Finance and The Company Warming up

Ex. 1. Discuss the following questions.

1. What do you know about the financial and accounting side of business?

2. Would you like to work in the financial and accounting department of a company? Why or why not?

3. Do you think companies have much paperwork? What kind of paperwork do companies have?

Ex. 2. Look at the sample definition and define the words below.

E.g. Paperwork is the movement of documents involved in a transaction.

capital liabilities balance sheet fixed assets

current assets debtor creditor inflation

Ex. 3. a) Rearrange the order of operations involved in the transaction. The first one has been done for you.

You check the payment.
The customer places the order.
The customer checks the invoice.
You acknowledge the order.
You invoice the customer.
A potential customer makes an inquiry.	1
You produce and dispatch goods.
You quote a selling price.
The customer makes payment.

b) Describe the usual order of “paperwork” – the movement of documents in transaction.

Ex. 4. Compare actual to budget costs using the expressions above / up on and below / down on; express the variance using by.

Six months costs analysis January-July, 2010
Cost	Actual cost $ 000	Budget $ 000	Variance favorable / adverse, $ 000
Direct wages Direct materials Factory costs Indirect wages Selling and distribution Administrative costs	9,550 12,500 3,760 4,350 2,550 2,960	9,000 11,000 3,500 4,500 2,750 2,700	(550) (1,500) (260) 150 200 (260)
TOTAL COSTS	35,670	33,450	(2,220)

Listening

Ex. 5. а) Listen to this Finance Director and complete the balance sheet with the correct numbers.

b) Now use the information in the balance sheet to complete these calculations.

1. Working capital (current assets – current liabilities) = ... .

2. Total net asserts (fixed assets + working capital) = ... .

Ex. 6. Complete each space in the text with the following words from the box.

demand inelastic elastic economic falls inverse

percentage increases direct economists income price

Demand for a product is affected by a range of variables. Two key variables are the (1) price of the product, and consumers’ (2) ... . According to (3) ... theory, there is normally an (4) ... relationship between the price of a product and the quantity demanded of that product. As price (5) ... , the quantity demanded increases. There is else normally a (6) ... relationship between consumers' income and the quantity demanded at any given price; i.e. as consumers’ income increases, demand (7) ... . The (18) ... for some products is very responsive to changes in price or in consumers’ income. A certain (9) ... change in price or income leads to a greater percentage change in the quantity demanded. (10) ... describe such products as having (11) ... demand. The demand for some other products is much less responsive to changes in price or income, These products are said to have (12) ... demand.

Ex.  7. a) Using the following notes plus your own ideas, write a letter in your notebook offering advice to a friend who is trying to reduce expenses in his / her small hotel business.

b) In pairs, role-play a conversation in which two friends compare and discuss problems they have had in managing expenses.