Unit 7 Money matters
7.1 Dealing with figures
7.1 C
LVMH, the French luxury goods group which owns a string of prestige brand names
ranging from Louis Vuitton luggage to Hennessy cognac,
saw net profits rise by 7% to FFr 1.29 b n $239 million from FFr 1.21 billion
in the first half of the year in spite of the downturn in luxury products industry.
The group saw overall group sales in the first six months of this year rise by 4.5% to FFr 9.68 billion from 9.2bn in the same period last year.
Operating income showed a marginal increase to FFr 2.35 billion from 2.34bn.
Wines and spirits, which have borne the brunt of the economic slowdown,
suffered a fall in sales to FFr 4.44bn from FFr 4.76 billion,
while operating profits slipped to FFr 1.26bn from 1.51bn.
Luggage and leather products were also affected by Japan's instability,
but managed to increase operating profits to FFr 890 million from 827m on sales up to FFr 2.33bn from 2.15bn.
Perfumes and cosmetic benefited from the launch of Dune,
a new Christian Dior fragrace,
and Amarige, under the Givenchy umbrella.
Sales rose to FFr 2.54 bn from 2.05 billion and operating profits to FFr 330m from 321 million.
LVMH earlier this week relaunched Miss Dior, one of its classic scents.
And that is the ends 7.1 C.
7.4 Letters of Credit
7.4 B
Speaker...So now, on the ...on the subject of letters of credit,
now you'd be surprised at the kind of mistakes people make when using letter of credit documentation.
Er...these errors can often lead to rejection o...on the first presentation.
The research department of our bank found that 25% of the documents were rejected.
Yup, and the main reasons were things like the fact that the letter of credit had expired,
or the documents were presented after the period stated by the letter of credit ,
or of course, the shipment was late.
Now, if you think about it, it's quite amazing really.
But I can't stress enough the need for consistency between the different documents.
I mean, for instance, our bank study found out that spelling inconsistencies or mistakes are part of the problem.
That is, the description or spelling of goods on invoices was different from that in the letter of credit.
Or the weights were different on the export documents.
And then the amounts of money value shown on the invoice and the bill of exchange differed too.
Even the marks and numbers were found to be different.
Then, now, another thing we found was that the amount of money mentioed on the letter of credit was smaller than the value of order.
Or the shipment was short.
Then you might even find that some socuments were missing which were called for in the documentary letter of credit.
And we even had cases where signatures had not been witnessed as reqired for certain documents presented.
Or else facsimile signatures were used when they're not allowed.
And this is by no means the end of the list,which goes on and on-I son't bore you any more.
So, you see that many of the documents presented along with letters of credit were rejected on their first presentation
and this meant sometimes long delays in payment with all the complications that can involve.And I don't need to tell you that...
And that is the end 7.4 B.
7.5 Chasing payment A
Becker: Hello. Becker here.
Santimelli: Good morning, Mr Becker! This is Valentina Santinelli.
I'm sorry to ring you like this.
Becker: Ah, that's all right.
Santinelli: Did you receive our January shipment?
Becker: Yes, we did.
Santinelli: When did it arrive?
Becker: Er...it arrived on the ...25th of January.
Santinelli: Are all the things you ordered included?
Becker: Yes, thank you, yes.
Santinelli: Did you get the invoice as well?
Becker: Yes...yes.
Santinelli: And, er, have you paid the invoice for the last shipment yet?
Becker: I'm afraid we haven't managed...
Santinelli: Because I haven't a record of the payment
and our department was just getting a bit worried about it.
Becker: Yes, money is very tight at the moment, you see.
Santinelli: Of course.
Becker: I'd like to ask for an extension of credit.
Santinelli: Ah.
Becker: You see, we have a considerable overdraft.
Santinelli: Mmhmm.
Becker: And our overheads have to be thought about.
Santinelli: I see.
Becker: A major problem is that our own customers are going through a difficult period too.
Santinelli: Yes, I know how that is.
Becker: We have a number of outstading accounts ourselves, so we know exactly how you feel.
Santinelli: Hm, yes.
Becker: We're hoping that our bank will show us some generosity and allow us to overdraw our account.
Santinelli: Well, I hope so as well...
Becker: And, er, what's more we have just guaranteed one of our major clients
an extra two weeks' credit and...er...they've accepted our offer.
Santinelli: Really?
Becker: And as if that isn't enough,
we have a large crisis on our hands with another customer who owes us a lot of money.
Santinelli: Yes, I think I know what you mean.
We have a similar problem.
Becker: They've just gone bankrupt.
Santinelli: Oh dear.
Becker: Yes, so what do you suggest we do about the money we owe you?
Santinelli: Well, please try and send the chenque before the end of the month.
That's one more week.
Our accounts department is considering changing the conditions of payment for future orders otherwise.
Yes, we...we will do our best.
I hope we can continue to co-operate together.
Becker: Oh, I hope so too.
Santinelli: Are we hope to keep you as a regular customer despite any troubles you may be having.
Becker: Thank you very much for being so understanding Goodbye.
And that is the end 7.5 A.