Which word?

Fund vs finance

These two words are very similar, but fund is used more than finance for programmes or projects that continue or are repeated year after year.

Task 3. Practice reading the following words.

arrangement [ə`reındჳmənt] asset [`æset] centralized [`sentrəlaızd] to consolidatе [kən`sOlıdeıt] / [kən`sα:lıdeıt] converging [kən`və:Gıŋ] duplicate [`dju:plıkeıt] to ensure [ın`∫O:] / [ın`∫uər] equity [`ekwəti] expenses [ık`spentsız] financial [faı`nænt∫əl] 79% / [fı`nænt∫əl] 17% / [fə`nænt∫əl] 4% future [`fju:t∫ə] / [`fju:t∫ər] department [dı`pα:tmənt]

item [`aıtəm] liquid [`lıkıwd] ownership [`əunə∫ıp] / [`ounər∫ıp] provision [prə`vıჳən] relatively [`relətıvli] shared [`∫eəd] to secure [sı`kjuə] / [sı`kjuər] seek [si:k] separate [`sepərət] structure [`strAkt∫ə] / [`strAkt∫ər] success [sək`ses] towards [tə`wO:dz] / [tO:rdz] to utilize [`ju:tılaız] / [`ju:təlaız] version [`və:∫ən] / [`və:ჳ ən]

Task 4. Read the text. What is Finance? (Part II)

When a company obtains capital from external sources, the financing can be either on a short-term or a long-term arrangement. Long-term funds are provided by ownership equity and long-term credit, often in the form of bonds. The balance between these forms the company’s capital structure. Short-term funding or working capital is mostly provided by banks extending a line of credit.

A company, much like an individual, utilizes short-term capital to pay for items that last a relatively short period of time, e.g. for salaries and office expenses. On the other hand, a company seeks long-term financing to pay for new assets that are expected to last many years. 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.

Each company today has a finance manager or a financial department. There is currently a move towards converging and consolidating finance provisions into shared services within an organization. Rather than an organization having a number of separate finance departments performing the same tasks from different locations a more centralized version can be created.

In obtaining and using capital, the decisions made by managers affect the overall financial success of a company.

Thus, finance is one of the most important aspects of business management. Without proper financial planning a new enterprise is unlikely to be successful. Managing money (a liquid asset) is essential to ensure a secure future, both for the individual and an organization.

Financial management is duplicate with the financial function of the accounting profession. However, financial accounting is more concerned with the reporting of historical financial information, while the financial decision is directed toward the future of the firm.