Basic Business French 8:
Financial Reporting 1

© 2015, Greg Lessard

About this module

In this module and the next, we will look at the context and the means by which businesses communicate with others. We will begin by looking at the most general level of communications in this module, and in the next we will turn our attention to financial reporting. It should be borne in mind that what we will see here is not a course on business communication as such. Rather, it is a first step in acquiring the tools you will need to interpret the documents used by businesses to present themselves to various other interested individuals and groups. By the end of this module, you should be comfortable with the following things:

The context of business

The context in which a business functions may be thought of as a sort of ecosystem, where each member of the system must function in light of the actions of all the others. The following image shows some of the major players that a business (une entreprise) must function. Mouse over each of the nodes to see the translation and some more detail.

Let us think a bit more in detail about what these relationships entail.

But before these communications with various parties happen, a business needs to have a sense of what its ecosystem looks like, including its strengths and weaknesses and the opportunities and threats it faces. It is to that that we will turn now.

A SWOT analysis

A longstanding tool used in planning is called SWOT. This term, stands for Strengths, Weaknesses, Opportunities, Threats and the acronym is used in French as well: une analyse SWOT. The following image shows the relations among the various elements. Mouse over its parts to see more details.

Internal communications: exploring a SWOT analysis

The first order of business in an organization is usually to set its goals and strategies. Among other things, this involves determining directions to follow in light of internal and external factors. Let's imagine that you are part of this process for the company YYZ which manufactures sports shoes. Your team has been charged with doing a SWOT analysis for the company. Together, you have identified a series of factors (see the list below). You now have to place them in the appropriate SWOT category. Make sure you understand each observation, then drag it into the appropriate category. If you are correct, it will stay. If not, it will slide back to its original position. There is also a Restart button you can click to begin again.

Nous avons de l'équipement assez moderne. Note personnel est relativement âgé. Il y a un marché important qui se développe parmi les personnes plus âgées. Le dollar canadien est assez bas. Les acheteurs aiment la qualité de notre produit. Les coûts du transport augmentent. Il existe un grand marché au sud. Notre personnel est content. Le nouveau gouvernement veut augmenter les taxes. Les produits naturels comme les nôtres deviennent populaires. Le marché est rempli de produits importés.
Forces Faiblesses Occasions Menaces

When you have finished the SWOT analysis, think about the best route forward for your company in light of these factors. If you are in a group, discuss this. Then develop a plan of action.

Strategic vocabulary

On the basis of the analysis of risks and benefits, an organization will often do strategic planning. This is the attempt to show the paths to and outcome of specific ways of behaving. It is important that this be shared since for an organization to succeed, all its members must share a common vision of its goals and the strategies and tactics it will use to reach them. The following tables give some of the terms used to communicate these.

*
French term English term and explanation
l'actualisation Updating: this can mean to bring something up to date, as in figures describing a situation.
l'agilité Agility: this describes the ability to react quickly to changes in circumstances: in English, agility.
l'allocation de ressources Resource allocation: applying resources to a specific project or problem.
l'analyse des risques Risk analysis: the determination of different risks and their probability and effects.
le bilan Report: this can mean a report on the current state of a project.
le budget This is the amount of resources (often expressed as money) that are required for a project.
le cahier des charges Specifications: in the context of describing the responsibilities of a supplier or some other group.
le calendrier Calendar: the various steps of a project, their relative order, and the time allocated to them.
les coûts CostsThese are the amounts (in money or other resources) needed to fulfil a project.
l'échéance Deadline. This is the date when some project must be completed.
les imprévus Contingencies. These are factors which cannot be foreseen and which might affect a project. Often funds are set aside to cover these.
un indicateur Indicator. These are bits of information which tell whether a project is on a successful path.
les livrables Deliverables. These are the things that must be achieved by the end of a project. They can be physical products or more abstract achievements like reports or states of affairs.
un marché Contract. In everyday language the word marché means market, but in project management, it is the contract to perform some action.
les matières premières Raw materials. These are the basic elements which are transformed into something more complex. For example, leather can be turned into shoes.
les objectifs Goals. These are the things one hopes to achieve.
un organisme Organization. This can be any group like a business, a government agency, or a consumer group.
la planification Planning. This is the process of laying out the steps of a project.
un prototype Prototype. This is an early model of some object to be produced.
un rapport Report. This is a document that shows what one has accomplished.
la rentabilité Feasibility or profitability. This is the measure of whether a project can be achieved with reasonable investment of resources or how much a company will make from some activity.
les ressources Resources. These are the things (money, people, time) devoted to achieving a project.

If you are interested, a much more complete lexicon may be found at methodo-projet.fr.

Communication with shareholders

Each year, corporations produce financial reports for their shareholders. These are designed to show how the corporation has done in the previous year and to show what the corporation has in mind for strategies. Most annual reports can be divided into two parts. The first is an overview of the corporation and its performance, the second (which we will see in the next module) is the corporation's accounting statements. The example below is extracted from a typical overview document. In the document, the President of Bombardier answers questions about the firm's strategies and accomplishments.

Q. Qu’est-ce qui a marqué 2014 selon vous ?

R. Deux choses me viennent immédiatement à l’esprit : nos produits et la réorganisation de nos activités aéronautiques et de transport sur rail. Nos activités ont continué d’évoluer avec de formidables nouveaux produits sur le point de passer en production. Notre portefeuille de produits existants nous ouvre de nouveaux marchés prometteurs. Enfin, avec notre structure allégée, nous devenons une entreprise plus agile et axée sur l’essentiel : nos clients et le respect des jalons de nos projets.

Nous nous sommes structurés autour de quatre principes directeurs — mettre davantage l’accent sur nos clients, être agile, penser mondial et être imputable, tout cela dans notre quête incessante de création de valeur. Aujourd’hui, chez Bombardier, il y a un objectif qui prime sur tous les autres : mieux exécuter et améliorer nos marges, autrement dit devenir une entreprise hautement performante à tout point de vue et en tout temps.

Q. Pouvez-vous nous en dire un peu plus sur cette nouvelle structure et ses avantages ?

R. Nous avons maintenant trois secteurs d’activité aéronautiques — Avions d’affaires, Avions commerciaux, Aérostructures et Services d’ingénierie — en plus de notre secteur d’activité de transport sur rail. Tous relèvent directement de moi. Cette structure plus légère et plus souple nous permet de cerner et d’aplanir plus rapidement les obstacles à l’efficacité.

Elle nous permet aussi d’être plus transparents au sein de l’entreprise et de donner aux investisseurs un meilleur aperçu de notre rentabilité par marché. Cette structure nous permettra de bénéficier pleinement de la croissance que généreront bientôt nos nouveaux produits. Elle nous permettra aussi de mieux répondre aux besoins en évolution de nos clients.

Source: Bombardier 2014 Financial Report

As you can see, this is a very high-level perspective on Bombardier. Its goal is to show shareholders that their money is being managed efficiently and that it will provide a good return on investment. As you read these paragraphs, which have not been created off the cuff but rather represent polished documents, you should see a un fil directeur, a common thread, running through them. To help you see this, read the text and answer the following comprehension questions.

Comprehension questions

  1. What are the two main changes in 2014?
  2. Answer

    Products and reorganization of aeronautical and rail divisions.

  3. What are the two main focuses for the future?
  4. Answer

    A focus on customers and respect for project milestones.

  5. The goal is to become a higher-performing company. What does this entail?
  6. Answer
    1. customer focus
    2. greater agility
    3. think globally
    4. better respect for timelines
  7. What are the three sectors of aeronautics in the new model?
  8. Answer
    1. business aircraft
    2. commercial aircraft
    3. general aeronautical engineering
  9. Who to the new divisions report to?
  10. Answer

    The president.

Correspondence with suppliers

Many corporations depend on a steady supply of parts and raw materials in order to make their products. Any delay in the sending of these, or any problems with them, can have serious repercussions. Below you will see a letter to a supplier which deals with a problem. As you will see, it takes the form of a standard business letter. Read it and then respond to the comprehension questions below. If there is anything you don't understand, check the translation below the comprehension questions.

Les Entreprises YYZ
Fabricants de chaussures athlétiques
378, rue Despins
Saguenay, Québec
A1B 2C3

Lacets Inc.
Parc industriel
Sept-Îles, Québec
Y4B 8N4

le 17 mai 2015

OBJET: Défectuosités de produit (no de commande 6438956)

Madame, Monsieur,

Je vous écris afin de résoudre un problème récent. Comme vous le savez, nous vous commandons chaque année plus de 30,00 paires de lacets que nous utilisons dans notre fabrication de chaussures athlétiques. Nous vous avons choisi comme fournisseur en 2002 à cause de votre réputation pour la qualité et depuis ce moment, nous avons été entièrement satisfaits de votre produit et de votre service.

Malheureusement, je regrette de vous informer que votre dernière livraison de lacets (voir numéro de commande ci-dessus) comprend de sérieuses défectuosités. En particulier, plus de la moitié des lacets ont des ferrets défectueux. Dans certains cas, les ferrets ne sont tout simplement pas là! Voir les échantillons ajoutés à cette lettre.

Il est évident que nous ne pourrions pas utiliser ces lacets: nos normes de qualité très élevées ne le permettraient pas. Afin de poursuivre nos relations avec votre entreprise, nous aurions besoin d'une solution à ce problème dans un avenir très proche. Nos stocks actuels de lacets vont durer au maximum trois semaines. En l'absence d'une solution très rapide, nous aurions besoin d'utiliser un autre fournisseur.

Dans l'espoir que nous pourrons résoudre ce problème, je vous prie d’agréer, Madame, Monsieur, l’expression de mes meilleurs sentiments.

Jean-Claude Dubuc
Vice-président aux opérations

Comprehension questions

  1. Who is the letter addressed to?
  2. Answer

    Lacets Inc.
    Parc industriel
    Sept-Îles, Québec
    Y4B 8N4

    This appears to be a company that sells laces (des lacets).

  3. How many laces does the company order each year, and why?
  4. Answer

    More than 30,000 pairs (plus de 30,000 paires). They are used to make athletic shoes.

  5. What is the problem?
  6. Answer
    1. In the last shipment, more than half of the laces have defective aglets (the solid part at the end of the lace: in French, des ferrets) and in some cases they are missing.
    2. The current staff didn't have the resources to fix these problems
  7. How long does Lacets, Inc. have to solve the problem?
  8. Answer

    The supply runs out in 3 weeks, so they must act quickly.

  9. What happens if they don't solve the problem?
  10. Answer

    Les Entreprises YYZ will consider another supplier.

  11. How does YYZ prove there is a problem?
  12. Answer

    They include a sample (un échantillon) with the letter.

Translation

Les Entreprises YYZ
Fabricants de chaussures athlétiques
378, rue Despins
Saguenay, Québec
A1B 2C3

Lacets Inc.
Parc industriel
Sept-Îles, Québec
Y4B 8N4

May 17, 2015

RE: Product defects (Order no 6438956)

Dear Sir or Madame,

I am writing to resolve a recent problem. As you know, we order more than 30,000 pairs of laces that we use in our fabrication of athletic shoes. We chose you as a supplier in 2002 because of your reputation for quality, and since then we have been entirely satisfied with your product and your service.

Unfortunately, I regret to inform you that your latest shipment of laces (see order number above) has serious defects. More than half the laces have defective aglets. In some cases, the aglets are simply missing! See the samples enclosed with this letter.

It is clear that we could not use these laces: our high quality standards would not allow it. In order to continute our relationship with your company, we would need a solution to be found in the very near future. Our current stock of laces will last no more than three weeks. If a quick solution is not found, we would be obliged to find another supplier.

I hope that this problem can be resolved.

Sincerely,

Jean-Claude Dubuc
Vice-président, operations

Communicating a company's values more broadly

For most companies, it is important to remain visible to current and potential customers, and to communicate their values and accomplishments to others, including governments and competitors. Sometimes this is done in print, but sometimes as well in video. The example below shows a how a Canadian corporation, Bombardier, which makes planes and trains, has celebrated one of its accomplishments. This video is based on images, with words written on the screen. Take a moment to watch it carefully at least twice, once for the images it contains, once for the language. (If there are any words you do not understand, see the translation below.)

When you have watched the video, answer the comprehension questions below. These are based not just on facts presented, but on values the company is trying to present.

Source: Bombardier

Comprehension questions

  1. What happened between 1998 and 2004?
  2. Answer

    The Challenger series of jets was inaugurated, designed, built, was tested and entered service.

  3. What do the first 30 seconds of the video show?
  4. Answer

    The process from design to entry into service.

  5. What was the reception to the Challenger 350?
  6. Answer

    It became a celebrity.

  7. What does the video from 44 seconds to 60 seconds show?
  8. Answer

    Flight testing of the Challenger 350.

  9. In what ways does the Challenger surpass customer expectations?
  10. Answer

    By its comfort (son confort), its performance (sa performance), its efficiency (son efficacité) and its value (sa valeur).

  11. What is the image at 1:44 designed to show?
  12. Answer

    That Challenger was built by a team.

Translation

Across top of screen: Bombardier Business Planes has delivered its 500th two-engine jet (biréacteur)

Bombardier, the evolution of mobility

It was in 1998 that Bombardier launched the Challenger 300 plane.

After a first successful flight in 2001 and its entry into service in 2004

the Challenger 300 is considered to be the plane that has defined the segment of superintermediate business twinjet planes

In the image: Congratulations Challenger, 100th

In 2013, the Challenger 350 became a celebrity in its flight tests (ses essais en vol)

Today, we celebrate an exceptional step:

we have constructed our 500th plane in the Challenger 300 series

How does this plane continually surpass our customers' expectations?

By its comfort

Its performance

Its efficiency

And its value

This milestone demonstrates the exceptional path of the Challenger platform

And the welcome this plane has received around the world

CHALLENGER

Bombardier, the evolution of mobility

Reading passage

In this module, we have looked at some of means that businesses use to communicate with others. The following text is a further example of this sort of communication. Read the text and then answer the comprehension questions. You may not understand everything, but try to get the gist. A translation is provided at the end.

This particular text is designed to address concerns, so it provides reasons and justifications. Apart from the details provided, watch for the sorts of language used to reassure investors.

Q. Que dites-vous aux investisseurs inquiets qui aimeraient voir vos programmes être mis en service et commencer à générer des revenus ?

R. Que ce que nous réalisons est complexe. Cela prend du temps à concevoir et à construire un nouvel avion ou un nouveau train. Cela peut mettre à l’épreuve la patience des investisseurs, et même parfois la nôtre. La longueur du cycle de développement de nos produits donne le temps aux gens de remettre en question la pertinence de notre stratégie, tout spécialement quand des programmes importants sont en retard et coûtent plus cher que prévu.

Il est important de savoir que nous réévaluons constamment la pertinence de notre stratégie de produits et de nos priorités de développement. Cela nous force parfois à prendre des décisions difficiles, bien qu’absolument nécessaires. Suspendre notre programme d’avion d’affaires Learjet 85 en raison de la persistance sur plusieurs années de la faible demande dans cette catégorie d’avions légers a été une de ces décisions difficiles.

Dans l’intervalle, nous allons continuer à avancer dans nos deux autres programmes d’avions de conception entièrement nouvelle. Les avions commerciaux CSeries respectent les objectifs de performance et nous progressons bien vers la certification prévue au deuxième semestre de 2015. Les programmes de grands avions d’affaires Global 7000 et Global 8000 progressent également bien avec le premier véhicule d’essais en vol en assemblage final. Nous allons certifier le biréacteur d’affaires de taille moyenne Challenger 650 en 2015. De plus, avec l’achèvement de ses 600 000 km d’essais, le train à très grande vitesse ZEFIRO 380 a été homologué en janvier 2015 et il est maintenant prêt à être livré en Chine.

Source: Bombardier 2014 Financial Report

Comprehension questions

  1. Some investors seem worried. What are they hoping to see?
  2. Answer

    They would like some more planes put into service to generate income.

  3. What is the president's answer?
  4. Answer

    That these are complex projects and take a long time to develop. There is constant reevaluation of projects and goals.

  5. What is an example of a difficult decision that was taken?
  6. Answer
    1. To suspend the Learjet 85 business plane project because demand for it was low.
    2. The current staff didn't have the resources to fix these problems
  7. When will the CSeries planes be certified?
  8. Answer

    In the second quarter (semestre of 2015.

  9. What other plane will be certified, and when?
  10. Answer

    The Challenger 650, in 2015.

  11. Where will the ZEFIRO train be delivered?
  12. Answer

    In China.

Translation

Q. What do you have to say to worried investors who would like to see your projects put into service to earn income?

A. That what we are doing is complex. It takes time to design and construct a new plane or a new train. It can try the patience of investors, and sometimes even our own. The length of the development cycle for our products gives people the time to call into question the pertinence of our strategy, especially when important programs are delayed or cost more than planned.

It is important to know that we are constantly reevaluating our product strategies and development priorities. Sometimes that forces us to take difficult decisions which are absolutely necessary. The suspension of our Learjet 85 business jet because of weak demand over a number of year for this class of plane was one of these difficult decisions.

In the meantime, we will continue to progress in our other two programs for entirely new planes. The CSeries commercial planes meet performance objectives and we are on track for certification in the second quarter of 2015. The programs to develop the Global 7000 and Global 8000 large business jets are also progressing well, with the first flight test vehicle in final assembly. We will certify the mid-size twinjet Challenger 650 in 2015. An in addition, after completing its 600,000 km of testing, the ZEFIRO 380 very high speed train was certified in January 2015 and is now ready to be delivered to China.

Summing up

You should now feel comfortable with:

  1. how to identify the major groups that businesses communicate with
  2. how to understand a SWOT analysis as the starting point for communications
  3. the core vocabulary used to express goals and challenges
  4. how to understand some of the types of documents used by businesses to structure their communications.

In the next module, we will look at how businesses present their financial information in more detail, including accounting data.