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?

С. 1. Can you give examples of ratios measuring solvency, efficiency and rofitability?

Ex. 2. Give derivatives of:

management n	effectively adv	maintain v	acquisitions
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. Say in a few words what the main text is about.

Ex. 4. Sum up the content of the dialogue.

Ex. 5. 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. 6.

a) Supply the articles where necessary.

2. Write down 3-5 questions about the texts.

3. 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:

Англійський варіант	Російський варіант	Український варіант
financial accounting	финансовый учет	фінансовий облік
cost accounting	производственный учет	виробничий облік
file	представлять какой-л. документ	представляти де-який. документ
cumulative	совокупный	сукупний

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:

Англійський варіант	Російський варіант	Український варіант
takeover	слияние компаний	злиття компаній
expedite pace	ускорять темп(ы)	прискорювати темп(и)
from scratch	с нуля	з нуля

Ex. 7.

a) Supply the prepositions where necessary.

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