2. Read and translate the texts, be able to speak on the topic: Text a

Finance is the function in business that is responsible for acquiring funds for the firm and managing fund within the firm (for example, preparing budgets, doing cash flow analyses) and planning for the expenditure of funds on such assets as plant, equipment and machinery.

As you can see, without a carefully calculated financial plan, the firm has little chance for survival regardless of its product or marketing effectiveness. Most organizations have a manager in charge of financial operations. Generally, this chief financial officer is known as the treasurer or vice-president of finance. His duties are: planning, budgeting, obtaining funds, controlling funds (funds management), collecting funds (credit management), auditing, managing taxes, and advising top management on financial matters. As you can see, the fundamental charge is to obtain money and then plan, use, and control money effectively.

Financial planning is very important as a managerial function. It involves an analysis of the short and long-term picture of money flow to and from the firm. The overall objective of financial planning is to optimize profits and make the best use of money.

You are probably familiar with several finance functions, for example, the idea of buying merchandise on credit and collecting payment from buyers of the firms merchandise. Both credit and collections are important responsibilities of financial managers. The finance manager must also be sure that the company does not lose much money. Naturally, this means that finance is further respon­sible for collecting overdue payments. These functions are critical to all types of businesses but particularly important to small and medium-size businesses that typically have smaller cash or credit cushions than large corporations.

Taxes represent an outflow of cash from the business and must be paid. Therefore, they too fall under the scrutiny of finance. As tax laws and tax liabili­ties have changed, finance people have taken on the increasingly important re­sponsibility of tax management.

Tax management is the analyzing of tax implications of various managerial decisions in an attempt to minimize the taxes paid by the business. Businesses of all sizes must concern themselves with tax computation and tax responsibilities.

Finally, often someone in the finance department serves as an internal auditor (auditing). It's the internal auditor that checks on the journals, ledgers, and financial statements prepared by the accounting department to make sure that all transactions have been treated in accordance with established accounting rules and procedures. If there were no such audits, accounting statements would be almost worthless. Therefore, it's important that the internal auditor be objective and critical of any improprieties or deficiencies he or she might note in their evaluation. Regular internal audit offers the firm assistance in the important role of financial planning, and budgeting.

A budget is a financial plan. A budget becomes the primary basis and justification for financial operation in the firm.

Two of the most important pieces of information contained in every pro­spectus and annual report are the balance sheet and the income statement.

The balance sheet. For every business the things that it owns are assets and those that it owes are liabilities. The difference between the two, which is how more the business owns that it owes, is its net worth. In other words:

assets - liabilities = net worth or

assets = liabilities +net worth

Balance sheets are usually presented in the second form, with the assets on one side and the liabilities and net worth on the other.

The income statement. The income statement, or profit-and-loss statement as it is also called, shows how much a business has made or lost over a period of time (usually a year).

Text B

Companies and individuals often borrow money, and it is important to find a favourable interest rate. Rates are variable, and can rise or fall depending on the market. Many investors, (people who use their money to earn more money), choose foreign or offshore bank accounts because they are tax-free. Anyone can buy shares in a public company and become a shareholder. All public companies in the UK are obliged by law to publish their financial results at the end of the tax year. They do this in their annual report to shareholders. Annual reports include profit and loss accounts which show turnover, or the total sum of money which is coming into the company.