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Company organization. Business model

The term business model describes a broad range of informal and formal models that are used by enterprises to represent various aspects of business, such as operational processes, organizational structures, and financial forecasts. Although the term can be traced to the 1950s, it achieved mainstream usage only in the 1990s.

A brief history of the development of business models might run as follows. The oldest and most basic business model is the shop keeper model. This involves setting up a store in a location where potential customers are likely to be and displaying a product or service. Over the years, business models have become much more sophisticated. The bait and hook business model (also referred to as the "razor and blades business model" or the "tied products business model") was introduced in the early 20th century. This involves offering a basic product at a very low cost, often at a loss (the "bait"), then charging compensatory recurring amounts for refills or associated products or services (the "hook").

My company

I am Alexander Smith. I work as a Sales Manager in Newtech company. It was established in 1982, more than 30 years ago. It is a Russian company. We specialize in producing process equipment for food industry. It consists of 8 departments: Production, Sales, Advertising, Accounting, Financing, Export, Personal, Research and Development. The last one is newly arranged.18 per cent of our budget goes to research and development. Newtech is a corporation. It’s management is a Meeting of Shareholders and a Board of Directors. Mr.Klincov is a Managing Director of the company. The number of employees is about seven hundred people. The head office is in Volgograd. It makes general policy decisions, and the local managers look after the daily business in branches. It has important branches in Samara and Saratov. They are independent. Three factories of the company are also located in Volgograd, Saratov, Samara. Production of our company is well-made and known in the world. It corresponds to the highest technical level and standards existing in the world. Currently, we are the tenth largest Russian equipment manufacturer with an annual turnover of 100 million roubles. In 1992 we started an export division and exports now account for 10 per cent of our turnover. The company is doing well. Sales and profits are rising. Over the next five years we project a much greater increase in our export business. In order to achieve this growth we are looking for ways of exporting to Europe and planning a number of key acquisitions there.

Text B

New words and word combinations:

1) revenue – доход; 2) expenses – расходы; 3) to equal – равняться, быть равным; 4) equality – равенство; 5) equation – уравнение; 6) owner’s equity – доля собственника; 7) to mean – означать; 8) to prepare – приготавливать; 9) a quarter – квартал; 10) a snapshot - снимок, фотография; 11) to own – владеть, иметь; 12) to owe – быть должным, быть в долгу перед кем-либо; 13) net income – чистый доход; 14) to occur – случаться, происходить; 15) a stockholder – акционер.

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Financial statements

Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand. The accounting process consists of two major functions: recording data from transactions and preparing financial statements. The two most important financial statements are: 1) the income statement (profit and loss statement); 2) the balance sheet.

They typically include four basic financial statements accompanied by a management discussion and analysis.

1) An income statement – or profit and loss report (P&L report), or statement of comprehensive income, or statement of revenue & expense – reports on a company's income, expenses, and profits over a stated period of time, showing the results of operations during that period. The basic formula is revenue minus expenses equals gross profit. A profit and loss statement provides information on the operation of the enterprise. These include sales and the various expenses incurred during the stated period.

2) A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time. The words balance sheet mean that the report shows a balance, an equality between two figures: assets and liabilities plus owner’s equity. Thus, the fundamental accounting equation used to prepare the balance sheet is: assets = liabilities+ owner’s equity. Most businesses prepare a balance sheet at the end of each month or quarter.

The difference between the balance sheet and the income statement can be summarized this way: the balance sheet is a “snapshot” of where a company is at one moment of time. It tells what the company owns and owes on a certain day. The income statement is a motion picture. It summarizes all the resources that come into the firm and left the firm and the resulting net income.

3) A statement of changes in equity or equity statement, or statement of retained earnings, reports on the changes in equity of the company over a stated period of time.

4) A cash flow statement reports on a company's cash flow activities, particularly its operating, investing and financing activities over a stated period of time.

A financial statement is merely the summary of all transactions that have occurred over a particular period of time. Financial statements tell the health of a firm. That is why they are of great interest to stockholders, bank, investors and government. For large corporations, these statements may be complex and may include an extensive set of footnotes to the financial statements and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.

Text C

New words and word combinations:

1) to link – соединять, связывать; 2) to perform – выполнять; 3) to transfer – переносить, передавать, перемещать; 4) a customer – заказчик, покупатель, клиент; 5) a system of payment - система платежей; 6) to charge an interest rate – назначать процентную ставку; 7) to pay an interest rate – платить процентную ставку; 8) to deposit – класть в банк, депонировать; 9) to place money on deposit – вносить деньги в депозит; 10) to make (to give) a loan – предоставлять заем; 11) to conduct payment – проводить платежи;  12) circulation – обращение; 13) to offer services – предлагать услуги; 14) to depend on – зависеть от; 15) an intermediary – посредник; 16) tax agency – налоговая контора; 17) deposit operations – депозитные операции; 18) credit operations – кредитные операции; 19) to borrow(from) – заимствовать.