5. Arrange and run a conversation on the following text:

Finance

Finance is the function in a business that is responsible for obtaining funds, managing funds within it and controlling them. Most organizations havefinance managers or financial departments in charge of financial operations. Financial management performs the following finance functions:

PlanningCollecting funds (Credit Management)

BudgetingAuditing

Obtaining fundsManaging taxes

Controlling fundsAdvising top management on financial matters

So, the main task of finance manager is to obtain money, then plan it, use and control money effectively.

You must be sure that without a carefully calculated financial plan and budget the firm has little chance for success.

Obtaining funds - is a very important finance function, because the amount of money needed for various time periods and its sources are fundamental questions in sound financial management.

Financial control means that the revenues, costs and expenses are periodically reviewed and compared with projection.

Credit management gives a firm chance to earn money having an interest on credits and loans given. But you must be sure that the firm doesn't lose too much money to bad debt losses. So, collecting funds is a very important task of a finance manager.

Managing taxes means tax implications of various financial transactions. Remember that tax computation is under strict scrutiny of tax authorities. Then comes auditing, that is reviewing and checking on the journals, ledgers and financial statements to be sure that everything was done according to accounting rules and procedures.

And finally, financial people help management in decision making. All these functions depend greatly on the information provided by the accounting statements.

Unit 2. Acquisition of capital

1. Read and memorize the following words and word combinations:

• equity – звичайна акція; чиста доля у засобах

• financing – фінансування

• debt – борг; зобов'язання

• fund – запас, резерв, фонд

• transaction – діло, угода; ведення діла

• stock –запас; капітал; фонд; облігація, цінні папери

• ownership – володіння, право власності; власність

• share – доля, частка; акція, пай

• purchaser – покупець

• stockholder – акціонер, власник акцій

• shareholder – акціонер, власник акцій

• starting capital – стартовий капітал

• loss – втрата, збиток; ущерб

2. Read, translate and retell the text:

A corporation needs capital in order to start up, operate, and expand its business. The process of acquiring this capital is known as financing. A corporation uses two basic types of financing: equity financing and debt financing. Equity financing refers to funds that are invested by owners of the corporation. Dept financing, on the other hand, refers to funds that are borrowed from sources outside the corporation.

Equity financing (obtaining owner funds) can be exemplified by the sale of corporate stock. In this type of transaction the corporation sells units of ownership known as shares of stock. Each share entitles the purchaser to a certain amount of ownership. The person who purchases shares of stock is known as a stockholder or shareholder.

All corporations, regardless of their size, receive their starting capital from issuing and selling shares of stock. The initial sales involve some risk on the part of the buyers because the corporation has no record of performance. If the corporation is successful, the stockholder may profit through increased valuation of the shares of stock as well as by receiving dividends. Dividends are proportional amounts of profit usually paid quarterly to stockholders. However, if the corporation is not successful, the stockholder may take severe loss on the initial stock investment.

Often equity financing does not provide the corporation with enough capital and it must turn to debt financing, or borrowing funds.

All businesses need financial support. Equity financing (as in the sale of stock) and debt financing provide important means by which a corporation may obtain its capital.