read an article about a computer game manufacturer, choose the correct answer
for the following vocabulary questions.
When a company changes the way it repays its debts, it is called
c) renaming 2.
A deal that you can either accept or refuse but cannot change is called
a) a raw deal
b) a package deal
c) a bum deal 3.
People who are owed money in business are called
b) a consortium
c) suppliers 4.
A company's idea of how it will make money is called its
a) equity value
b) financial backer
c) business plan 5.
Something you "did not take into account" is something you didn't
a) think about
b) pay for
c) pay tax on 6.
People who put money into a company are its
c) resources 7.
If, at the end of a business deal, you have more or less the same amount
of money than you started with you have
a) given up
b) hit back
c) broken even 8.
Another word for "promise" is
c) acquisition 9.
Something that guarantees a loan is called
a) a mortgage
b) a valuation
text and answer the following questions.
1. What was wrong with Cyberlink’s
2. In which three areas can Cyberlink not compete with its main
3. According to the article, what is one of the dangers of
having a hi-tech business?
computer game manufacturer, Cyberlink, finally closed down its last two
offices yesterday and called in the receivers. The news came as a shock to
many city analysts who were expecting the company to arrange a refinancing
package with its creditors.
Cyberlink was founded in 1998 by British-born IT whiz-kid Sammy Lee, who
dropped out of university early to develop revolutionary computer game
software and hand-held gaming consoles. Despite early successes and a
strong international following from hardcore gamers, the company's
business plan did not take into account that most people were looking to
Sony and Microsoft for their gaming needs.
Cliff Western, head of the banking consortium which was Cyberlink's main
backer announced yesterday "Market research now shows that most people
don’t want to pay more money for a product they haven’t heard of.
Cyberlink simply cannot compete with the two market leaders in product
promotion, marketing or price."
Mr Western also pointed out that the consortium had always considered
Cyberlink to be a speculative investment, and he mentioned that the
consortium had played it safe by making an equivalent investment in
Blackmans, a larger, more mainstream company which manufactures gaming
hardware. On balance, Mr Western thought that the consortium would break
Sammy Lee complained that the company had been badly hit by an unexpected
drop in its share price, which had made it very expensive for the company
to take on new debt by pledging equity as collateral. Recent months have
seen the share price of the company fall from a high of $1.98 per share,
to yesterday's low of 23 cents.
Because the company has got almost nothing that creditors can sell, they
have no way to get their money back again - another example of the dangers
of trading in the hi-tech sector.
text again and decide if the following statements are true or false.
1. Cyberlink was not expected to close.
2. Sammy Lee did not finish university.
3. Cliff Western worked for Cyberlink.
Consumers thought that Cyberlink’s products were of inferior quality to
other leading brands on the market.
Blackmans is the name of another company which Cliff Western’s banking
consortium invested in.
banking consortium will lose money on their investment in Cyberlink and
Finance = A discipline concerned with
determining value and making decisions. The finance function allocates
resources, which includes acquiring, investing, and managing
resources. Financial analysts = Also called securities analysts and
investment analysts, professionals who analyze financial statements,
interview corporate executives, and attend trade shows, in order to
write reports recommending either purchasing, selling, or holding
various stocks. Financial intermediaries = Institutions that provide the market
function of matching borrowers and lenders or traders. Financial market = An organized institutional structure or
mechanism for creating and exchanging financial assets. Financial objectives = Objectives of a financial nature that
the firm will strive to accomplish during the period covered by its
financial plan. Financial plan = A financial blueprint for the financial future
of a firm. Financial planning = The process of evaluating the investing
and financing options available to a firm. It includes attempting to
make optimal decisions, projecting the consequences of these decisions
for the firm in the form of a financial plan, and then comparing
future performance against that plan. Financial risk = The risk that the cash flow of an issuer will
not be adequate to meet its financial obligations. Also referred to as
the additional risk that a firm's stockholder bears when the firm
utilizes debt and equity.
Investments = As a discipline, the study
of financial securities, such as stocks and bonds, from the investor's
viewpoint. This area deals with the firm's financing decision, but
from the other side of the transaction.
Investment bank = Financial intermediaries who perform a variety
of services, including aiding in the sale of securities, facilitating
mergers and other corporate reorganizations, acting as brokers to both
individual and institutional clients, and trading for their own
accounts. Underwriters. Investment decisions = Decisions concerning the asset side of a
firm's balance sheet, such as the decision to offer a new product. Investment management = Also called portfolio management and
money management, the process of managing money.