TASK 6. Can you define what the turnover trouble is?

TASK 7. Read the dialogue and find out what expressions help to describe the financial position of a company.

TASK 8. Talk with your friend about the financial picture of a company you know.

 

WRITING

TASK 1. Translate into English.

Балансовый отчет - это отчет, составленный на определенную дату. Он показывает стоимость активов предприятия и как были получены финансовые средства на их приобретение.

Все, чем владеет предприятие и имеет денежную стоимость, называется активами. Активы малого предприятия включают обычно наличные средства, счета к получению, оборудование, землю, здания, резервы, механизмы, транспортные средства. Они подразделяются, как правило, на оборотные и необоротные активы.

Оборотные активы - это наличные средства и активы, которые могут быть обращены в наличные в период рабочего цикла предприятия (в основном, в течение года). Они включают векселя к получению, счета к получению, рыночные ценные бумаги и запасы, а также наличные. Однако, если резервы не используются, а векселя и счета к получению не обращаются в наличные в течение года, то их следует рассматривать как постоянные средства.

Запасы (резервы) - это название дается предметам, которые покупаются и продаются с намерением получить прибыль.

 

TASK 2. Show the balance sheet on 13 May after all transactions below had taken place.

Balance sheet of the Officу Computers as at 8 May 2000

Bank $ capital $

2.000 2,000

9 May Negotiated a loan of $500 with his bank manager which was paid into his bank account.

10 May Purchased a motor vehicle for $34,000 from Mercedes. He paid 15,000 by cheque and agreed to pay the balance within 4 months.

11 May Withdrew $ 150 from the bank for use as cash.

12 May Purchased $450 worth of fixtures, paying for them by cheque.

13 May On his first day of selling he received $1,350 cash for the sale of computers.

 

 

GRAMMAR PAGE

 

TASK 1. Use the Passive Voice. Pay attention to the notes to make similar sentences.

Examples: Auditing work is spread evenly throughout the year.

The Board of Directors' report is required by law.

The accounts are followed by the Auditor's Report.

1. The annual report (publish) last week.

2. Money (spend) on research this year.

3. Expensive cars (give) to the directors⁵ families.

4. Earnings (depress) by foreign competition.

5. Progress of the company usually (reflect) in the growth of profits.

 

TASK 2. When you look up verbs in English dictionaries, you often find them marked vi (intransitive verb) or vt (transitive verb). The following verbs are transitive, it is they must take an object:

Lower, reduce, make, list, raise, have, use

Examples: They lowered my wages.

He reduced the number of cigarettes he smoked.

She listed my mistakes.

The following verbs are intransitive and cannot take an object: Fall, rise, go up/down.

 

Examples: The sun rises every morning.

Share prices fell.

Some verbs may be used transitively or intransitively and take an object or not; one of these is 'increase'.

 

Examples: The government increased public spending.

Each year the money supply increases.

 

A. Choose a grammatically correct verb for each sentence. (In each Cliff more than one verb is acceptable).

 

a) Profits had / fallen / lowered/decreased/ reduced

b) The government's policy had / fallen/lowered/decreased/reduced/ profits.

c) Profits had / risen / raised / increased/ gone up.

d) He hoped that a change of policy would / rise / raise / increase / profits.

B. Insert the correct verb forms in the following sentences.

a) A price increase by one of his suppliers______his margin from 31

per cent to 26 per cent.

b) Sales had_______ despite the recession.

c) The company's accounts_____ a 19 per cent_____ in turnover.

d) The company's accounts ____a____ in profits from 20 per cent to 7 per cent.

e) Sales could______ by 29 per cent and the company would still make a profit.

f) Now profits______ and this worried him.

g) What you've got to do is_____ your turnover!

h)______output of the Bradcap and increase your margin.

i) He had achieved this by_____ the price on his main product.

j) It'll be pretty bad especially if our overheads__ (2 words) and our overall sales margin_______.

TASK 3. Choose the best verb to complete each of the sentences below.

a) The company's profitability has /got better / increased / benefited /improved.

b) The company's profits have / got better / increased / benefited /improved.

c) I'm not making enough money to /pay for / cover / absorb /finance / all my business expenses.

d) I'm not making enough money to / pay for / cover / absorb /finance / extra costs.

e) We need to / identify /pinpoint / name /find/ the products which are losing money.

f) We need to / identify /pinpoint / name / find / the cause of the problem.

g) The business needs to / create / build up /produce /generate / enough profit to pay for operating and financial costs.

h) The sales manager / set / state / gave / submitted/ the target for the next six months.

 

CASE STUDY

Read the following text and prepare different layouts of the balance sheet according the figures given in the passage.

In the balance sheet the fixed assets are broken down into intangibles (such as patents and goodwill, entered in the books at a value of $1.5 million) and tangible assets (such as freehold property, land and equipment, at a book value of $7.5 million).

The next heading is current assets and this is split into three: firstly stocks valued at $3.2 million, then debtors (in other words outstanding payment for goods sold) at $1.3 million, and thirdly cash at the bank, worth $350,000. The total of current assets is then reduced by the total of current liabilities, which in this case is $2.2 million and represents amounts owing to creditors, leaving a net figure of $2.65 million. Thus the total assets less the current liabilities amount to $11.65 million.

To reach the final balance this figure must be reduced by the sum of long-term liabilities such as loans and also any provisions. In this case $2.45 million is set aside for long-term loans and there is a $450,000 provision for deferred taxation. So this leaves a final balance of $8.75 million worth of net assets.

The final section of the balance sheet - capital and reserves, represents the net asset figure. This company has a share capital of $6.5 million. This sum is topped up by a share premium account, which represents the difference between the above issued share value and the actual price of the shares. In this case, the capital is further increased by $1.4 million. The company has also revalued its fixed assets to give them a more realistic market price so that the shareholders' equity increases by a further $1.15 million and an equivalent amount is charged to depreciation in the profit and loss account. Finally, $300,000 is deducted in retained profit.

 

TEST YOURSELF

TASK 1. Answer the following questions.

1. What is the balance sheet?

2. Why is it called "a still picture of a business"?

3. What items does the balance sheet contain?

4. What does the right-hand side of the balance sheet show?

5. What does the left-hand side of the balance sheet represent?

6. Who needs and uses the balance sheet?

7. Do you know the methods of balance sheet presentation? What are they?

8. What kind of presentation do you prefer and why?

9. How can net assets be broken down?

10. What is the difference between 'capital employed' and 'working capital'?

11.What is the balance sheet equation?

12. When is a business insolvent?

13. What main divisions of finance do you know according the balance sheet?

14.In what way do fixed and current assets differ?

15. When do you consider a company successful?

 

UNIT 2

The Income Statements

 

Objectives:

After studying this Unit you should be able to:

• Give the definition of the profit and loss statement

• Analyze its structure

• Understand and explain different presentations of the income statement

• Make up a profit and loss statement

Vocabulary

adequate ad удовлетворительный, достаточный

adjustment n регулирование, приспособление, установка, пригонка

bad debt expenses затраты на безнадежные долги

beginning/ending inventory начальные/конечные товарно-материальные запасы

(в начале/конце периода)

complete v заканчивать, завершать, комплектовать

compliance, in compliance согласие, в соответствии

cost of goods manufactured стоимость производства товаров

cost of goods sold себестоимость реализованной продукции

create v создавать, творить, производить

decision-making принятие решения

depreciation expense амортизационные расходы

direct labour прямые (непосредственные) трудовые ресурсы

earmark v клеймить, откладывать, предназначать

 

evaluate v	оценивать, определять количество, выражать в цифрах
exceed v	превышать, переходить границы, превосходить
factory overhead	общезаводские накладные расходы
formal ad	официальный, номинальный, правильный
general expenses	общие расходы
go on v	продолжать, идти дальше
gross margin/profit/income	валовая прибыль, брутто-прибыль
insurance agency	страховое агентство
inventory n	запасы, резерв, инвентаризация, опись
markup n	торговая надбавка
miscellaneous	разное (о статье в балансе)
net profit before /after tax	прибыль перед/после уплаты государственного подоходного налога
net sales	выручка от реализации продукции, чистый объем продаж
omit v	пропускать, не включать, пренебрегать
operating expenses	эксплуатационные расходы
other manufacturing overhead	другие производственные накладные расходы
out of date	устаревший
owner's net worth account	счет собственного капитала
performance n	выполнение, исполнение, работа, производительность, результат деятельности
pro forma targets	цели, поставленные при определенных обстоятельствах
purchases n	приобретения
remainder n	напоминание
retained profit	нераспределенная прибыль
return on investment	возврат на инвестиции
sales returns and allowances	резерв на покрытие возвратов проданного
selling and administrative expenses	торговые и управленческие расходы
set n	набор
simplify v	упрощать
stockouts n	дефицит
target = goal n	цель
taxation authority	налоговое управление
utilities n	акции, облигации

STARTER ACTIVITIES

TASK 1. Read the passage through quickly. Then answer the questions:

1. When is a business considered to operate with profit?

2. What does a business need to manufacture goods or produce services?

When a business operates, resources are used up to produce products or services, which are sold to customers. There are four sets of resources: people's skills, services, materials and facilities, to create products or services which customers need.

The value of the products or services sold is the sales figure, the cost of the resources used up is the costs figure. The business is operating profitably, if sales exceed costs and wealth is created.

The profit and loss account, also known as the income statement, summarises the profitability of the company by balancing revenue against expenses.

Revenue (sometimes called turnover) represents any increase in the owner's equity resulting from the operation of the business. Expenses are costs incurred in connection with the earning of revenue.