Read two texts about manager’s work and be ready to discuss it.

a) Fill each gap with a suitable word from the box.

b) Sum up the text in 5-7 sentences and present your summary in class.

c) Explain the differences between macroeconomics and microeconomics.

I

Operation policy familiar Business says demand Notions lead affects Whole Microeconomics operates success

Contemporary financial managers should be familiar with two areas of economics - macroeconomics and...

Macroeconomics is concerned with the over-all institutional environment in which the firm….. It looks, in other words, at the economy as a….. Macroeconomics is concerned with the institutional structure of the banking system, money and capital markets, financial intermediaries, monetary, credit and fiscal…. and economic policies dealing with and controlling the level of activity within an economy. Since business firms operate in the macroeconomic environment, it is important for financial managers to understand the broad economic….. Specifically, they should recognise and understand how monetary policy…. the cost and the availability of funds; be versed in fiscal policy and how it affects the economy; be aware of the various financial institutions and their modes of operations, to evaluate the potential investment/finan­cing outlets; and understand the consequences of various levels of economic activity and changes in economic policy for their decision environment and so on.

Microeconomics deals with the economic decisions of…….and organizations. It concerns itself with the determination of optimal operating strategies. In other words, the theories of microeconomics provide for effective…..of business firms. They are concerned with defining actions that will permit the firms to achieve …..

The concepts and theories of microeconomics relevant to financial management are, for instance, those involving supply and…..relationship and profit maximization strategies, issues related to the mix of productive factors, "optimal" sales level and product pricing strategies, risk and the determination of value and the rationale for depreciating assets. In addition, the primary principle that applies in financial management is marginal analysis which….. that financial decisions should be made on the basis of comparison of marginal revenue and marginal cost. Such decisions will….to an increase in profits of the firm. Thus, financial managers must be……with the basic microeconomics.

 

Words you may need:

to be versed (in) розбиратися у чомусь

outlets можливості

rationale основна причина, логічне обґрунтування

marginal analysis аналіз по граничному показнику

marginal revenue граничний прибуток (предельный)

marginal costs граничні витрати (предельные издержки)

II

 

a) Supply the articles where necessary.

b)Write down 3-5 questions about the texts.

c) Say in what activities financial managers are involved.

a) Financial Management explains how... financial managers can help maximize the value of their firms by making better decisions in such areas as capital budgeting, choice of capital structure, am working capital management.

Financial managers also have... responsibility for deciding the credit terms under which customers may buy, how much inventory.. firm should carry, how much cash to have on hand, what types of securities to issue, whether to acquire... other firms (merger analysis) and how much of the firm earnings to plough back in the business versus payout as dividends.

A successful firm usually has... rapid growth in sales, which requires investments in... plant, equipment and inventory. The financial manager must help decide on... specific assets to acquire and the best way to finance these investments. For example, should... firm finance with debt or equity, and if debt is used, should it be long-term or short-term?

In this connection, the financial manager must deal with... money and capital markets, where funds are raised and where the firm's securities are traded. As a consequence, financial managers of many large companies are responsible for working with investors (for example, mutual funds), bond rating agencies, stock holders, and the general financial community.

Financial managers, controllers in particular, are also responsible for financial accounting - preparation of the financial statements for... firm, cost accounting - preparation of... firm's operating budgets, and preparation of reports that the company must file with the various government (local, state and federal) agencies.

One of... major documents developed and controlled by financial managers is the Enterprise Financial Plan. It comprises... requirements for financial resources and the amounts currently available and expected in... future to meet them, i.e. the estimated revenues and expenditures of an enterprise within some future period of time. The enterprise financial plan determines whether... cumulative revenues exceed the cumulative outlays at every point of time during... plan period and whether the necessary capital structure is assured.

The enterprise financial plan is composed of... revenue plan,... expenditure plan and... financing or credit plan.

 

Words you may need:

financial accounting фінансовий облік (финансовый учет)

cost accounting виробничий облік (производственный учет)

file пред’являти який –небудь документ (представлять какой-л. документ)

cumulative сукупний (совокупный)