Lesson 8

Task 1. Complete the text with the words in the box.

1. capital	5. financing	9. success	13. finance	17. money
2. growth	6. manag­ing	10. business	14. funds	18. arrangement
3. expenses	7. enterprises	11. expand	15. needs	19. assets
4. investment	8. uses	12. insurance	16. production	20. competition

Financing a Company

Meeting the ( 1 ) of small and medium ( 2 ) is important for the development of a viable local private sector.

When going into business, ( 3 ) is one of the most important factors. Without sufficient funds a company cannot begin operations. The money needed to start and continue operating a business is known as ( 4 ). A new ( 5 ) needs capital not only for ongoing expenses but also for purchasing necessary ( 6 ). These assets - inven­tories, equipment, buildings, and property - represent an ( 7 ) of capital in the new business. Capital is also needed for salaries, credit extension to customers, adver­tising,

( 8 ), and many other day-to-day operations. In addition, ( 9 ) is essential for ( 10 ) and expansion of a company. Because of ( 11 ) in the market, capital needs to be invested in developing new product lines and ( 12 ) techniques and in acquiring assets for future expansion.

How this new company obtains and ( 13 ) money will, in large measure, determine its ( 14 ). The process of ( 15 ) this acquired capital is known as financial management. In general, ( 16 ) is securing and utilizing capital to start up, operate, and ( 17 ) a company. In financing business operations and expansion, a business uses both short-term and long-term capital. A company utilizes short-term capital to pay for salaries and office ( 18 ) that last a relatively short period of time. On the other hand, a company seek long-term financing to pay for new assets that are expected to last many years. When a company obtains capital from external sources, the financing can be either on a short-term or a long-term ( 19 ). Generally, short-term financing must be repaid in less than one year, while long-term financing can be repaid over a longer period of time.

Finance involves the securing of ( 20 ) for all phases of business operations. In attracting and using this capital, the decisions made by managers affect the overall financial success of a company.

Task 2. Match each of the words or phrases on the left to an appropriate definition.

1. Annual report	a) Decreases in owner’s equity that result from operating a business
2. Balance	b) The financial statement that summarizes the revenues earned and expenses incurred by a business over a period of time
3. Balance sheet	c) The primary means of communicating important accounting information to users. They include the income statement, statement of owner’s equity, balance sheet, and statement of cash flows
4. Cost of goods sold	d) A financial statement that shows the same basic information as the statement of retained earnings, but also shows the changes in all owners’ equity accounts
5. Current assets	e) The medium in which the general-purpose external financial statements of a business are communicated once a year to stockholders and interested parties
6. Expenses	f) Working totals of columns of numbers. To foot means to total a column of numbers
7. Financial statements	g) The difference in national currency between the total debit footing and the total credit footing of an account
8. Footings	h) Cash or other assets that are reasonably expected to be realized in cash, sold, or consumed within one year or within the normal operating cycle, whichever longer
9. Income statement	i) The difference between revenues and expenses when revenues exceed expenses
10. Net income	j) The financial statement that shows the assets, liabilities, and owner’s equity of a business at a point in time
11. Retained earnings	k) The financial statement that shows the inflows and outflows of cash from operating activities, investing activities over a period of time
12. Retained earnings	l) The amount a merchant paid for the merchandise sold during an accounting period. Also called cost sales
13. Statement of cash flows	m) The difference between expenses and revenues when expenses exceed revenues
14. Statement of stockholders’ equity	n) The account that reflects the stockholders’ claim to the assets earned from operations and reinvested in corporate operations. Also called earned capital

Task 3. Fill in the blanks using the word combinations given below, translate the letter.

Letter 1.

Dear Sirs,

I (1)__________ of your bank for several years and I have had (2)________ about the quality of the services provided. (3)_________ now I feel that the present situation should be clarified immediately. I (4)________ of the mistake. (5)________, I will have no alternative but to consider transforming (6)________.

We are looking forward to your reply.

Sincerely yours,

a. my accounts to another bank;

b. have been a customer;

c. failing this;

d. expect a full explanation;

e. no reason to complain;

f. however.

Letter 2.

Dear Sirs,

We have pleasure in informing you that tenders (1) design works and construction of the Millenium Dome will be held next month.

If you wish (2) in the tender, please, send (3) information on the projects, constructed with your assistance.

Will you, (4) , note that the bidding (5) is set for 20 th June 2002.

The tender documents will be sent to you on receiving your (6) .

a. us relevant

b. favourable reply

c. to participate

d. deadline

e. for carrying out

f. please

Task 4. Choose the correct variant.

1. E-commerce has encouraged a new generation of … to set up new companies.

a) workers

b) engineers

c) businessmen

d) entrepreneurs

2. Increased counterfeiting affects the brand owners future … .

a) balancing

b) potential

c) finance

d) profitability

3. … we learn the rules … is to write our tests.

a) The more, the easier

b) The most, the easiest

c) Most, easiest

d) More, easier

4. I can’t rely on my cousin . He always … all the documents.

a) loses

b) is losing

c) lost

d) was losing

5. The president says the Parliament … .

a) had been dissolved

b) are dissolved

c) was being dissolved

d) has been dissolved

6. She told me she … come later.

a) will come

b) comes

c) would come

d) came

7. Candidates … leave the room during the exam.

a) needn’t

b) could

c) couldn’t

d) may not

8. If he relaxed more, he … not be so stressed.

a) will

b) would

c) was

d) were

9. If we want this meeting finished soon, we … to hurry.

a) have to

b) had to

c) will have to

d) won’t have to

10. The corporation … by his grandfather was sold last week.

a) founded

b) to found

c) founding

d) found