthan in recent years. Clearly this is something beyond our control, but fortunately we’ve benefited from the trend of the past two months.     A further negative factor was the fact that the entertainment division saw operating costs edge upwards last year, although these were partially offset by cuts in the workforce and the closure of some less profitable venues. This increase was necessary because of the extended opening hours in a number of new entertainment venues, as part of our efforts to promote them and attract a wide range of customers. However, we fully expect that the profits from those establishments will more than compensate, once they’re well established.     Turning now to our assets, our major investment last year was in launching a new chain of hotels. Unlike our existing establishments, which are mostly four star, these are in the budget category, and we intend to situate them close to major routes throughout Europe. The first ones opened late last year, in Britain and France, and early indications are very encouraging.    As for our established hotel chain, a thorough assessment of our UK properties revealed that 11 of them needed considerable capital investment to bring them up to the high standards that we’ve set ourselves. We therefore decided to stop managing these 11. Six were sold, and the otherfive leased to tenants, providing the Group with a steady income and incurring no additional expenditure. Our remaining 35 hotels in the UK were refurbished, at considerable cost. We also started a rolling programme to enhance the catering in those hotels, introducing new menus which use top quality ingredients. The response from customers has been positive, with turnover in the hotel restaurants rising by 12 per cent.    Measures were also taken to improve staff retention, which was low in comparison with the hotel sector as a whole. Our aim is to equal the industry norm by the end of this year, and exceed it within two years. Now I’ll turn to the entertainment division…    Now you will hear the recording again. 
RESULTS12 In the Roxford Group as a whole, positive outcomes included significant increases in pre-tax profits, earnings per share and the ÖÖÖÖÖÖÖ...ÖÖÖ .13 In the hotel division there was a continuing ÖÖÖÖÖÖÖÖÖÖÖÖ.ÖÖÖÖÖÖÖÖÖÖÖ in trading.Negative factors:14 The Group suffered from unfavourable ÖÖÖÖÖÖÖÖÖÖÖÖÖ......ÖÖÖ.ÖÖÖ for most of the year.15 There was a slight rise in ÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ.ÖÖÖÖÖÖ. in the entertainment division.16 There were longer .ÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ...ÖÖ.. in some entertainment venues.CHANGES IN ASSETS:17 A new chain of ÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ....Ö... hotels was set up.UK Hotels:Six UK hotels were sold.18 ÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ.... were found for five hotels.The remaining UK hotels:Thirty five hotels were refurbished.19 ÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ.Ö.ÖÖÖ.. was improved by making changes to menus.20 Efforts were made to bring ÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖÖ. up to the industry norm. 


Part 4.You will hear five short extracts in which five different people are talking about books on accountancy. For each extract there are two tasks. For Task One questions 21 to 25, choose from the list A to F the reason each speaker gives for buying the book. For Task Two questions 26 to 30, choose from the list A to F, the outcome for each speaker of reading the book. You will hear the recording twice. While you listen you must complete both tasks. You now have 40 seconds to look at Part 4.
Speaker 1I wasn’t keen to buy the book, because it was quite expensive and it seemed to focus on general tax issues, which I didn’t really need. But I’d just carried out a risk analysis to do with changes in our production system, and I was having difficulty writing it up. So when I saw that the book had a section on how to write that type of report, I bought it. Well, it’s been a tremendous help ever since. It made it clear how to select material and organise it into a logical structure, and that has saved me a lot of time – even when I’m writing letters or emails.
Speaker 2The book was first recommended to me by a colleague three or four years ago when we were preparing to present our audit report to a key client. I didn’t actually buy it then, but a couple of months ago I remembered his recommendation when we were working towards the acquisition of one of our competitors, and putting together the relevant papers. So I decided to get the book, and I haven’t been disappointed. In fact, I learnt a lot from it that I felt I couldn’t use in my present job.So I contacted a company which seemed likely to offer me greater scope, and I was taken on.
Speaker 3When I got hold of this book, last year, I more or less dismissed it because it hardly mentioned the use of computer modelling for budget projection, which I thought was pretty poor in this day and age. I’d bought it on the recommendation of a colleague, because she said it had a lot of material on tax law, which was an area I knew little about, but felt I ought to. Actually I got so interested in it that I started to work on a comparative study of legislation in certain member states of the European Union. I’m hoping that I’ll be able to get a job with the EU Commission before long.
Speaker 4My company is considering relocating our manufacturing base abroad, and a colleague wrote a report identifying some potential risks. She mentioned the possible impact on running costs, and I wanted to go into that in greater detail, which was why I bought the book. It contained a lot of very useful information, but much to my surprise I found that I’d already thought of most of the points myself. So I realised that I must be better at my work than I’d imagined. It really made me think about my position within the company, and I’ve decided to apply for promotion next time something suitable comes up.
Speaker 5I was working for an electricity company. The previous management had bought property and companies abroad, but then there was a change of strategy, and I was in a team responsible for selling them off. I needed to learn more about the potential effects on the business of doing that, so I bought this book. It’s a comprehensive guide to the roles and responsibilities of accountants working in public utilities, and was very useful, although the section on the legal aspects wasn’t as good as I’d hoped. Anyway, I decided I needed a change, and started a consultancy advising other utilities, using the knowledge I’d acquired from the book.Now you will hear the recording again.
Speaker 1 ........ (21)Speaker 2 ........ (22)Speaker 3 ........ (23)Speaker 4 ........ (24)Speaker 5 ....... (25)A　to help to develop a company tax strategyB　to help prepare documents for a takeoverC　to find out more about specific tax issuesD　to explore implications of the disposal of assetsE　to prepare a risk assessment reportF　to explore factors affecting operational costs
Speaker 1 ........ (26)Speaker 2 ........ (27)Speaker 3 ........ (28)Speaker 4 ........ (29)Speaker 5 ........ (30)A　I decided to set up my own business.B　I applied for promotion within my department.C　I learned how to complete some tasks more quickly.D　I applied for a position with another firm.E　I carried out research into a particular field.F　I gained confidence in my professional ability.


INTERNATIONAL CERTIFICATE IN FINANCIAL ENGLISHMay 2007 Transcript
Part One
Extract One.
    M: So shall we compare notes about the candidate?    F: OK.     M: Well, I felt he performed rather well. I think he’s got what it takes to be a useful member of our financial team, especially since we’re looking for someone to work on projects in partnership with our Operational Risk team. He demonstrated the skills needed for that kind of co-operation, and he’s clearly ready to take on the challenge. He’s only got the minimum amount of experience required after qualifying, of course, but he’s got potential. It’s still fairly early to say whether he’s leadership material, but who knows?    F: Mmm, well, I agree with you up to a point. I was impressed by his apparent knowledge of the kind of software we use, although we didn’t really test him out. I wonder if he’s had enough involvement in an audit environment, though – that was one of our requirements, after all, and we did ask for someone who’s had experience in risk assessments. He seemed less confident in that area, I felt, although he does clearly see his future in investment banking. And I agree he has potential …     M: Well, let’s interview the other candidate before we decide …
1 Which quality does the man think is particularly valuable in the candidate?A his potential for promotion to a leadership positionB his breadth of post-qualifying experienceC his willingness to work as part of a team
2 What is the woman’s reservation about the candidate?A He is not experienced in an audit environment.B He is not entirely confident in using their software.C He is not committed to working in banking.

Extract Two
    M: And now to our plans for the company. As you may have read in the press, we are having to lose up to 10,000 of our staff as part of our restructuring programme, aimed at improving efficiency and cutting costs. We are facing difficult times. Of course, inflation at the moment has remained relatively stable, which should be good news for us. However, it’s proving very tough to tempt consumers into buying new products, which is particularly worrying when we may have to face a rise in the costs of raw materials.    We have been working with the unions to reach a fair agreement over how many jobsshould be lost. We intend to use early retirement and voluntary redundancy packagesas much as possible.    We feel that with these changes we will emerge as a much more streamlined company. As I personally predicted, we have already reported a preliminary net profit of 1.1bn euros for last year, beating analysts’ estimates, and we are forecasting an increase in sales and operating profit, so I have no hesitation in proposing a rise in our dividend to 1.15 euros per share … 
3 What does the speaker say is the cause of the redundancies?A Consumer spending has slowed down.B The supply of raw materials has been interrupted.C There has recently been a rise in inflation.
4 What does the speaker feel about the company’s situation?A surprised that profits exceeded estimatesB confident about raising dividendsC cautious about forecasts for the future

Extract Three
    M: Sustainability issues are a core component of banking risk management, and are increasingly being recognised as potential business generators. The launch of the Sustainable Banking Awards recognises this emerging trend and the important role that banking can play in contributing to sustainability overall. These awards can be seen as one of the ways to bring sustainability into the provision of financial services. In my opinion it is no longer an optional add-on. It has to be part of every company’s strategy, and their brand.    I commend this initiative as an important contribution to the financial services industry, and on a personal level, I’m honoured to have been appointed to the panel of assessors. My firm is one of the world’s leading financial services companies, and we recognise that we have a responsibility not only to maintain but also to promote high standards in everything we do, and that includes sustainability standards for our sector. Financing economic growth, while addressing environmental and social impacts, is important to shareholders, employees and clients. We think sustainability makes good business sense and should be key to growth strategy throughout the industry.
5 The speaker says the Sustainable Banking Awards areA helpful to clients when choosing financial services.B a reflection of a development in the financial sector.C likely to change the public’s perception of financial institutions.
6 Why does the speaker have a personal interest in the Awards?A He is one of the judges for the Awards.B He proposed the idea for the Award scheme.C He has been a consultant for the Award scheme.

Part Two
    F: Tom, I’ve just had the summary of performance for Parcoe Metals Inc.    M: They’re new clients of yours, aren’t they, Fiona? How are they doing?    F: Well, I think Parcoe needs to be careful. I’ve been looking at their performance over the last two years. I suppose the most serious thing is Return on Capital Employed. Two years ago their results were satisfactory, but there was a significant decline in profitability last year to a level well below that for the sector as a whole. Fortunately there’s no sign of nervousness amongst the investors. Something to be grateful for.     M: But it must be down to more than one factor.    F: I’m still trying to work out the causes, but I’ve got a few indicators. For example, the debtors’ collection period. To me, this measurement is an important element in the assessment of the management’s control of its working capital. Parcoe’s debtor day period increased from 60 days to 65 days, which indicates that tighter controls are required here, as the period is now above the sector average. If this trend continued upward, we’d need to be assured that the company isn’t exposing itself to the possibility of bad debts. What do you think?    M: Yes I agree. And what about creditor payment period?    F: The picture is more positive here. Parcoe’s creditor payment period is typical of the sector as a whole. There was a reduction in creditor days from 75 two years ago to 69 last year with 70 days being the benchmark for the sector. Parcoe achieved it because it wisely used some of the excess cash generated from its operating activities to reduce its reliance on creditors.    M: Have you had a chance to look at operating costs as a percentage of sales?    F: Not in any detail yet, but I have discovered that there was a significant change in the relationship of operating costs to sales last year – up from 82% to 87%, which suggests that operating overheads and some other direct costs need tighter control. Parcoe’s has been going for a long time, and it may be that the company has ageing plant, and, if that’s the case, maintenance charges are probably on an upward trend. I’ll have to look at all the relevant factors and do an analysis to assess the change in efficiency.     M: Sometimes the figures for Finished Goods Stock are significant.     F: Right. I’ve been focusing on Finished Goods Stock in Days, also looking at total stocks i.e.: raw materials, work in progress and finished goods. And this looks OK. The company isn’t sacrificing liquidity by tying up excess working capital in the form of stocks. In fact, it was holding less than one month’s supply last year as opposed to the industry average of 38 days and its inventory management shows better control than that for the sector as a whole.    M: Well, that’s not too bad a picture.
7 Fiona is worried because Parcoe’s Return on Capital Employed A has fallen for the second year running. B is lower than the industry average. C will have a negative effect on shareholders.
8 What does Fiona say about Parcoe’s debtors’ collection period? A It reflects the fact that the company has some bad debts. B It has remained unchanged for two years. C It shows a need for better management of working capital.
9 What does Fiona refer to in connection with Parcoe’s creditor payment situation? A new credit control procedures B improvements in the payment period C problems in the company’s cash position
10 What does Fiona suggest as a possible explanation for the change in Parcoe’s operatingcosts? A larger bills for the upkeep of its equipment B the purchase of more up-to-date plant C a decrease in the efficiency of machine operators
11 What is the situation regarding Parcoe’s stock management?A It keeps stock for a shorter period than is usual in the industry.B It is working to reduce the quantity of goods it keeps in stock.C It intends to improve its control of inventory management. 

Part Three
    F: In this morning’s case study, we’re going to be looking at what happened when a retail chain went into administration. So let me start by giving you some background information.    Dalton’s was a British electrical goods chain that’d been a familiar name in the High Street for over fifty years, and news of its collapse came as something of a shock to employees, shareholders and the general public.     For several years, Dalton’s had been suffering from increased competition from a number of supermarkets, several of which had been following a strategy of aggressive expansion of non-food lines, including electrical goods. Dalton’s directors had made attempts to restructure the business, but without success. Eleventh-hour attempts to come up with a satisfactory refinancing plan also failed. Only a week before the collapse, four hundred staff were made redundant, in a last-ditch attempt to cut costs.    When it became clear that Dalton’s was about to default on interest payments to the banking group which was its major secured creditor, the bank appointed joint administrators from a big accountancy firm. They quickly identified a black hole of thirteen million pounds.    The administrators issued a statement announcing that all the group’s three hundred stores would close with immediate effect. Staff not only lost their jobs, but were concerned that deductions from their salaries in the previous two months had yet to arrive in the pension fund operated for the company by ISQ Insurance. This caused considerable concern, as there had been cases of money being stolen in similar circumstances when other companies had been in financial difficulties. However, ISQ Insurance gave assurances that the scheme was deposited with an external trustee, and so ring-fenced from Dalton’s collapse.    The failure of the company also prompted bitter recriminations from MacDougall Capital, the private equity business which owned Dalton’s. MacDougall had bought the business six months earlier, for thirty-two million pounds, but was now facing losses on the deal. In a statement it said that it intended to commence legal action to recover damages resulting from its acquisition of Dalton’s, by suing the company’s former directors, shareholders and auditors – that is, those from the time when MacDougall had bought the business. (pause) MacDougall claimed that inspection of the accounts for the six years immediately prior to its purchase of Dalton’s had brought to light what it referred to as gross irregularities. Compared with positive net asset value of nine point five million pounds at the time MacDougall took ownership of the business, there was a deficiency of three point seven million pounds, representing a variance of thirteen point two million pounds.However, analysts were not confident that MacDougall would recover the money it claimed to have lost.  
Case study: Collapse of Dalton’s electrical goods chainBackgroundDalton’s had been facing greater competition from some (12) ……………….. for several years.
Previous attempts to (13) ……………….. Dalton’s or re-finance the business had failed.
The collapseDalton’s was unable to make (14) ……………….. payments which were due.Staff were afraid that the (15) ……………….. that was run by ISQ Insurance would be short ofmoney.ISQ Insurance stated that the scheme was administered by a (16) ……………….. who wasexternal to Dalton’s.
MacDougall CapitalAt the time of the collapse, Dalton’s belonged to MacDougall Capital, a (17) ……………….. firm.MacDougall believed it was entitled to receive (18) ……………….. in connection with its purchase of Dalton's.MacDougall found a number of serious (19) ‘………………..’ in Dalton’s accounts.MacDougall claimed to have found a total (20) ……………….. of £3.7m. 

Part Four 
Speaker 1M: Granger is something of a dark horse in the computer industry. For years, it seemed to be an unimaginative, middle-of-the-road business, with growth in one year just as likely to be offset by contraction the following year. Yet out of the blue, it came up with an operating system for computers that really took off, and it’s made a fortune through licence agreements. On the strength of this, the company has set up several overseas subsidiaries, but I suspect it’ll only be in a position to sustain these for a limited time: my view is that its one success is the exception rather than the rule, and that it would be sensible not to invest in the company.
Speaker 2F: Fletcher Brothers is an innovative company, whose core activity is tool manufacture. I must admit it’s made some very sensible decisions. It recently found a customer for its freight business, which had been losing money for several years. This meant Fletcher Brothers was able to reduce its debts considerably. Although its stock market performance is currently among the best in its sector, in my opinion, this is an exaggerated response to past success, and I really can’t see any reason for it to continue. So I’d recommend not investing in the company. It’d be worth reconsidering the company in a year’s time though, when a clearer picture emerges of its prospects. 
Speaker 3M: One company that might be worth investing in is Markway Printing. It has a track record of consistent, and quite impressive, expansion – mainly through a merger with its major supplier and another with a High Street printing service. As a result it now sells direct to the end-user, which greatly reduces its dependence on retailers, and improves its chances of future profits. However, I’d advise against investing in Markway just yet, as it’s currently being sued by a company called Jackson. The allegation is that Markway failed to pay for permission to print with software which Jackson had patented. If Markway loses the case, it’s likely to have to pay considerable damages.
Speaker 4F: In the five years it’s existed, Alliance Steel has done quite well: it’s attracted some newcustomers, and its bottom line has shown healthy – while not spectacular – year-on-yearincreases, despite some reduction in market share. However, even though Alliance is performing well at present, the question in my mind is whether there’s a future for the company. Its competitors are beginning to feel the chill wind of falling demand, and it seems to me that Alliance has nothing to save it when other steel firms are already going under. So I’d advise against buying shares in the company.
Speaker 5M: A few months ago I might have recommended investing in Jaycourt, the furniture retailer. It’s a business with strong brand equity, which has stood it in very good stead. The home furnishing sector has been pretty static recently, but while customers have been deserting one or two of the biggest companies in favour of some of the smaller players, Jaycourt has held on to its position. On the negative side, though, rises in the prices of raw materials will soon feed through, and I really don’t think Jaycourt is in a position to pass these on to the consumer – it will simply have to absorb them. 
A It has made steady organic growth.B It has maintained market share.C It has improved its management systems.D It has achieved vertical integration.E It has sold a loss-making division.F It has made money through exploiting its rights to a patent.
A Its right to use a product is disputed.B Its new ventures abroad may be difficult to maintain.C It operates in a declining sector.D It is heavily in debt.E Its profit margins are likely to be squeezed.F Its shares are overpriced.
Speaker 1........(21)Speaker 2........(22)Speaker 3........(23)Speaker 4........(24)Speaker 5........(25)
Speaker 1........(26)Speaker 2........(27)Speaker 3........(28)Speaker 4........(29)Speaker 5........(30)

Answer keyOne mark is given for each item answered correctly. The total score is then adjusted to give a scoreout of 50 representing 25% of the total for the examination.Part 1 Part 21 C 7 B2 A 8 C3 A 9 B4 B 10 A5 B 11 A6 APart 3 Part 412 SUPERMARKETS 21 F13 RE(-)STRUCTURE 22 E14 INTEREST 23 D15 PENSION FUND 24 A16 TRUSTEE 25 B17 PRIVATE EQUITY 26 B18 DAMAGES 27 F19 (GROSS) IRREGULARITIES 28 A20 DEFICIENCY 29 C30 E