Vocabulary list

A. financial management управление финансовой деятельностью, финансовый менеджмент

Finance function организация финансовой деятельности

concern n (зд.) интерес, озабоченность

maximize v довести до максимума

common stocks обычные акции

acquisition n поглощение (компании)

to be exposed to risks быть подверженным риску

management of fixed assets управление основными средствами

working capital management управление текущими активами

management of current assets управление оборотными средствами

management of current liabilities управление краткосрочными обязательствами

cash management управление денежными операциями

receivables management управление дебиторской задолженностью

inventory management управление запасами, материально-техническим снабжением

capital structure структура капитала

long-term/short-term financing долгосрочное/краткосрочное финансирование

assets n pl активы

financial statements финансовая отчетность

balance sheet балансовый отчет

income statement отчет о прибылях и убытках

liquid assets ликвидные средства

accounts receivable счета дебиторов

notes/bills receivable векселя к получению

work in process незавершенное производство

liabilities n обязательства

accounting period отчетный период

mortgage n закладная

accounts payable кредиторская задолженность

bills/notes payable векселя к оплате

accrued expenses начисленные издержки

deferred income доходы будущих лет

equity (зд.) акционерный капитал

paid-up capital оплаченная часть акционерного капитала

retained earnings нераспределенная прибыль

dividends n дивиденды

to plough back превращать в капитал

net worth of the business собственный капитал фирмы

fixed capital основные средства (фонды)

working capital оборотный капитал (средства, фонды)

chief financial officer вице-президент корпорации по финансам

controller n финансист-контролер, ведущий анализ хозяйственной и учетно-финансовой деятельности

treasurer n казначей компании

B. financial ratios финансовые коэффициенты/показатели

price/earnings ratio отношение рыночной цены (акции) к чистой прибыли компании (в расчете на одну акцию)

gearing ratio (debt-to-equity ratio) отношение задолженности к собственному капиталу

indication n показатель

analyst n экономист-аналитик

liquidity ratio коэффициент ликвидности

financial leverage ratios доля заемных средств в совокупном капитале

C. ratio analysis кредитный и инвестиционный анализ

solvency n платежеспособность

efficiency n эффективность

profitability n доходность, рентабельность

current ratio отношение оборотного капитала к краткосрочным обязательствам

debt-to-equity ratio соотношение собственных и заемных средств

indebtedness n задолженность

inventory turnover ratio оборачиваемость товарных запасов

to turn over оборачиваться

return on equity доход от акций, доход на собственный (акционерный) капитал

return on assets доход от имущества

payback of an investment окупаемость инвестиций

Exercises

Ex. 1. Answer these questions:

A. 1. What financial concerns face every enterprise?

2. What problems do finance managers face daily?

3. What does financial management involve?

4. What are financial managers concerned with?

5. What are the major components of a balance sheet?

6. How is the finance function most commonly organized?

B. 1. What is a financial ratio?

2. What do financial ratios help to measure?

3. What groups of ratios have been developed?

C. 1. Can you give examples of ratios measuring solvency, efficiency and profitability?

Ex. 2. Give derivatives of:

management n effectively adv maintain v acquisition n

behave v expose v determine v control v

convince v relationship n quote v indicate v

profit n assess v analysis n measure n

receive v debt n risk n turn v

replacement n invest v pay back v total n

Ex. 3. Find English equivalents for the following Russian phrases from the text:

A. управление финансовой деятельностью; на выгодных условиях; эффективно использовать финансовые средства; приобретать активы; необходимые наличные средства; слияния и поглощения; дивидендная политика; быть подверженным риску; управление основными средствами; управление текущими активами; управление оборотными средствами; управление краткосрочными обязательствами; управление дебиторской задолженностью; управление запасами; структура капитала; финансовая отчетность; балансовый отчет; отчет о прибылях и убытках; основные средства; оборотные средства; счета дебиторов; векселя к получению; незавершенное производство; закладная; кредиторская задолженность; векселя к оплате; начисленные издержки; доходы будущих лет; оплаченная часть акционерного капитала; нераспределенная прибыль; собственный капитал; основные фонды; оборотный капитал;

B. финансовые коэффициенты; отношение рыночной цены (акции) к чистой прибыли компании; отношение задолженности к собственному капиталу; коэффициент ликвидности; коэффициенты, характеризующие долю заемных средств в совокупном капитале компании; коэффициент доходности; прибыль от продаж;

С. кредитный и инвестиционный анализ; вести дела эффективно; оценивать результаты; платежеспособность; выполнять краткосрочные обязательства; отношение оборотного капитала к краткосрочным обязательствам; соотношение собственных и заемных средств; иметь отношение к чему-л.; удовлетворять потребности в наличных средствах; оборачиваемость товарных запасов; скорость оборота ...; существенно отличаться; доход от акций; доход от имущества; окупаемость инвестиций; быть подверженным риску.

Ex. 4. Say in a few words what the main text is about. Use the opening phrases from Ex. 4 (Unit 1).

Ex. 5. Sum up the content of the dialogue. Use the phrases from Ex. 5 (Unit 1).

Ex. 6. Read the dialogue, translate the Russian remarks into English and act it out.

Foreigner. What funds are most typically generated at enterprises?

Russian: Для осуществления своей деятельности предприятию необходимы основные и оборотные фонды. Основные фонды – это здания, оборудование, машины. Они используются в хозяйственном процессе многократно. Оборотные фонды представляют собой запасы сырья, материалов, топлива, малоценных и быстроизнашивающихся предметов (objects of small value, quick-wearing objects).

F.: What resources can be used to acquire fixed and working capital?

R.: Предприятия могут использовать собственные и заемные средства.

F.: You mean own and borrowed capital, don't you?

R.: Да, собственный капитал формируется за счет выпуска акций, части прибыли от реализации продукции, амортизационных отчислений. А заемный капитал-это банковские ссуды, выпуск облигаций, прочие кредиты.

F.: As far as I know, enterprises create reserve funds, don't they?

R.: Да, образование резервного фонда является обязательным для акционерных обществ, кооперативов, предприятий с иностранными инвестициями. Он создается на случай прекращения деятельности предприятия и погашения его задолженности.

Ex. 7. Work on vocabulary and grammar.

a) Study the key words of the unit in the dictionary at the back of this book:

assets, exchange rate, interest rate, management, return, value, flow;

b) Think of the verbs that are commonly used with:

funds, financing, assets, inventory, cash, merger, dividends, liquid assets, business, solvency, profitability, risk, return;

c) Think of the nouns that are most often used with:

to acquire, to finance, to borrow, to distribute, to hold, to measure, to manage;

d) Think of word combinations with these words:

assets, capital, to manage, liabilities, ratio, shares, cost, return, cash, value;

e) Match the verbs from (a) with the nouns from (b) below:

a) to maximize b) services

to perform company

to delegate cash

to acquire outlays

to reduce value

to generate cash flow

to evaluate production facilities

to expand calculation

to calculate authority

to adjust shareholder wealth

to manage inventories

Ex. 8. 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, and 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 финансовый учет

cost accounting производственный учет

file v представлять какой-л. документ

cumulative adj совокупный

d) Explain how an enterprise can achieve its prime objective – profitable growth.

b) Mergers and Acquisitions

Profitable growth constitutes one of... prime objectives of most of the business firms. It can be achieved "internally", either through ... process of introducing or developing ... new products, as well as by expanding the capacity of existing products ... firm is engaged in. Alternatively, growth process can be facilitated "externally", by acquisitions of... existing business firms. This acquisition is technically referred to as mergers, acquisitions, amalgamations, takeovers, absorptions, consolidations, etc. Although ... legal procedures involved in these terms are different, these terms are often used interchangeably. It is ... finance manager's job to say "how large an enterprise should be, how fast it should grow, and how it should grow".

If ... enterprise grows "internally" it can retain control with itself during expansion and it will be free to choose how to grow. However, ... internal expansion usually involves ... longer implementation period as well as different problems connected with raising ... necessary funds. Mergers or acquisitions, in most cases, help to avoid ... financial problems and expedite ... pace of growth, by saving the time otherwise required in building up new facilities from scratch in the case of internal expansion programme.

Mergers are typically classified into ... horizontal mergers (when two or more corporate firms dealing in ... similar lines of activity combine together) and vertical mergers, extending to ... suppliers of raw materials or distributors. The finance manager's job is to evaluate such merger decisions.

Words you may need:

takeover n слияние компаний

expedite v ускорять

pace n темп(ы)

from scratch с нуля

Ex. 9. a) Supply the prepositions where necessary.

b) Say what classes of shares are usually issued by companies and what rights they give their holders.

Financial Capital

Financial capital includes the liquid assets of a company as opposed ... physical assets. Companies can have a variety of types of capital. The principal distribution is ... share capital and loan or debenture capital.

The most usual classes of share ... which the capital of a company can be divided are preference, ordinary, and deferred shares.

Preference shares have a fixed rate ... dividend. However large the profits of a company might be, the holders of preference shares are not entitled ... any additional dividends over and above the rate of dividend agreed when the shares are first issued. The holders of preference shares do not usually have any voting rights. This means that they cannot vote ... the general meetings of the company. But they do have an advantage ... the holders of all other types of shares in that the dividends due ... preference shares must be paid before any dividend is paid ... the holders of ordinary or deferred shares.

Ordinary shares entitle their owners a vote at companies' general meetings. They also have a right to elect company directors, and to receive a proportion of distributed profits ... the form of a dividend.

Issuance of shares is a source ... capital for companies. If a company wishes to raise more money ... expansion it can issue new shares. These are frequently offered ... existing share holders ... less than their market price: this is known as a rights issue.

Companies may also turn part of their profit ... capital by issuing new shares to shareholders instead ... paying dividends. This is known as a bonus issue or scrip issue or capitalisation issue. The source of equity is the securities market.

Loan capital is a long-term debt. Companies can raise this type of capital... clearing banks, merchant banks and even pension funds.

The composition of a company's capital is called capital structure.

Words you may need:

debenture capital заемный капитал

preference shares привилегированные акции

ordinary shares обычные акции

deferred shares отсроченные акции

voting right право голоса

rights issue выпуск льготных акций, предлагаемых акционерам компании

bonus/scrip/capitalisation issue бонусная эмиссия, выпуск льготных акций (или бесплатных акций)

Eх. 10. a) Put the verbs in brackets in the correct form.

b) Describe the development of financial management.

Prior to the 1930s the field of financial management basically (to confine) to descriptive discussions of the various financial markets and the securities traded in those markets and fund raising.

With years this field of finance (to undergo) a number of significant changes and (to become) involved with legal matters of bankruptcy, reorganization, and government regulation.

During the 1950s, for example, financial management (to expand) to include uses of a firm's funds; application of discounted cash flow techniques was perfected; significant breakthroughs in developing techniques for measuring the cost of capital and valuing financial assets (to make); capital budgeting (to make) progress. Later, financial researchers (to focus) on the allocation of current assets, i.e. cash accounts receivable and inventories, and fixed assets.

During the 1960s mathematical models using statistical and optimization techniques (to apply) in financial management. The financial management field witnessed an exciting period of change and growth during the 1970s when there (to be) an increasing emphasis on applying computer technology to assist in financial decision making.

The 1980s (to witness) an explosion of new financial instruments, such as options and futures contracts, that can be used to manage risk. Techniques (to change) but the objective of financial management (to remain) – to maximize the shareholder's wealth.

So the financial manager's job is to arrange for the firm to get the funds needed on favourable terms and to make sure they are used effectively.

The job must be done not only in businesses, but also in not-for-profit firms and units of government.

In a world that is increasingly affected by international trade and cooperation, financial management (to acquire) very important new dimensions.

Words you may need:

discounted cash flow будущие поступления наличными, приведенные в оценке настоящего времени

optimization technique метод оптимизации

Ex. 11. 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.

operation policy familiar

businesses says demand

notions lead affects

whole operates success

microeconomics

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 organisations. 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) разбираться (в чём-л.)

outlets n pl (зд.) возможности

rationale n основная причина, логическое обоснование

marginal analysis анализ по предельным показателям

marginal revenue предельный доход

marginal costs предельные издержки