2. Write notes.

What are the important issues in your company at the moment in relation to the P&L account?
What is your operating profit in relation to
your competitors?	the capital invested in the business?	the general state of the economy?

3. Discuss.

Framework 2: Balance sheet

1. Prepare.

1. Cross out the incorrect words in italics.

On a balance sheet (BS), things that you own are called assets / liabilities and things that you owe are called assets / liabilities.

2. Match the words and phrases (1—8) with the definitions (a—h).

1) fixed assets 2) current assets 3) intangible assets 4) loan capital 5) share capital 6) retained profit 7) accounts receivable 8) accounts payable

a) assets that can be converted to cash within one year b) assets that the company will use over a long time period c) assets that are not physical and so cannot easily be valued e.g. copyrights, patents, franchises, goodwill, trade mark/brand name d) money that has come into the company from issuing shares e) money that has come into the company from its operations f) money that has come into the company from bank loans g) money owed to suppliers (= creditors) h) money owed by customers (= debtors)

3. Study the balance sheet items below. Is a bs in your company presented in the same way?

Current assets Cash Accounts receivable Inventory (raw materials and stock) Shares intended for disposal within 1 year Fixed assets Vehicles and equipment Investments (= financial assets) Land and buildings Intangible assets Goodwill (of companies you have bought), patents etc.	Current liabilities Loan capital (= bank debt) Accounts payable Accrued expenses (other items not yet paid e.g. unpaid utility bills, unpaid payroll taxes) Tax payable (tax on operating profit)
	Provisions Amount set aside for future liabilities (e.g. writing off a bad debt, restructuring costs, a court case)
	Shareholders’ equity Share capital Retained profit (= reserves)

4. Complete this equation using phrases from the BS. Then answer the question: Why is working capital important to a business?

working capital = _____________________ - ______________________

2. Write notes.

What are the important issues in your company at the moment in relation to the BS?

What is your company doing to decrease the tax payable?

What plans do you think the Board of Directors or CEO have to improve the BS next year?

3. Discuss.

Framework 3: Managing cashflow

1. Brainstorm.

1. Complete the ideas maps.

2. What other ways are there to increase cashflow?

__________________________________________________

2. Write notes.

1. What causes cashflow problems in your business? Give three real-life examples.

1.

2.

3.

2. How do you try to solve cashflow problems? What problems does this cause?

Methods we use to improve cashflow		Problems associated with these methods
1.	→
2.	→
3.	→

3. Discuss.

Framework 4: Company analysis

1. What do you need to know about a company to analyse its current performance and future potential? Brainstorm.

2. Write notes.

1. Choose a company you have recently analysed and complete the grids.

Name of company:_________________________________

Background information

1. 2. 3. 4. 5.

Product/service information

1. 2. 3. 4. 5.

Financial information

1. 2. 3. 4. 5. 6.

2. Would you recommend this company to investors? Give three main reasons.

1.

2.

3.

3. Discuss.

Framework 5: Investment advice

1. Prepare.

1. Read the text and check the vocabulary.

Investment instruments include stocks (equities), bonds and cash. Most investors like to have a diversified portfolio of all three. Stocks offer a higher potential return over the long term, but at a higher risk. Bonds offer a fixed rate of interest, and have less risk. They can be issued by governments (in which case they are called gilts), or companies. Cash sits in a bank account earning interest. It is the safest investment, but offers the lowest returns.

Instead of investing in individual stocks, investors can spread their risk by investing in funds. These can be geographical funds (domestic / regional / international), sector funds (e.g. the technology / financial / health care / retail sectors), tracker funds (that ‘track’ or follow exactly a stock market index such as the S&P 500), emerging market funds or small company funds.