52973

TAXATION. WHAT ARE TAXES?

Конспект урока

Педагогика и дидактика

Businesses and individuals are subject to many forms of taxes. The various forms of business organization are not taxed equally. The tax situation is simplest for proprietorships and most partnerships; corporations or companies are treated differently.

Английский

2014-02-20

528 KB

12 чел.

Read the text.

TAXATION

WHAT ARE TAXES?

Taxes are a compulsory financial contribution by a person or body of persons towards the expenditure of a public authority. In modern economies taxes are the most important source of government revenues. Taxes on income (i.e. on wages, salaries, profits, dividends, rent and interest) and on capital are known as "direct" taxes. Taxes on commodities or services are known as "indirect" taxes.

Taxes are considered to have three functions:

  1.   fiscal or budgetary, to cover government expenditure, to provide the public authorities with the revenue required for meeting the cost of defense, social services, interest payments on the national debt, municipal services, etc.;
  2.   economic, to give effect to economic policy, to promote stable economic growth, to influence the rate of economic growth of the nation;
  3.   social, to increase the economic welfare of the community, to lessen inequalities in the distribution of income and wealth.

Businesses and individuals are subject to many forms of taxes. The various forms of business organization are not taxed equally. The tax situation is simplest for proprietorships and most partnerships; corporations or companies are treated differently.

In the United States of America nearly all of the federal government's revenues come from taxes. By far the most important source of tax revenue is the personal income tax. Gross receipts from corporate income taxes yield a far smaller percentage of total federal receipts. Individual states levy their own taxes. As a result, for example, the profits of a corporation are liable to federal and sometimes state corporate income taxes. This often imposes a double tax burden1. When the after-tax income is paid out to stock-holders2 as dividends, it is then taxed again as personal income.

In the United Kingdom there is no single code of tax law, the body of tax legislation being increased by each year's Finance Act.3

The United Kingdom operates a "schedular" system,4 whereby taxable income from different sources is calculated and taxed under the rules of a particular "schedule".

Tax assessments5 are normally based on returns issued by the Board of Inland Revenue6 (referred to simply as "Inland Revenue") for completion7 by the taxpayer. While companies may receive tax returns, they normally submit instead a copy of their annual accounts together with a computation of taxable profits.8

The United Kingdom does not yet operate a system of self-assessment9 for tax on income and capital gains10, but it is being introduced at the moment.

Under Ukrainian law, all Ukrainian legal entities, whether they have foreign investment or not, are subject to the profit tax law. Foreign entities that have a taxable permanent establishment11 in Ukraine are also taxed under this law.

Ukrainian taxes provide revenue for three tiers of the budget: state, regional and local. The major taxes paid to the budget are: Profit tax; Value-added tax (VAT)12; Securities tax13; Withholding tax14.

The Ukrainian government tries to create a climate in which business can thrive, to keep the tax burden as low as possible. It also attempts to eliminate tax allowances, which deprive the budget of tax revenues, and to improve tax collection.

Tax returns for Ukrainian legal entities are audited by the tax authorities15 at the time they are submitted.

If the company or a person assessed believes the assessment is incorrect in any way, an appeal may be lodged16 against it. The appropriate financial organ is required by law to reply to such an appeal within five days.

When a company resident17 in one country receives income or gains from a source in another, or when shareholders and company are domiciled18 in different countries it is possible that incomes arising will be taxable in each country, i.e. taxed twice. Many countries seek to mitigate19 the potentially harmful effects of double taxation20 by entering with other countries into double tax treaties21, or arrangements22 preventing the same income being taxed twice.

A number of countries have problems because of significant taxpayer non-compliance.

Along with cases of illegal evasion23 of tax obligations there are entirely legal ways of avoidance by which a person may so arrange his affairs as to minimize, or even eliminate, tax liability24 on his property and income.

Words you need:

1 double tax burden - тягар подвійного оподаткування

2 stock-holder - акціонер   

3 the body of tax legislation being increased by each year's Finance Act - причому законодавство про податки поширюється за рахунок нових податків, які вводяться щорічно при прийнятті фінансового акту

4 The United Kingdom operates a "schedular" system - у Великобританії існує система «шедул», (частини , на які поділені прибутки у залежності від їх джерела

5 Tax assessments - установлення податкових ставок; визначення розміру прибутку, який обкладається податком

6 Board of Inland Revenue (referred to simply as "Inland Revenue") - Податкова служба Великобританії  

 7completion - заповнення   

8 taxable profit - прибуток, який обкладається податком   

9system of assessment - система,  при якій розмір прибутку, який підлягає оподаткуванню, визначається безпосередньо платником податків

10 capital gains - прибуток від приросту капіталу

11 taxable permanent establishment - підприємство, яке працює постійно та обкладається податком

12 Value-added tax (VAT) - податок на прибавлену вартість

13Securities tax - прибуток на цінні папери

 14Withholding tax - прибуток з суми дивідендів

15 tax authorities - податкові органи

16 be lodged - подавати апеляційну скаргу

17 resident - який постійно живе у країні

18 domicile - поселитися на постійне місце проживання

19 to mitigate - зменшувати, пом’якшувати

20 double taxation - подвійне оподаткування

21 double tax treaties - договір про запобігання подвійного оподаткування

22 arrangements - заходи

23 evasion of tax obligations - ухилення від податкових зобов’язань

24 tax liability - зобов’язання по сплаті податків

Exercises

1. Answer the questions.

  1.  What are taxes?
  2.  What are the purposes of direct and indirect taxation?
  3.  Are businesses taxed equally?
  4.  How is taxation levied in the UK?
  5.  What taxes are paid to the state budget?
  6.  What bodies collect taxes?
  7.  Do taxpayers have the right to appeal against additional tax liability?
  8.  What is the difference between tax evasion and tax avoidance?
  9.  In what situations can incomes be taxed twice?

2. Find in the text English equivalents for the following Ukrainian phrases:

Прибутковий податок; податок на заробітну плату; податок на заробітну плату службовців; податок на прибуток податок на дивіденди; податок на рентні сплати; податок на відсотковий прибуток; податок на капітал; прямі податки; непрямі податки; покривати витрати; відсоткові сплати по зовнішньому боргу; добробут громади; підлягають обкладенню податком; відноситися по-різному; прибуток після оподаткування; податкова декларація; податок на прибавлену вартість; збирати податки; проводити аудиторську перевірку; подавати апеляційну скаргу; відхилення від податкових зобов’язань, яке є незаконним; заборгованість по податковим виплатам.

3. Find the pairs of synonyms and antonyms.

Considerable, to buy, advantage, almost, mostly, great, home, expenditure, provided, unemployed, to need, to produce, to supply, to lead to, taxable, unproductive, efficient, to purchase, spending, to cut, to levy, taxed, productive, employed, to require, disadvantage, to sell, to provide, to impose, to reduce, domestic, to give rise to.

4. Think of the verbs that are commonly used with:

tax, taxation, profits, revenue, complaint, claim, effects, non-compliance, tax rate, burden of taxation, privilege, income, exemptions;

5. Think of the nouns that are most often used with:

to levy, to collect, to tax, to impose, to introduce, to pay, to reduce, to avoid, to evade, to exempt;

6. Make your own sentences with any five word combinations from (b) and (c).

7. Match the verbs from (a) with nouns from (b) below:

a) to reduce b) economic welfare

to improve taxes

to correct inequality

to increase revenue

to check imports

to withhold business

to tax adverse balance of payments

8. Say how the following words are formed.

Partnership     taxpayer

Assessment     employee

Installment     employer

Completion     independence

Deduction     reference

Information     emergency

application

9. Make up sentences putting the words in the correct order.

  1.  Taxes, considered, to, are, three, have, functions.
  2.  Businesses, are, and, subject, individuals, forms, to, of, many, taxes.
  3.  All, entities, Ukrainian, legal, are, to, subject, law, tax, profit.
  4.  Ukrainian, provide, taxes, tiers, of, budget, three, revenue, for, the.
  5.  Ukrainian, eliminate, to, government, attempts, allowances, tax.

10. Complete the sentences with the following words: corporation taxes, income taxes, a tax year, financial, fiscal, assessment, installments, tax.

  1.  Individuals, partnerships and trusts pay……
  2.  Income tax and capital gain tax are charged for….
  3.  A tax year is sometimes called…..year or year of…..  .
  4.  Corporations taxes are charged for a …..year.
  5.  Individuals usually pay taxes in two….
  6.  Companies pay…  .
  7.  An amount of money taken by central or local government from people’s income or company profits and used for public spending is called… .

11. Write down the Ukrainian equivalents;

Board of Inland Revenue, to lodge an appeal, tax coding, tax office, tax year, tax position.

12. Find and read sentences explaining the title of the text.

13. Find in the text sentences expressing such ideas.

  1.  Everybody must pay taxes.
  2.  There are two forms of taxes.
  3.  We know three functions of taxes.
  4.  Partnerships and proprietorships from the one hand and corporations and companies are the subjects of different taxation.
  5.  The personal income tax is the most important source of tax revenue.
  6.  The systems of taxation in UK and the USA differ from each other.
  7.  Ukrainian taxes provide revenue for three tiers of the budget.
  8.  The tax authorities audit tax returns.

14. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  Taxes on commodities or services are known as direct taxes.
  2.  High tax rates are said to reduce the intensity of work.
  3.  If half of all we earn goes to the government, we may prefer to work fewer hours a week and spend more time in the garden or watching television.
  4.  Most of public expenditure is financed through taxation and government borrowing.
  5.  All the forms of business organizations are taxed equally.
  6.  Ukrainian taxes provide revenue for two tiers of the budget: regional and local.
  7.  If you receive income from a source in another country, you will pay taxes twice.

15. Find the definitions to the next terms:

direct tax, indirect tax, tax burden, tax revenue, income tax, corporation tax, value added tax, sales tax, excise duty, tax rate, taxable income, public goods, tax.

  1.   A form of indirect tax which is included in the selling price of a product and which is eventually paid by the consumer.
  2.   An indirect tax which is based on the difference between the value of the output over the value of the input used to produce it.
  3.   The percentage rate at which a tax is levied on income or expenditure.

The money raised by government through imposing taxes.

  1.   A tax levied by the government on goods and services in order to raise revenue, such as value added tax and excise duty.
  2.   Goods and services provided by the state for all or most of the population such as education, health, housing, etc.
  3.   A tax levied by the government on the income or property of households or businesses.
  4.   A direct tax levied by the government on the income (wages, rent, dividends) received by households.

The amount of an individual's income on which a tax is levied.

  1.   The total amount of taxation paid by the population of a country in the form of income tax, corporation tax, value added tax, etc.
  2.   A direct tax levied by the government on the profits of businesses.
  3.   An indirect tax levied by the government on certain goods, typically tobacco, oil, and alcoholic drink.
  4.   An amount of money taken by central or local government from people’s income or company profits and used for public spending.

16. Divide the text into logical group and give them titles.

17. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

18. Prepare a short talk on the following:

  1.  The tax climate in Ukraine; recent changes in tax legislation. Give your opinion on whether they are good for the health of the economy as a whole. Say what you think about the possible impact on the survival of small firms.
  2.  Are you the type of person who should start a small business? Explain why or not.
  3.  Are people beginning to understand that to pay taxes is in their interest?
  4.  How do taxes in Ukraine compare with taxes in other countries?
  5.  What is the difference between tax evasion and tax avoidance?
  6.  What measures, in your opinion, can improve tax collection in Ukraine?

Grammar Exercises

1. Name the number of the sentences where the word most has the meaning a) «більшість, більша частина», в) « вельми, вкрай» ( весьма, крайне).

  1.  In modern economies taxes are the most important source of government revenues.
  2.  By far the most important source of tax revenue is the personal income tax.
  3.  In 1999 there was a most sharp fall in world oil prices.
  4.  In a situation of full employment, the supply of most goods and services will be inelastic.
  5.  With some groups of population, payments from social security funds may be a most important contribution to household incomes.

2. Change the word order in the sentences using the Subjective Infinitive Complex.

Economists believe unemployment benefits to stop from looking for a job. - Unemployment benefits are beleived to stop people from looking for a job.

  1.  Economists think youth employment to be low in Germany education is subsidized by the state.
  2.  Economists consider government spending cuts to be necessary in order to cut taxes.
  3.  Economists say economic system to be the particular way in which the economic activity in a country is organized.
  4.  Economists believe workers in poor countries to be much 1ess productive as a result of bad working conditions.
  5.  Statistics say the 16 percent of world population living in the industrial countries receive nearly 80 percent of the world income.

We know public goods to be paid for out of general taxation.

We know a subvention to be money given by a government, a person or an organization to help somebody do something for the good of the public, for example, in education or sciences.

8. We consider a subsidy to be money given by a government to certain producers to help them to produce at a low price goods and services needed by the public.

Unit 13

international monetary system    міжнародна валютна система

international monetary institutions    міжнародні фінансові організації

to reconcile      примиряти

balance-of-payments position     стан платіжного балансу

to settle accounts      урегулювати рахунки

adjustment      коректування, виправлення

payment imbalances     нерівновага виплат

employment opportunities     вакансії

exaggeration      прибільшення

to leave smb. worse off     ставити когось в невигідне положення

imposition of controls     введення контролю

1. Read sentences only with new lexis and translate them.

  1.  Employment opportunities for some workers are improved when exports thrive and are weakened for other workers when foreign products compete effectively in price or quality with domestic output.
  2.  Interdependence among nations has intensified lately.
  3.  The international monetary system is concerned with the financing of payments imbalances among countries by the use of credit or reserves.
  4.  The International Monetary Fund, an association of governments was set up on 27th December, 1945.
  5.  A movement in the exchange rate may benefit an individual in one his roles but leave him worse off in another.

2. Put the missing letters.

Int..rn..at…nal, mon..t..ry, s..stem, exag..r..ti..n, o..o..tunities, imp..s..t..on of contr..ls, ad..ust, rec..nc..le, to s..ttle a..ounts.

Read the text.

INTERNATIONAL MONETARY SYSTEM

INTERNATIONAL MONETARY INSTITUTIONS

There is little exaggeration in saying that international monetary developments affect all individuals as workers, consumers, travellers, businessmen producing goods for domestic or foreign markets, and investors at home or abroad. The channels which transmit the impact of monetary events to people in their various roles in society are numerous.

Employment opportunities for some workers are improved when exports thrive and are weakened for other workers when foreign products compete effectively in price or quality with domestic output. A movement in the exchange rate may benefit an individual in one his roles but leave him worse off in another. The individual as a consumer may have a different view of and a different interest in what happens in the international monetary sphere from that of the individual as a worker.

Business activity is heavily influenced by international monetary conditions affecting prices, exchange rates, interest rates, imposition of controls on exports or imports or on capital movements.

Interdependence among nations has intensified lately, thus there is great interest in the functioning of the international monetary system. The international monetary system is a set of arrangements, rules, practices, and institutions under which payments are made and received for transactions carried out across national boundaries1. The international  system is  concerned not  only with  the supply  of international money but with the relationships among the hundred or so currencies of individual countries and with the pattern of balance-of-payments relationships and the manner in which they are adjusted land settled.

International monetary relations are governed by rules of the Articles of Agreement2 of the International Monetary Fund3 and also by agreements and consultations among nations through other international institutions: the General Agreement on Tariffs and Trade (GATT)4, the Organization for Economic Cooperation and Development (OECD)5, the Bank for International Settlements (BIS)6, the United Nations Conference on Trade and Development (UNCTAD)7, the World Bank Group8 and other organizations.

The international monetary system is afflicted with problems9. The main reason is that the nations that participate in it are politically independent but economically and financially interdependent.

This discrepancy10 determines the functions of the international monetary system; at its best, the system acts to reconcile the conflicting economic policies of its politically independent members.

In order to perform this reconciling function, the system is concerned, first, with how nations act to influence their balance-of-payments positions, with their policies that affect exchange rates.

The system is concerned, second, with how nations settle their accounts11 with one another. Third, the system is concerned with the amount and form of international money.

In broad terms12, the international monetary system involves the management, in one way or another, of three processes:

  1.   the adjustment of balance-of-payments positions, including the establishment and alteration of exchange rates13.
  2.   the financing of payments imbalances among countries by the use of credit or reserves; and
  3.   the provision of international money.

Words you may need:

National boundaries1- державні кордони

Articles of Agreement2 - устав

International Monetary Fund3 - Міжнародний Валютний Фонд

the General Agreement on Tariffs and Trade (GATT)4 - Генеральне положення про тарифи та торгівлю

the Organization for Economic Cooperation and Development (OECD)5 - Організація економічного співробітництва та розвитку

the Bank for International Settlements (BIS)6 - Банк міжнародних розрахунків

the United Nations Conference on Trade and Development (UNCTAD)7 - Конференція ООН з торгівлі та розвитку

the World Bank Group8 - група Світового банку

is afflicted with problems9 - обтяжувати проблемами    

discrepancy10 - розходження, протиріччя

to settle accounts11 - урегулювати розрахунки

broad terms12 - у широкому смислі

establishment and alteration of exchange rates13 - установлення та зміна обмінних курсів

Exercises

1. Answer the questions:

  1.  In what way are individuals affected by international monetary developments?
  2.  What is the international monetary system?
  3.  What is the international monetary system concerned with?
  4.  What are the international monetary relations governed by?
  5.  What are the major international monetary institutions?
  6.  Is the international monetary system afflicted with problems?

2. Find English equivalents for the following Ukrainian phrases.

Не буде великим прибільшенням сказати; позначатися на людях; шляхи, якими передається цей вплив різноманітні; число вакансій збільшується; експорт процвітає; конкурувати по цінам і по якості; зміна валютного курсу; введення експортного контролю; міжнародна валютна система це совокупність угод, правил, організацій і т.д.; характер взаємовідносин платіжних балансів; взаємовідносини регулюються; бути залежними економічно;  визначати функції; положення з платіжним балансом; коректування  положення з платіжним балансом; установлення та зміна валютних курсів.

3. Find the pairs of synonyms and antonyms.

Affect, thrive, dependence, impact, long-term, independence, weaken, short-term, to implement, permanent, to pursue, temporary, to exaggerate, to improve, to reduce, to make worse, discrepancy, agreement.

4. Match the verbs from (a) with the nouns from (b) below:

a)To address

To affect

To provide

To define

To reconcile

To impose

To strengthen

To adjust

To settle

b)Export controls

Individuals

Relationship

Interests

Accounts

Benefits

Functions

Problems

Impact

 

5. Think of the verbs that are most commonly used with:

payments, transaction, monitoring, inflation, project, maladjustments, balance, subscription, loans, fiscal issue.

6. Think of the nouns that are most often used with:

to govern, to set up, to found, to establish, to negotiate, to support, to correct, to assist, to draw, to maintain, to relieve, to consult, to repay.

7. Make up your own sentences with any five words from 5. and 6.

8. Form adverbs from the following adjectives:

Successful, heavy, certain, extreme, serious, equal, rapid, previous, especial, political, independent, international.

9. Make up sentences putting the words in correct order.

  1.  International, relations, by, are, of, the, of, Agreement, governed, monetary, rules, the, Articles, of, of, the, Monetary, International, Fund.
  2.  The, monetary, international, is, a, set, system, of, arrangements, practices, rules, under, which, and, payments, institutions, are made, and, for, received, transactions, out, carried, national, across, boundaries.
  3.  The, system, international, concerned, about, is, the, among, relationship, the, of, hundred or, of, individual, so currencies, countries, monetary.
  4.  The, monetary, is, system, afflicted, international, problems, with.
  5.  The, monetary, to reconcile, system, acts, international, the, economic, conflicting, its, politically, of, members, independent.

10. Complete the sentences with the following words: the international monetary system, international Monetary Fund, payments imbalances, imposition of controls, leave him worse off, employment opportunities.

1. …. for some workers are improved when exports thrive and are weakened for other workers when foreign products compete effectively in price or quality with domestic output.

2. Business activity is heavily influenced by international monetary conditions affecting prices, exchange rates, interest rates, …… on exports or imports or on capital movements.

3. …. is a set of arrangements, rules, practices, and institutions under which payments are made and received for transactions carried out across national boundaries.

4. The international monetary system involves the management, in one way or another, of three processes and one of them is the financing of …… among countries by the use of credit or reserves.

5. A movement in the exchange rate may benefit an individual in one his roles but ……. in another.

6. …a specialized agency of the United Nations encouraging international monetary co-operation and international trade.

11. Write down the Ukrainian equivalents.

Articles of Agreement

International Monetary Fund

The General Agreement on Tariffs and Trade (GATT)

The Organization for Economic Cooperation and Development (OECD)

The Bank for International Settlements (BIS)

The United Nations Conference on Trade and Development (UNCTAD)

The World Bank Group

12. Find and read sentences explaining the title of the text.

13. Find in the text sentences expressing such ideas.

  1.  The international monetary developments affect the lives of all people.
  2.  The international monetary system touches a lot of problems.
  3.  The international monetary system works according to the rules.
  4.  The reason of monetary system problems is in the politically independence of nations and in the same time in their economically and financially interdependency.
  5.  The international monetary system is concerned with three main problems.

14. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  The international monetary system influences only on the lives of businessmen.
  2.  Employment opportunities for workers depend on the economical situation in their country and have no any connection with the international monetary system.
  3.  Business activity is heavily influenced by international monetary system.
  4.  The international system is concerned only with the supply of international money.
  5.  International monetary relations are governed by rules.
  6.  The international monetary system is not afflicted with problems.
  7.  The problem how nations settle their accounts with one another is not the problem of the international monetary system.
  8.  The international monetary system involves the management of three processes.

15. Divide the text into logical group and give them titles.

16. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

Grammar Exercises

1. a) Supply the articles where necessary.

  1.   Write down 3-5 questions about the text.
  2.   Describe the purposes for which the IMF was set up.

The International Monetary Fund

The International Monetary Fund, an association of governments was set up on 27th December, 1945, as a result of the Bretton Woods Agreements which were designed to translate the bitter lessons of global depression into ... stable and cooperative international monetary system. The organizational structure of the IMF is set out in its Articles of Agreement, which entered into ... force in December 1945. The goals of... IMF are to promote international monetary cooperation through a permanent institution; to facilitate the expansion and balanced growth of international trade; to promote exchange stability; to assist in the establishment of a multilateral system of payments in respect of current transactions between members; and to provide members with an opportunity to correct maladjustments in their balance of payments without resorting to measures destructive to national and international prosperity.

Over many years the IMF has been directly involved in supporting ... efforts of developing countries to pursue broad structural reforms and achieve sustainable growth. As of August 1, 1994, 179 countries were members of the IMF. Each member government has been set ... quota to be paid into the Fund, payable partly in ... gold and partly in the member's own currency; the quota determines the member's voting power and ... amount of foreign exchange that it may draw from the Fund. A member may purchase foreign exchange, paying its own currency, but ... member must "repurchase" its own currency within three or, at the outside, five years to maintain the balance in the Fund pool. Currencies drawn from the Fund may be used to relieve ... member's balance-of-payments difficulties; the funds may not be used for military purposes or for programmes of economic development. The aim is to assure ... maintenance of fixed exchange rates in the face of short-term fluctuations. Many countries have been helped in this way. Each member undertakes to establish and maintain an agreed par value for its currency, and to consult the Fund on any change in ... initial parity. In addition, the Fund consults with members on their international financial situation and on specific problems as they arise. On request, the Fund furnishes expert missions to advise and assist... governments in working out monetary problems on the spot. In any event, members are kept informed of... latest developments. Policies are laid down by a Board of Governors, representing all members, which normally meet annually. Many of its powers are delegated to a Board of Executive Directors. In recent years, the resources of the Fund have been supplemented by resources of... Group of Ten.

Words you may need:

to be designed                                             бути призначеним

to enter into force                                        вступати в силу

balanced                                                      збалансований

multilateral system                                      багатостороння система

in respect of                                                 в відношенні

to correct maladjustments                           виправляти диспропорції

resort (to) v                                                 удаватися до

structural reforms                                        структурні реформи

voting power                                               голоси в органах, які керують

purchase v                                                   купувати

to maintain the balance                               підтримувати баланс

2. Prepare the short talk on the following:

  1.  In what way are individuals affected by international monetary developments?
  2.  Relations between Ukraine and international institutions such as GATT, OECD, BIS, UNCTAD, IMF. In what ways do countries benefit from the membership in these organizations?
  3.  Your opinion on Ukraine’s borrowings from the IMF. Is it the only way to cover the budget deficit?

Unit 14

bond market     ринок облігацій

maturity      строк боргового зобов’язання

to back      гарантувати, давати поручительство

to deal (in)      торгувати

to debt financing     фінансування шляхом отримування позики

equity financing     мобілізація капіталу за допомогою випуску акцій

share      доля

debtor      боржник

lender      кредитор

to underwrite     гарантувати розміщення цінних паперів

hard-currency market    ринок твердої валюти

short-term securities    короткострокові цінні папери

to issue stock     випускати акції

to trade      проводити угоди на ринку цінних паперів

1. Read sentences only with new lexis.

  1.  Money markets deal in short-term securities having maturities one year or less.
  2.  Mortgage bonds are debt that is secured by the pledge of specific property.
  3.  There is no uniform system for classifying the global bond markets.
  4.  Some sources of funds available to businesses (like issuing stock) are not available to governments.
  5.  A bond is an instrument in which the issuer (debtor/borrower) promises to repay to the lender/investor the amount borrowed plus interest over some specified period of time.
  6.  When revenues fall short expenditures governments go into debt-they borrow short- long-term funds by issuing bonds.

2. Put the missing letters.

b..nd m…ket, m..t..r..ty, de..l, short-t..m sec.r…ties, e..ty financing, sh.re, de..tor, l..nd..r, to i…..ue, under…te.

3. Work in pairs.

One student has to name all the words she/he memorised from the word list another student has to translate them.

Read the text.

FINANCIAL MARKETS. THE BOND MARKET. TRADING IN THE BOND MARKET

People and organizations wanting to borrow money are brought together with those having surplus funds in the financial markets.

There are a great many different financial markets, each one consisting of many institutions, dealing with different instruments in terms of the instrument maturity1 and the assets backing it, and serving different types of customers.

Generally, financial markets are classified as money or capital markets2 and primary or secondary markets.

Money markets deal in short-term securities having maturities one year or less. Capital markets deal in long-term securities having maturities greater than one year. An investor who purchases new securities is participating in a primary financial market. An investor who resells existing securities is participating in a secondary financial market.

So, when businesses, units of government or individuals cannot satisfy their needs for funds by revenue from sales of goods and services, they can turn to either debt financing (any process by which the firm gets cash or some other assets in return for a promise to pay an agreed upon sum plus interest) or equity financing (any process by which a firm raises funds in return for a share in its ownership management).

Some sources of funds available to businesses (like issuing stock) are not available to governments. When revenues fall short expenditures3 governments go into debt4-they borrow short-long-term funds by issuing bonds.

A bond is an instrument in which the issuer (debtor/borrower) promises to repay to the lender/investor the amount borrowed plus interest over some specified period of time. It should be stressed that one of the most important characteristics of a bond is the nature of its issuer5. Issuers include federal (central) governments and their agencies, supranational6 (such as the World Bank, the Asian Development Bank), municipal governments, and nonfinancial and financial corporations.

By far7 the largest issuers are central governments.

There is no uniform system for classifying the global bond markets. Quite a number of financiers consider it appropriate to use the following classification. From the perspective of a given country, the global bond market can be classified into two markets: an internal bond market and an external bond market. The internal bond market is also called the national bond market. It can be decomposed8 into two parts: the domestic bond market and the foreign bond market.

The domestic bond market is where issuers domiciled9 in the country issue bonds and where those bonds are subsequently traded. The foreign bond market of a country is where bonds of issuers not domiciled in the country are issued and traded.

Bonds traded in the US foreign bond market are nicknamed10 Yankee bonds. In Japan, foreign bonds issued by non-Japanese entities are nicknamed Samurai bonds. Foreign bonds in the United Kingdom are nicknamed bulldog bonds, in the Netherlands-Rembrandt bonds and in Spain - matador bonds.

The external bond market, also called the international bond market, includes bonds with several distinguishing features: 1) they are underwritten by an international syndicate, 2) at issue they are offered simultaneously to investors in a number of countries, 3) they are issued outside the jurisdiction of any single country, and 4) they are in unregistered form. The external bond market is commonly referred to as the offshore bond market, or more popularly, the Eurobond Market. The Eurobond Market is divided into different submarkets11 depending on the currency in which the issue is denominated.

Computerization in bond markets has reduced costs of trading bonds and made them more convenient to hold and transfer: they are not issued in certificate form - they are only computer entries.

Words you need:

in terms of the instrument maturity1 - з точки зору терміну погашення фінансового інструменту

capital markets2 - ринок довгострокового позичкового капіталу

When revenues fall short expenditures3 - Коли прибутки менше ніж витрати

governments go into debt4- уряди здійснюють запозичення

issuer5 - емітент(особа, яка випускає облігації) цінних паперів

supranational6 - наднаціональна організація

By far7 - значною мірою

decompose8 - розкладати на складові частини

domiciled9 - який постійно проживає

submarkets11 - субринок

Exercises

1. Answer the questions.

  1.  What role do financial markets play?
  2.  In what ways do financial markets differ?
  3.  How can financial markets be classified?
  4.  In what way can capital be raised?
  5.  What ways of raising capital are available for governments?
  6.  What is a bond?
  7.  How can the global bond market be subdivided?
  8.  In what forms can government bonds be issued?

2. Find in the text English equivalents for the following Ukrainian phrases:

Мати справу з різними фінансовими інструментами; обслуговувати клієнтів; з терміном виплати менше одного року; брати участь в угодах на ринку; первинний(вторинний) фінансовий ринок; звертатися до; фінансування шляхом отримування позики; мобілізація капіталу за допомогою випуску акцій; випускати облігації; обговорений строк; емітент; єдина система класифікації; внутрішній ринок облігацій; емітент, який не проживає постійно у країні; облігації, якими торгують на ринку; випуск облігацій гарантовано міжнародним синдикатом; випускати у незареєстрованій формі; офшорний ринок облігацій; скоротити затрати, які пов’язані з купівлею та продажем облігацій; випускати облігації у формі сертифікату; випускати облігації у формі запису у комп’ютері.

3. Think of the verbs that are commonly used with:

Maturity, bond, stock, issue, investor, banks, return, depository, sale, credit, credit rating, placement.

4. Think of the nouns that are most often used with:

To raise, to sell, to issue, to borrow, to trade, to divide, to float, to create, to participate, to develop, to attract, to negotiate, to mature, to place, to generate.

5. Make your own sentences with any five word combinations from 3. and 4.

6. Match the verbs from (a) with nouns from (b) below:

a)   to bring together

to classify

to underwrite

to invest into

to speed up

to raise

to broaden

to rely on

to enhance

to issue

b) capital

people

issue

debt financing

role

use

real sector

financial instruments

placements

bonds

7. Make up sentences putting the words in the correct order.

  1.  Money, deal, in, markets, securities, short-term, of, maturities, having, or, less, one, year.
  2.  Financial, are, as, or, capital, money, markets, classified, markets, and, or, secondary, primary.
  3.  Capital, deal, in, markets, securities, long-term, maturities, having, greater, one, than, year.
  4.  Some, available, sources, of, funds, to, are, not, available, businesses, government, to.
  5.  There, is, uniform, no, for, system, the, global, classifying, bond, markets.
  6.  The, internal, market, bond, the, national, is, bond, also, market, called.  

8. Complete the sentences with the following words: bond, financial markets, short-term securities, long-term securities, internal and external bond markets, national bond market, foreign bond market, domestic bond market, foreign bond market, domestic bond market, the international bond market.

  1.  .… are classified as money or capital markets and primary or secondary markets.
  2.  .…. is an instrument in which the issuer (debtor/borrower) promises to repay to the lender/investor the amount borrowed plus interest over some specified period of time.
  3.  Money markets deal in ….. having maturities one year or less.
  4.  The global bond market can be classified into two markets: … .
  5.  Capital markets deal in ………….having maturities greater than one year.
  6.  The internal bond market is also called the ……….. .
  7.  The national bond market can be decomposed into two parts:…….. .
  8.  The external bond market, also called the………. .
  9.  …….is where issuers domiciled in the country issue bonds and where those bonds are subsequently traded.

10. ………of a country is where bonds of issuers not domiciled in the country are issued and traded.

9. Find and read sentences explaining the title of the text.

10. Find in the text sentences expressing such ideas.

  1.  Financial markets play an important role for people and organizations.
  2.  The classification of financial markets depends on the work of institutions, dealing with the different instruments in terms of the instrument maturity and the assets backing it, and serving different types of customers.
  3.  Capital markets and money markets deal in securities.
  4.  Debt financing and equity financing can satisfy the individual’s needs for money.
  5.  Government and businesses can not have the same sources of funds.
  6.  A bond is a formal document acknowledging the existence of a debt.
  7.  We can classify the global bond market into two markets.
  8.  The internal bond market and the national bond market is the same one.
  9.  The difference between domestic bond market and the foreign bond market is in the place where the issuers of bonds are situated.
  10.  The external bond market has some distinguishing features.
  11.  The reducing of cost of trading bonds deals with computerization in bond market.

11. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  Due to the computer entries increased the costs of trading bonds.
  2.  The Eurobond Market is divided into different submarkets depending on the currency in which the issue is denominated.
  3.  We have to pay attention to the peculiarities of bonds, in different countries they have the same nickname.
  4.  The domestic bond market is where bonds of issuers not domiciled in the country are issued and traded.
  5.  The foreign bond market of a country is where bonds issuers domiciled in the country issue bonds and where those bonds are subsequently traded.
  6.  The external bond market can be decomposed into two parts: the domestic bond market and the foreign bond market.
  7.  Issuers include federal (central) governments and their agencies, supranational (such as the World Bank, the Asian Development Bank), municipal governments, and nonfinancial and financial corporations.
  8.  Bond is a formal document acknowledging the existence of a debt; securities issued by a government or a company.
  9.  Borrowing means the receiving money from a bank or other financial organization on the condition that is paid back later, with interest.
  10.  Offshore means based or registered abroad.
  11.  The offshore bond market is the same as international bond market.

12. Find the definitions to the next terms: short-term securities, long-term securities, bond, domestic bond market, foreign bond market, money market, capital market.

  1.  It is an instrument in which the issuer (debtor/borrower) promises to repay to the lender/investor the amount borrowed plus interest over some specified period of time.
  2.  The securities which have the maturity about one year or less are named…. .
  3.  Market which deal in short-term securities is named… .
  4.  Market is where issuers domiciled in the country issue bonds and where those bonds are subsequently traded.
  5.  The securities which have the maturity greater than one year are called…. .
  6.  Market of a country where issuers of bonds are situated in another country but bonds are issued and trade in this country is called…. .
  7.  These markets deal in long-term securities.

13. Divide the text into logical group and give them titles.

14. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

US Government Securities

a) Look through the text below to say what types of securities are described in it.

b) Reread the text more carefully and explain how the US government uses debt instruments.

The US government relies heavily on debt financing. Since the 1960s, revenues have seldom covered expenses, and the differences have been financed primarily by issuing debt instruments. Moreover, new debt must be issued in order to get the necessary funds to pay off old debt that comes due.

About two-thirds of the public debt is marketable, meaning that it is represented by securities that can be sold at any time by the original purchaser through government security dealers.

Marketable issues include Treasury bills, notes, and bonds.

US Treasury Bonds have maturities greater than ten years at the time of issuance, with denominations ranging from $1,000 upward. Some Treasury bond issues have call provisions under which the Treasury has the right to force the investor to sell the bonds back to the government at par value.

US Savings Bonds are nonmarketable securities, offered only to individuals and selected organizations. There is a limit to the amount that may be purchased by any person in a single year. Two types are available: pure discount bonds and bonds that pay interest semiannually but can be redeemed for par value at any time.

To support credit for home purchase, the government has authorized the issuance of participation certificates. The most important certificates of this type are those issued by the Government National Mortgage Association (GNMA or "Ginnie Mae"), they are known as GNMA Modified Pass-Through Securities. Unlike most bonds, GNMA pass-through securities pay investors on a monthly basis an amount of money that represents both a pro rata return of principal and interest on the underlying mortgages.

US Corporate bonds. Corporate bonds are similar to other kinds of fixed-income securities. An issue of bonds is generally covered by an indenture, in which the issuing corporation promises a specified trustee that it will comply with a number of stated provisions, like the timely payment of required coupons and principal on the issue. The major types are as follows:

Mortgage bonds are debt that is secured by the pledge of specific property. In the event of default, the bondholders are entitled to obtain the property in question.

Collateral trust bonds are debt-backed by other securities that are usually held by the trustee.

Debentures are general obligations of the issuing corporation representing unsecured debt. A bond indenture will often require the issuing corporation to make annual payments into a sinking fund.

Words you may need:

treasury bond - довгострокові казначейські облігації

call provision - умова позики, яка передбачає право емітента  достроково викупити цінні папери

par value - паритет, номінал

participation certificate - сертифікат участи

Government   National  Mortgage  Association  (GNMA) - Урядова Національна іпотечна асоціація

pass-through security - цінний папір, який випущено на базі пула іпотек

pro rata - пропорціональний, пропорціональна

fixed-income security - цінний папір з фіксованим прибутком

Unit 15

stock market    фондовий ринок

intermediation    посередницька діяльність

expansion    розширення

to draw up    складати

equity     звичайна акція

quotation    котировка

to list     вносити до курсового бюлетеню

preferred stocks    привілейовані акції

listing     допуск цінного паперу у офіційній торгівлі  на фондовій біржі

share index    фондовий індекс

indication    показник

dealer     дилер, біржовий торговець

cross-border trading   міжнародна торгівля

over-the counter market   позабіржовий ринок

1. Read sentences only with new lexis and translate them.

  1.  Stock Markets are the means through which securities are bought and sold.
  2.  The appearance of formal stock markets and professional intermediation resulted from the supply of, demand for and turnover in transferable securities.
  3.  The largest, most active and best organized markets were established in Western Europe and the United States.
  4.  Members of stock exchanges drew up rules to protect their own interests and to facilitate the business to be done by creating an orderly and regulated marketplace.
  5.  Investors were interested in a far wider range of securities than those issued by local enterprises.
  6.  Cross-border trading of international equities expanded.
  7.  Potential investors, insurance companies, pension funds, governments and corporate enterprises see securities as a cheap and convenient means of finance.
  8.  Investors need complete and reliable information about stocks and markets.

2. Put the missing letters.

St..ck m..rket, int..rm..d….tion, dr..w up, c..s-b..rder trade, eq..ty, d..l..r, q..tation, sh..re ind..x.

Read the text.

FINANCIAL MARKETS. THE STOCK MARKET

STOCKS AND MARKETS

Stock Markets are the means through which securities are bought and sold. The origin of stock markets goes back to medieval Italy.1 During the 17th and 18th centuries Amsterdam was the principal centre for securities trading in the world. The appearance of formal stock markets and professional intermediation resulted from the supply of, demand for and turnover in transferable securities. The 19th century saw a great expansion in issues of transferable securities2.

The popularity of transferable instruments as a means of finance continued to grow and at the beginning of the 20th century there was an increasing demand for the facilities provided by stock exchanges, with both new ones appearing around the world and old ones becoming larger, more organized and increasingly sophisticated.

The largest, most active and best organized markets were established in Western Europe and the United States. Despite their common European origins there was no single model which every country copied.

Members of stock exchanges drew up rules to protect their own interests and to facilitate the business to be done by creating an orderly and regulated marketplace.

Investors were interested in a far wider range of securities 3 than those issued by local enterprises. Increasingly, these local exchanges were integrated into national markets.

The rapid development of communications allowed stock exchanges to attract orders more easily from all over the country and later the barriers that had preserved the independence and isolation of national exchanges were progressively removed, leading to the creation of a world market for securities.

The 1980s saw the growing internationalization of the world securities markets, forcing stock exchanges to compete with each other. Cross-border trading of international equities expanded.

Although many securities were of interest to only a small and localized group, others came to attract investors throughout the world. Increasingly, arbitrage between different stock exchanges ensured that the same security commanded the same price4 on whatever market it was traded. London, Paris, New York became dominant stock exchanges.

Stock exchanges emerged as central elements in the financial systems of all advanced countries.

Potential investors, insurance companies, pension funds, governments and corporate enterprises see securities as a cheap and convenient means of finance.

An investor who purchases new securities is participating in a primary financial market. An investor who resells existing securities is participating in a secondary financial market.

There are two basic types of stock markets – (1) organized exchanges, like the New York Stock Exchange (NYSE) or the London Stock Exchange (LSE), and (2) the less formal over-the-counter markets.

The organized security exchanges are tangible physical entities, which have specifically designated members5 and elected governing bodies – boards of governors.

In contrast to the organized security exchanges, the over-the-counter market is an intangible organization. It is a network of security dealers who buy and sell securities from each other, either for their own account or for their retail clients. The over-the-counter market is normally conducted by telephone and computer reporting of price quotations between brokerage firms that «make a market»; that is, agree to buy and sell a particular security. Securities that are not listed on exchanges are traded «over-the-counter». In general these include stocks, preferred stocks, corporate bonds, and other securities.

Investors need complete and reliable information about stocks and markets. In addition to the listings, the financial pages of newspapers in all countries contain price quotations and share indexes which give a broad indication of how the stock market, or a segment of the stock market, performed during a particular day.

Words you need:

The origin of stock markets goes back to medieval Italy1 – зародження фондового ринку відноситься до епохи середньовічної Італії.

The 19th century saw a great expansion in issues of transferable securities2 – у 19 сторіччі спостерігалося різке збільшення випуску цінних паперів.

were interested in a far wider range of securities 3 – проявляли зацікавленість до значно більшого числа цінних паперів.

same security commanded the same price4 – одні і тіж цінні папери мали однакову ціну.

The organized security exchanges are tangible physical entities, which have specifically designated members5 – організовані фондові біржі є реально існуючими економічними суб’єктами, які мають конкретних членів.

Exercises

1. Answer these questions:

  1.  What is the Stock Market? What contributed to the emergence and growth of stock exchanges?
  2.  Where were the best organized stock markets established?
  3.  What general trend in the stock market development has been observed over the years of its   existence?
  4.  What stock exchanges have become most dominant? What part do they play in the financial systems of advanced countries?
  5.  What are the basic types of stock markets? How are they conducted?

2. Find in the text English equivalents for the following Ukrainian phrases:

Цінні папери продаються та покупаються; головний центр торгівлі цінними паперами; фондовий ринок  з’явився  у результаті; засіб фінансування; не існувало єдиної моделі; складати правила для захисту чиїх-то інтересів; полегшити ведення бізнесу; упорядкований ринок, який регулюється;  цінні папери, які випущені місцевими підприємствами; місцеві біржі були об’єднані у міжнаціональні фондові ринки; торгівля корпоративними цінними паперами розширилася; позабіржовий ринок; покупати та продавати цінні папери за свій рахунок; позабіржовий ринок проводить операції по телефону та за допомогою комп’ютерів;  цінні папери, які незареєстровані на біржі.

3. Think of word combination with:

Market, stock, share, securities, debt, placement, trading.

4. Match the verbs from (a) with nouns from (b) below:

a) To expand

To develop

To resell

To remove

To issue

To list

To possess

To meet

To submit

b)Barriers

Securities

Stocks

Trading

Shares

Infrastructure

Standards

Capital

Documents

5. Name the adjectives formed from the following verbs and nouns:

To differ, advantage, to clean, to free, to market, to add, to depress,  to rely, to close, diversity, alternative, to direct, to vary, to lower, to warn, majority, practice, finance, to accept, origin, principle.

6. Name the verbs having the same root with the following nouns.

Innovation – to innovate

Manufacture, operation, consumer, report, difference, competition, market, development, fall, seller, force, comparison, emergence, conduct.

7. Make up sentences putting the words in the correct order.

  1.  Stock, are, Market, means, the, which, through, are, securities, bought, sold, and.
  2.  Cross-border, of, equities, trading, international, expanded.
  3.  Stock, exchanges, as, elements, emerged, central, the, in, system, financial, all, of, countries, advanced.
  4.  An, investor, purchases, who, securities, new, participating, is, a, in, primary, market, financial.  
  5.  There, two, are, types, of, basic, markets, stock.
  6.  Investors, complete, need, information, reliable, and, stocks, about, and, markets.

8. Complete the sentences with the following words: stock exchange, over-the-country market,”over-the-counter”, securities market, equities, preferred stocks.

  1.  …are the ordinary shares of a company traded in stock markets.
  2.  …is a market where securities are bought and sold under fixed rules, but at prices controlled by supply and demand.
  3.  Securities that are not listed on exchanges are traded … .
  4.  ..is a market in unlisted securities; stock market where shares in newer and smaller companies are traded through a computer network.
  5.  … is a market which enable businesses and individuals to buy and sell securities such as stocks and bonds.
  6.  ..are the stocks that give owners preference in the payment of dividends.

9. Write down the Ukrainian equivalents:

Stock market, stock exchange, equities, share, dealer, advanced countries, network, governing body, allow, retail client, conduct, preferred stocks, in contrast to, isolation, lead, force, facilities, expansion.

10.  Find in the text sentences expressing such ideas.

  1.  The supply, demand and turnover in transferable securities led to the creating of stock markets.
  2.  At the beginning of the 20th century the stock exchanges became larger, more organized and increasingly sophisticated.
  3.  Members of stock exchanges drew up rules to protect their own interests.
  4.  We can say that 1980s were the years of growing internationalization of the world securities markets.
  5.  Securities acknowledged as the cheap and convenient means of finance.
  6.  There are two types of investors.
  7.  There are two basic types of stock markets.
  8.  There is a difference between organized exchanges and over-the-counter markets.
  9.  Investors can get information with the help of computers and newspapers.

11. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  Stock exchange is an organization whose members can buy and sell securities to the public.
  2.  Preferred stocks are the ordinary shares of a company traded in stock markets.
  3.  Equities are the stocks that give owners preference in the payment of dividends.
  4.  Over-the-country market is a market in unlisted securities.
  5.  The organized security exchanges are tangible physical entities.
  6.  The over-the-counter market is an intangible organization.
  7.  An investor who purchases new securities is participating in a secondary financial market.
  8.  An investor who resells existing securities is participating in a primary financial market.
  9.  Stock Markets are the means through which securities are bought and sold.
  10.  At the beginning of the 20th century there was an increasing demand for the facilities provided by stock exchanges.

12. Find and read sentences explaining the title of the text.

13. Divide the text into logical group and give them titles.

14. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

15. Read the text and be ready to explain how to invest money in right place.

CHOOSING THE RIGHT INVESTMENT

Broadly speaking, investing means committing capital with the expectation of making a profit. The first step in an investment program is for the investor to analyze his or her specific situation. The analysis will contain specifics in terms of income desired, cash requirements, level of risk, and so forth. Investment objectives change over the course of a person's life. A second step is to select general investment options that best fit the specific needs of the investor. For example, investors should decide how much, if any, of their assets should be committed to real estate, bonds, or stocks. The third step is to select specific investments within the general areas. For example, should the investor choose the common or preferred stock of Procter & Gamble? Would the investor's objectives be best served by a corporate-issued or government-issued bond? Generally, there are five criteria to use when selecting an investment option:

  1.  Investment risk - the chance that an investment and all its accumulated yields will be worth less at some future time than when the investment is made.
  2.  Yield - the increase in the value of an investment over time, usually a year.
  3.  Duration - the length of time assets are committed.
  4.  Liquidity - how quickly one can get back invested funds when desired.
  5.  Tax consequences - how the investment will affect the investor's tax situation.

15. Name the number of the sentences where we have to use Russian words «по-видимому»  and «оказалось».

  1.  Dividends and interest on capital are not likely to be paid in the years  when the company has not received profit.
  2.  Since the Stock Exchange is a relatively free market, share prices are sure to fluctuate as market conditions change.
  3.  Where labour is expensive, firms are likely to substitute a lot of capital for labour.
  4.  The Stock Exchange operates mainly through stockbrokers who handle transactions for their clients.
  5.  The more goods are swapped for other goods without being recorded, the less accurate statistic information turns out to be.
  6.  The government policy proved to have resulted in a rapidly growing unemployment rate.
  7.  The bank unable to meet its liability in due time cannot expect to stay in business.
  8.  The clearing system proved to have become a convenient and economical means of settling debts between banks.
  9.  Their current account happened to have been opened by the same bank as ours.

16. Prepare a short talk using the Russian words «по-видимому» and  «оказалось» on the following:

  1.  What a type of market is the stock exchange?
  2.  What services does the stock exchange render to the investors?
  3.  Is the stock exchange is a highly organized market? Why?
  4.  Do the dealings on the stock exchange affect the prosperity of a working man?
  5.  Is the stock market important to industry and the government?

Unit 16

capital expenditure    вкладення капіталу

physical productive assets    матеріальні, виробничі фонди

real investment     інвестиції у реальний капітал

tangible assets     матеріальні активи

to embrace     охвачувати

capital gains     приріст капіталу

joint venture     сумісне виробництво

diffusion     розповсюдження

sharing      участь у

quantitative security valuation   кількісна оцінка інвестиційних активів

dividend discount models    моделі дисконтування фінансових потоків

foreign direct investment    прямі іноземні інвестиції

1. Read sentences only with new lexis and translate them.

  1.  Real investments generally involve some kind of tangible asset.
  2.  Investment is closely associated with other aspects of economic order.
  3.  As a financial term investment embraces purchases of stock exchange securities or deposits of money in banks, building societies.
  4.  There are two main channels for international investment.
  5.  In financial circles, individuals or households that own securities are known as individual investors.
  6.  The process of supplying capital to a foreign institution, through a loan or purchase of stock, without sharing in the institutions management is foreign indirect investment.
  7.  FDI speeds the international diffusion of new technologies and other efficiency enhancing intangible assets, such as organizational skills.
  8.  Institutional investors have contributed to development of new types of investment management techniques.

2. Put the missing letters.

d.. v.. dend disc..nt m..dels, d..ffus..on, jo..nt vent..re, sh..ring, embr..ce, re..l inv..stm..nt, t..ng..ble ass..ts, capital g..ns, qu..ntit..tive sec..rity  val..at..n.

Read the text.

INVESTMENTS

In economic science, investment is capital expenditure on physical productive assets, e.g. machinery, factory buildings, roads, bridges, houses, and stocks.

Real investments generally involve some kind of tangible asset.

As a financial term investment embraces purchases of stock exchange securities or deposits of money in banks, building societies, or other financial institutions, with a view to income and, in appropriate cases, capital gains.

Users of capital, from governments to every kind of industrial or commercial joint-stock company, all depend for the supply of their financial resources on those who are willing to invest their funds, on investors.

Investment is closely associated with other aspects of economic order such as the role of financial centres, labour migration, and the regime of international trade prevailing at the time.

Technological advances, the removal of exchange controls1 and financial deregulation2 have all contributed to the expansion of international capital flows3. As a result foreign investment has become a fundamental feature of international economic development.

There are two main channels for international investment: foreign direct investment-(FDI) and foreign indirect investment, or portfolio investment4.

Foreign direct investment (FDI) occurs when citizens of one nation (the "home" nation) acquire managerial control5 of economic activities in some other nation (the "host" nation). Setting up a foreign operation6 through a joint venture, establishment of a foreign branch7 or the purchase or formation of a foreign subsidiary are examples of foreign direct investment.

Firms controlling activities in several nations have become known as "multinational enterprises" (MNSs), "transnational corporations" (TNCs) and, more recently, "global corporations". The reasons why effects of FDI are generally assessed as positive can be summarized as follows: first, FDI speeds the international diffusion of new technologies and other efficiency enhancing intangible assets, such as organizational skills. Then, FDI in many national markets will stimulate competition among firms.

The process of supplying capital to a foreign institution, through a loan or purchase of stock, without sharing in the institutions management is foreign indirect investment.

In financial circles, individuals or households that own securities are known as individual investors8. Along with them, there are institutional investors9.

Institutional investors are a group of investors who have funds to invest as a consequence of the conduct of their business. The group includes insurance companies, banks, investment trusts, financial and industrial companies.

The past 30 years have witnessed a concentration of financial power in the hands of institutional investors. In 1990 they controlled over $6 trillion in assets, the majority invested in common stock and corporate and government bonds.

An investor, when confronted with a list of investment possibilities, will want to assess the risks and general advantages and disadvantages connected with putting his or her money into this or that security. To receive higher return, investors must be prepared to accept a higher level of risk. Trying to limit or minimize the risk investors construct and diversify portfolios and spread their foreign investments among a number of different countries.

Institutional investors have contributed to development of new types of investment management10 techniques, sophisticated portfolio monitoring, have pioneered the application of quantitative security valuation techniques, such as dividend discount models.

In spite of the existing obstacles11, recent years have seen a growing interest of foreign investors in the Ukrainian market.

Words you need:

exchange controls1    валютний контроль

financial deregulation2   скорочення об'єму втручання держави у фінансову сферу

international capital flows3  пересування іноземного капіталу

portfolio investment4   портфельні інвестиції  

managerial control5   адміністративний контроль

operation6     організація: одиниця, яка хазяйнує       

foreign branch7    закордонне відділення

individual investors8   приватний інвестор

institutional investors9   інституціональний інвестор

investment management10   керування портфелем цінних паперів 

obstacles11    перешкода

Exercises

1. Answer the questions.

  1.  What is investment?
  2.  Define the difference between real investment and financial investment.
  3.  In what ways can financial resources be raised?
  4.  Why does FDI take place?
  5.  What institutions handle investment in stocks and shares?
  6.  What role do institutional investors play?
  7.  How do investors make their choice of investment possibilities?

2. Find in the text English equivalents for the following Ukrainian phrases:

Інвестиції є вкладенням капіталу; реальні інвестиції зв’язані з матеріальними активами; фінансові інвестиції зв’язані з придбанням цінних паперів; депонування коштів у банках; користувачі; міграція робочої сили; режим міжнародної торгівлі, який існує на даний момент; досягнення у сфері технології; відміна валютних обмежень; скорочення об’єму втручання держави у фінансову сферу; розширення міжнародних фінансових потоків; головна риса міжнародного економічного розвитку; прямі іноземні інвестиції; портфельні інвестиції; придбати управлінський контроль; організація спільних підприємств; закордонне відділення фірми; організація закордонного філіалу фірми; багатонаціональна компанія; прискорювати розповсюдження нових технологій; організаційні навички; приймати участь в керуванні; приватні та інституційні інвестори; засоби керування портфелем цінних паперів.  

3. Think of the verbs that are commonly used with:

Portfolio, intermediary, risk, loans, purchase, contributions, funds, money.

4. Think of words combinations with these nouns:

Investor, investment, accounts, securities, yield.

5. Make your own sentences with any five word combinations from 3. and 4.

6. Match the verbs from (a) with nouns from (b) below:

a) To make

To invest in

To remove

To expand

To minimize

To assess

To stimulate

To share in

To receive

To apply

b) exchange control

management

investments

securities

capital flows

risks

competition

return

techniques

situation

7. Say how the following nouns are formed.

Calculation, specification, preparation, decision, equipment, investment, finance, support, returns, test, accounting.

8. Make sentences with the word to invest, its derivatives and word combinations:

To invest – investor – investment

  •  To invest collectively
  •  To invest money at interest
  •  Investment fund
  •  To make an investment
  •  Capital investment
  •  Financial investment
  •  Investment activity
  •  Real investment
  •  International investment
  •  Foreign direct investment
  •  Institutional investors
  •  individual investors
  •  investment management

9. Make up sentences putting the words in the correct order.

  1.  Investment, expenditure, is, capital, productive, on, assets, physical.
    1.  Real, asset, kind, of, tangible, investments, involve, some.
    2.  There, two, are, channels, main, for, investment, international.
    3.  Individuals, or, individual, households, own, investors, known, are, securities, that, as.
    4.  Institutional, that, its, investor, own, invests, assets, an, organization, is.
    5.  Investor, is, that, invests, a, person, money, to, make, profit, a, an, organization, or, in order.

10. Complete the sentences with the following words: investment, real investment, foreign direct investment, foreign indirect investment, individual investors, institutional investors.

  1.  ………are a group of investors who have funds to invest as a consequence of the conduct of their business.
  2.  ………is capital expenditure on physical productive assets.
  3.  Individuals or households that own securities are known as …..  .
  4.  ………occurs when citizens of one nation (the "home" nation) acquire managerial control of economic activities in some other nation (the "host" nation).
  5.  The process of supplying capital to a foreign institution, through a loan or purchase of stock, without sharing in the institutions management…..  .
  6.  ………involve some kind of tangible asset.

11. Write down the Ukrainian equivalents:

Direct investment, financial investment, foreign investment, government investment, intangible investment, long – term investment, portfolio investment, private investment, to allocate investment, to carry out investment.

12. Find and read sentences explaining the title of the text.

13. Find in the text sentences expressing such ideas.

  1.  Investment is the act of investing in a company or business in order to obtain income or profit.
  2.  Users of capital depend on the investors.
  3.  The expansion of international capital flows depends on the technological advances, the removal of exchange controls and financial deregulation.
  4.  Foreign direct investment means that businessman in his country acquire managerial control of economic activities of businessman in another country.
  5.  "Multinational enterprises" (MNSs), "transnational corporations" (TNCs) and, more recently, "global corporations" have become known as firms controlling activities in several nations.
  6.  FDI in many national markets will stimulate competition among firms.
  7.  The process of supplying capital to a foreign institution, through a loan or purchase of stock, without sharing in the institutions management is foreign indirect investment.
  8.  There is a difference between foreign direct investment and foreign indirect investment.
  9.  There is a difference between foreign direct investment and portfolio investment.
  10.  Individual investors and institutional investors are two different groups of investors.
  11.  The receiving of high profit deals with a high risk.
  12.  There is a possibility to minimize the level of risk.

14. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  In economic science, foreign direct investment-(FDI) and portfolio investment are the same things.
  2.  The process of supplying capital to a foreign institution, through a loan or purchase of stock, without sharing in the institutions management is foreign direct investment.
  3.  Foreign indirect investment occurs when citizens of one nation (the "home" nation) acquire managerial control5 of economic activities in some other nation (the "host" nation).
  4.  Individual investors are a group of investors who have funds to invest as a consequence of the conduct of their business.
  5.  Institutional investors were the first who use the application of the quantitative security valuation techniques.
  6.  Investment is capital expenditure on physical productive assets, e.g. machinery, factory    buildings, roads, bridges, houses, and stocks.
  7.  Constructing and diversifying portfolios and spreading the foreign investments among a number of different countries help investors to minimize the level of risk.

15. Find the definitions to the next terms: investment, investor, institutional investor, foreign branch, deregulate, intangible assets, investment company, managerial, multinational/transnational company.

  1.  …..is a large company with business operations in many countries.
  2.  …..is a limited company that uses its capital to buy securities as investments.
  3.  …..is a person or an organization that invests money in order to make a profit.
  4.  ….means connected with the job of being a manager.
  5.  ….means to remove or reduce the number of government controls over a particular business activity.
  6.  ….are assets owned by a person or company that do not have a physical substance.
  7.  ….is a foreign office that is a part of a larger organization with a main office in a different location.
  8.  ….is capital expenditure on physical productive assets.
  9.  Individuals or households that own securities are known as … .

16. Divide the text into logical group and give them titles.

Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

Grammar Exercises

Investment Companies

1.

  1.  Read the text
  2.  Supply the articles where necessary.
  3.  Write down 3-5 questions about the text.
  4.  Say what advantages individuals have when they invest in investment companies.

Investment companies are ... type of financial intermediary. They obtain money from investors and use it to purchase financial assets such as stocks and bonds. In return, the investors receive certain rights regarding ... financial assets that the investment company has bought and any earnings that it may generate. In …simplest and most common situation, the investment company has only one type of investor - stockholders.

For an individual there are two advantages of investing in such… companies instead of investing directly in the financial asset that these  companies own. Specifically, the advantages arise from (1) economies of scale and (2) professional management. In describing these benefits, let's consider ... individual with moderate financial resources who wishes to invest in ... stock market.

In terms of economies of scale, the individual could buy stocks in odd lots and thus have ... diversified portfolio. However, the brokerage commissions on odd lot transactions are relatively high. Alternatively, the individual could purchase round lots, but would only be able to afford ... few different securities. Unfortunately, the individual would then be giving up ... benefits of owning a well-diversified portfolio. In order to receive the benefits of both diversification and substantially reduced brokerage commission, the individual could invest in the shares of... investment company. This is because economies of scale make it possible for an investment company to provide ... diversification at ... lower cost per dollar of investment than would be incurred by a small individual investor.

In terms of professional management, the individual investing directly in the stock market would have to go through all... details of investing, including making all buying and selling decisions as well as keeping records of all transactions for tax purposes. In doing so, the individual would have to be continually on the lookout for mispriced securities in ... attempt to find undervalued ones for purchase, while selling any that were found to be overvalued. Simultaneously, the individual would have to keep track of ... overall risk level of the portfolio that did not deviate from some desired level. However, by purchasing stock of an investment company, the individual can turn over all of these details to ... professional money manager.

Investment companies have ... problems but potential advantages to be gained from ... investing in an investment company still outweigh any disadvantages, particularly for smaller investors.

Words you may need:

generate v (зд.)   получати

economies of scale економія, яка зумовлена ростом масштабу виробництва

odd lot    неповний лот

round lot   повний лот

incur v    приймати на себе витрати, терпіти збитки

to keep records   реєструвати

to be on the lookout бути насторожі  

mispriced securities цінні папери за ціною, яка завищена або занижена

to keep track (of) відслідковувати  

deviate v   відхилятися

money manager   менеджер, який займається купівлею та продажем цінних паперів

Unit 17

foreign exchange market   валютний ринок

legal tender    законний платіжний засіб

monies     грошові суми

rate of exchange    курс обміну

unit of currency    грошова одиниця

currency mix    структура грошової маси

spot market    ринок готівки

forward market    форвардний ринок

futures market    ф’ючерський ринок

currency options market   ринок валютних опціонів1   

bid – ask spread    різниця між цінами продавця та  покупця

currency arbitrage   валютний арбітраж

clearing     порівняння деталей фінансової угоди  перед розрахунком

Option (опціон1) право вибору; право купівлі та продажу цінних паперів за обумовлену ціну в обумовлений термін

1. Read sentences only with new lexis and translate them.

  1.  The rate exchange is the value of one unit of the foreign currency expressed in the other currency concerned.
  2.  The Market performs two major functions.
  3.  Somewhat more than half of all transactions are spot deals.
  4.  The cost of transacting in the wholesale market is reflected in the bid-ask (or bid-offer) spread.
  5.  The exchange market is global in character.
  6.  The operation is called currency arbitrage.
  7.  Trading in the Market occurs 24 hours a day in various centers around the world.
  8.  Currencies can be bought or sold in the Foreign Exchange Market.

2. Put the missing letters.

cl..ring, sp..t m..rket, c..rrency arb..tr..ge, futu…s m..rket, l..g..l t..nd..r, m..n..s, r,,te of exc….nge, f..ward ma…k..t, c…r….ncy m..x.

3. Work in pairs. One student has to name all the words sh/he memorised from the word list another student has to translate them.

Read the text.

FOREIGN EXCHANGE MARKET. GLOBAL FINANCIAL MARKETS

TRADING IN THE FOREIGN EXCHANGE MARKET

Any one country's currency is a legal tender only within its national boundaries. To trade beyond these boundaries involves  exchange of monies. Exchange of currencies is possible if national
currencies are interchangeable. The terms on which one currency will exchange against another are referred to as rate of exchange. The rate exchange is the value of one unit of the foreign currency expressed in the other currency concerned.

Currencies can be bought or sold in the Foreign Exchange Market. The Foreign Exchange Market is the oldest financial market in existence. It is also the largest international financial market in the world.

The Market performs two major functions: it facilitates the foreign exchange needs of exporters and importers, and it enables individuals, corporations and governments to obtain a desired currency mix of their portfolios.

Trading in the Market occurs 24 hours a day in various centers around the world. Deals are concluded bilaterally over telecommunications networks by different counterparties, some of whom serve as market makers or dealers.

 The exchange market is global in character, it does not have one centralized location; trading is heavily concentrated in a handful of centers: London, New York, Tokyo, etc. The great majority of foreign exchange trading takes place in the interbank market1 between traders or market makers who represent large commercial banks or other financial   institutions.  

Foreign   exchange   departments   of   large commercial banks are linked across the world through a sophisticated network of communication systems. The market consists of three major sectors: the spot market, the forward and futures markets and the currency options market.

Somewhat more than half of all transactions are spot deals. In other words, they are transactions which call for2 the delivery of the two currencies exchanged within two business days. The remainder3 of the deals can be classified as outright4 forwards, swaps5, futures and options.

Such transactions are performed by customers who do not know when they will need foreign currency to overcome the growing exposure to currency risks in the conditions of foreign exchange rate volatility6.

The cost of transacting in the wholesale market is reflected in the bid-ask (or bid-offer) spread. Prices in the market depend on the volume of transactions, exchange rate volatility, the availability of relevant information and the strength of competition in the Market.

As prices are different in different markets, professional dealers take advantage of it buying, say, US dollars for Yen in Singapore and selling them in London for sterling and then back into Yen in New York - all for a profit. The operation is called currency arbitrage.

The delivery of the individual currencies involved in a foreign exchange transaction typically takes place through the payment systems of the two countries whose currencies are traded.

The reliance on the domestic currency payment system of individual countries for the clearing and settlement of foreign exchange transactions means that the stability and integrity of the global foreign exchange market depends on both the soundness of the individual counterparties and the robustness7 of national payment systems.

Words:

the interbank market1  міжбанківський ринок

call for2    вимагати, передбачати

remainder3   частина, яка залишилася

outright4    звичайний

swap5    своп (обмін одних цінних паперів на інші)

volatility6   мінливість

the robustness7   міцність

Exercises

1. Answer these questions:

1. Why is exchange of currencies necessary?

  1.  What makes exchange of currencies possible?
  2.  What is Rate of Exchange?
  3.  Where are currencies traded?

What major functions does the Foreign Exchange Market рerform?

  1.  How does the Foreign Exchange Market operate? ( Forex)
  2.  What are the major sectors of the Forex?
  3.  What deals are transacted in the market?
  4.  Why does the market depend on payment systems of individual countries?

2. Find in the text English equivalents for the following Ukrainian phrases:

Валютний ринок; бути законним платіжним засобом; у рамках національних кордонів; обмін валюти; валюти, які можна  обміняти (одна на другу); виконувати функції; сприяти задоволенню потреб в іноземній валюті; домогтися структури грошової маси свого інвестиційного портфелю, угоди заключають з використанням телекомунікаціонних систем; торгівля, яка зосереджувана в …; які представляють великі комерційні банки; ринок готівки; форвардний ринок; ф’ючерський ринок; більшість угод є угодами «спот»; угода передбачає постачання валюти протягом двох робочих днів; відражати різницю між ціною продавця та ціною покупця; валюти, які приймають участь у валютній угоді; розрахунок по фінансовій угоді.

3. Think of the verbs that are commonly used with:

Currency, deals, trading, price, trading activities, restrictions, operations, quotations, financial flows.

4. Think of the nouns that are most often used with:

To exchange, to sell, to buy, to express, to obtain, to deliver, to trade, to clear, to settle, to set, to convert, to determine, to express. 

5. Make your own sentences with any five word combinations from 3. and 4.

6. Match the verbs from (a) with nouns from (b) below:

a)To facilitate

To perform

To fix

To enhance

To identify

To seek

To join

To liberalize

To hold

b)needs

trade

legislation

functions

opportunities

negotiations

profits

financial community

exchange rate

7. Write down nouns from the following verbs and translate them.

To depend, to insure, to expand, to credit, to tend, to construct, to exchange, to measure, to decide, to cost, to value, to prepare, to increase.

8. Make up sentences putting the words in the correct order.

  1.  Currency, tender. legal, is, a, its, boundaries, only, national, within.
  2.  Interchangeable, are, currency, exchange, is, of, possible, if, currencies, national.
  3.  Currencies, be, bought, can, or, sold, the, in, Market, Exchange, Foreign.
  4.  Functions, performs, two, market, major, functions, the.
  5.  Spot, deals, market, in, actuals ( фізичні товари), the actual, product, physical, delivery, for, immediate.
  6.  Futures, the, market, commodity, be, can, bought, or, for, sold, delivery, at, time, some, the, in, future.
  7.  In, market, futures, traders, option, an, take, to, to, buy, sell, the, in, future, product, or.
  8.  The, cost, transaction, of, reflected, is,  in, wholesale, the, market, the, in, bid-ask, spread.
  9.  The, remainder, deals, of, the, be, can, classified, outright, as, forwards, swap, futures, options, and.

9. Complete the sentences with the following words: currency, monies, rate of exchange (2), interbank market, the spot market (2), the forward or future markets, options, swap.

  1.  …..is an exchange of one investment for another.
  2.  …. is a legal tender only within its national boundaries.
  3.  …. is the terms on which one currency will exchange against another.
  4.  …. is the amount of currency that can be bought with another.
  5.  …. is the right to buy or to sell securities at an agreed price on a future date.
  6.    is the purchase and sale of commodity for immediate delivery.
  7.  …. deals in actuals, with the actual physical product, for immediate delivery.
  8.  …  is the purchase and sale of commodity for delivery sometime in the future.
  9.  To trade beyond these boundaries involves exchange of….
  10.  The great majority of foreign exchange trading takes place in the …

10. Write down the Ukrainian equivalents:

currency, monies, rate of exchange, interbank market, the spot market, the forward or future markets, options, swap, Foreign Exchange Market.

11. Find and read sentences explaining the title of the text.

12. Find in the text sentences expressing such ideas.

  1.  Market dealing is conducted entirely through telephone and different systems of communications. It does not have one centralized location.
  2.  Bid-ask is an offer to buy something at a stated price.
  3.  Market depends on payment system of individual countries.
  4.  Currency is the main unit of currency in trade between countries.
  5.  Foreign Exchange Market performs a number of functions.
  6.  The interbank market plays an important role in the exchange market.
  7.  The market is divided in three major sectors.
  8.  Spot market means immediate delivery.
  9.  Swaps, futures and options are for customers who do not know when they will need foreign currency.
  10.  Currency arbitrage is a transacting with the aim of receiving profit.
  11.  The stability and integrity of the global foreign exchange market depends on both the soundness of the individual counterparties and the robustness of national payment systems.

13. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  Exchange of currencies is possible in any way.
  2.  Swap is the amount of currency that can be bought with another.
  3.  The spot market  deals in actuals, with the actual physical product, for immediate delivery.
  4.  Option is the right to buy or to sell securities at an agreed price on a future date.
  5.  Swap is an exchange of one investment for another.
  6.  The Market performs two major functions: it facilitates the foreign exchange needs of exporters and importers, and it enables individuals, corporations and governments to obtain a desired currency mix of their portfolios.
  7.  The basic idea of foreign exchange dealing is making profit on selling and buying currencies.
  8.  FOREX is really an integral, fundamental sector of the global financial market.
  9.  FOREX reflects economic relations between parties to currency deals.
  10.  The market is global in character. It is rather a network of dealing rooms connected by sophisticated communications systems, like telephones, telex machines, and electronic dealing systems.

14. Find the definitions to the next terms: currency, spot market, foreign exchange rate, future or forward market, swap, option.

  1.  It is a market where commodities have to be delivered immediately.
  2.  It is a market where commodities have to be delivered on a specified future date, at a price agreed in the present.
  3.  It is a contract giving the right to buy and sell securities at an agreed price within a particular period of time.
  4.  It is the possibility of exchange one investment for another.
  5.  It is the money of a particular country.
  6.  It is a price at which one currency exchange for another.

15. Divide the text into logical group and give them titles.

16. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

17. Prepare a short talk on the following:

  1.  Instruments and transactions made in the currency markets (spot trading, futures and forward contracts, swaps, options).
  2.  Explain the global character of the exchange market.
  3.  What is the rate of exchange determined by?

Grammar Exercises

1.

  1.  Supply the prepositions where necessary with, of, by, to, in, over, for .
  2.  Write down 3-5 questions about the text.
  3.  Describe the components of Eurocurrency market.

THE EUROCURRENCY MARKET

This market began …Eurodollars — US dollars lent outside the United States — and has developed into a powerful market in currencies lent outside their domestic marketplace. There are, for example, Euromarks and Euroyen in London, Eurosterling etc in Bonn, Tokyo and New York. London and Tokyo are the main world capitals for eurocurrency dealings. Dealing centres around Euroloans, involving commercial banks, and Eurobonds which involve investing institutions and banks.

Eumhans consist …large tranches of short-term money (usually repayable in three to six months) lent… syndicates of banks and linked … the LIBORrate.

Eurobonds are bearer bonds, requiring no register of holders, issued … currencies other than that of the issuing country and operating over a longer period, usually between 5 and 20 years. Their issue is managed by a bank with the aid of underwriters and is placed … investors. Market participants include multinational corporations, non-bank financial institutions, governments and the international banking community.

The Euromarket, as it has become known, has a single SRO ( Self-regulating organizations) the International Securities Market Association (ISMA). During 1993, some $23,167 trillion was traded …the eurobond market, an increase of almost 60 per cent … the 1992 total, which was itself a record year. UK members of ISMA accounted .. a considerable amount …this total. This huge increase … turnover was marked .. continued growth in cross-border trading in domestic instruments. As a global market emerges institutional funds will switch relatively smoothly from «domestic» to «international» and vice versa. This trend can be expected to continue.

Unit 18

(Part I)

finance function     організація фінансової діяльності

management of fixed assets   керування основними засобами

working capital management   керування поточними активами

management of current assets   керування оборотними засобами

management of current liabilities   керування короткостроковими зобов’язаннями

cash management    керування грошовими операціями

receivables management    керування дебіторською заборгованістю

inventory management    керування матеріально-технічним постачанням  

financial statements    фінансова звітність

balance sheet     балансовий звіт

accounts payable     кредиторська заборгованість

paid-up capital     частина акціонерного капіталу, яка оплачена

retained earnings     прибуток, який нерозподілений

1. Read sentences only with new lexis and translate them.

  1.  Does the firm have adequate cash or access to cash?
  2.  How much inventory should be held?
  3.  Financial managers are primarily concerned with the management of fixed assets, working capital management, including management of current assets and current liabilities, cash management, receivables management and inventory management.
  4.  The standard classification of assets divides them into four parts.
  5.  The financial manager has to take these decisions with reference to the objectives of the firm.
  6.  Current assets are short-term in nature.
  7.  Fixed assets are assets purchased for use in the business on a permanent basis.
  8.  The chief financial officer distributes the financial management responsibilities between the controller and the treasurer.

2. Put the missing letters.

f..nance f..nct..on, m..n..g..ment of c..rrent a..ets, c..sh m..n..g..m..nt, r,,c,,v,,bles m..n..g..ment, b..l..nce sh..t, m..rt..ge, acc…nt pa..ble,p…d-up cap..tal.

Read the text.                                      FINANCE FUNCTION

Any business - whether large or small, profit-seeking or not-for- profit - has important financial concerns:

How to get the funds needed to run the business on favorable terms and how to make sure that the funds are used effectively?

In this connection modern businesses have financial managers to look after these problems, whose major objective is to maximize the value of the firm for its owners, i.e. to maximize the shareholders' wealth, which is represented by the market price of a firm's common stock1.

Managers daily face questions like the following:

  •  What assets to acquire?
  •  Will a particular investment be profitable?
  •  Where will the funds come from to finance the investment?
  •  How much to maintain as equity capital?
  •  Does the firm have adequate cash or access to cash – through bank borrowing agreements, for example, to meet its daily operating needs?
  •  Which customers should be offered credit and how much should they be offered?
  •  How much inventory should be held?
  •  Is the merger or acquisition advisable?
  •  How should profits be used or distributed? What is the optimal dividend policy?
  •  How should the firm behave in the situation of exchange rate variations and interest rate changes?
  •  How should risk to which the firm is exposed2 and return be balanced?

Financial managers are primarily concerned with the management of fixed assets3, working capital management, including management of current assets and current liabilities, cash management, receivables management and inventory management; they are responsible for designing capital structure, choosing long- and short-term financing techniques. The financial manager has to take these decisions with reference to the objectives of the firm. To have a better understanding of how managers go about all these concerns one should know what resources managers typically have at their disposal. The position of an enterprise, its assets and capital are best illustrated by its financial statements - the balance sheet and the income statement4.

The first major component of the balance sheet of an enterprise is its assets, which are the resources owned by the enterprise. The term “assets” means anything of value that is owned by a company and can be expressed in terms of money. The standard classification of assets divides them into: 1) fixed assets, 2) current assets, 3) investments and 4) other assets.

Fixed assets are assets purchased for use in the business on a permanent basis, e.g. land and buildings, plant and machinery, furniture, motor vehicles, etc.

Current assets are short-term in nature. They are also known as liquid assets5 and include cash, marketable securities, accounts receivable6 (debtors), notes/bills receivable7 and inventory, including finished goods or work in process8.

Investments represent investment of funds in the securities of another company, the purpose of which is either to earn a return or/and to control another company.

The second major component of the balance sheet is liabilities of the enterprise, which represent the amount that the enterprise owes to other enterprises, or the outside sources which the enterprise uses to finance its assets. They are: long-term liabilities (obligations payable after the accounting period) - debentures, bonds, mortgages, secured loans - and current liabilities (obligations usually repayable within the accounting period) - accounts payable, bills/notes payable9, accrued expenses10, deferred income11 and short-term bank credit.

The third major component of a balance sheet is the owners' equity12-part of the resources of a firm which are supplied by its owners - shareholders. The owners' equity may consist of two elements: paid-up capital (the initial amount of funds contributed by the shareholders) and retained earnings (part of the profits of the shareholders which is not paid out to them as dividends but ploughed back13 in the business).

Capital is the store of accumulated wealth contributed to the firm by its proprietors - it is the net worth of the business14 to the owners. Fixed capital15 is capital tied up in fixed assets. Working capital16 is the capital available for working the business. When an enterprise has bought fixed assets it still needs further capital to buy raw materials, etc., or money to pay wages.

The finance function in a firm is usually headed by a chief financial officer (CFO), who reports to the firm's president.

The chief financial officer17 distributes the financial management responsibilities between the controller18 and the treasurer.19

Words you need:

common stock1   звичайні акції

to be exposed to risks2  бути схильним до риску

assets3    активи

income statement4  звіт про прибутки та збитки

liquid assets5   ліквідні засоби

accounts receivable6  рахунки дебіторів

notes/bills receivable7  векселя до отримання

work in process8   виробництво, яке незавершене

notes payable9   векселя до оплати   

accrued expenses10  витрати, які нараховані   

deferred income11  прибутки майбутніх років

equity12    акціонерний капітал

to plough back13   перетворювати в капітал

net worth of the business14 власний капітал фірми

Fixed capital15   основні фонди

Working capital16  оборотний капітал   

The chief financial officer17 віце-президент корпорації по фінансам

controller18 фінансист-контролер, який веде аналіз господарської та фінансово-облікової діяльності

treasurer19   скарбник компанії

Exercises

1. Answer the questions.

  1.  What financial concerns face every enterprise?
  2.  What problems do finance managers face daily?
  3.  What does financial management involve?
  4.  What are financial managers concerned with?
  5.  What are the major components of a balance sheet?
  6.  How the finance function is most commonly organized?

2. Find in the text English equivalents for the following Ukrainian phrases:

Керування фінансовою діяльністю; на вигідних умовах; ефективно використовувати фінансові засоби; здобувати активи; готівка, яка необхідна; злиття та поглинання; дивідендна політика; бути підданим риску; керування загальними засобами; керування поточними активами; керування оборотними засобами; керування короткостроковими зобов’язаннями; керування дебіторською заборгованістю; керування запасами; структура капіталу; фінансова звітність; балансовий звіт; звіт про прибутки та збитки; основні засоби; оборотні засоби; рахунки дебіторів; векселя до отримання; виробництво, яке не завершене; заставна;кредиторська заборгованість; векселя до оплати; витрати, які нараховані; прибутки майбутніх років; частина акціонерного капіталу, яку оплатили; нерозподілені прибутки; власний капітал; основні фонди; оборотний капітал.

3. Think of the verbs that are commonly used with:

Funds, financing, assets, inventory, cash, merger, dividends, liquid assets, business, risk, return.

4. Think of the nouns that are most often used with:

To acquire, to finance, to borrow, to distribute, to hold, to measure, to manage.

5. Think of the word combinations with these words:

Assets, capital, to manage, liabilities, ratio, shares, cost, return, cash, value.

6. Make your own sentences with any five word combinations from 4 and 5.

7. Match the verbs from (a) with nouns from (b) below:

a) to maximize b) services

to perform company

to delegate cash

to acquire outlays

to reduce value

to generate cash flow

to evaluate production facilities

to expand calculation

to calculate authority

to adjust shareholder wealth

to manage inventories

8. Form adjectives and nouns from these verbs:

To change, to manage, to value, to market, to rely, to depend, to improve, to import, to export, to perform, to delegate, to reduce, to evaluate, to expand.

9. Make up sentences putting the words in the correct order.

  1.  The, aim, the, managers, financial, of, is, maximize, to, of, the, firm, value, its, owners, for, the.
  2.  The, first, of, the, balance, component, sheet, an, of, enterprise, assets, is, its.
  3.  Assets, the, are, resources, by, the, enterprise, owned.
  4.  Fixed, are, purchased, assets, for, use, assets, the, in, business, a, on, basis, permanent.
  5.  Current, are, assets, in, short-term, nature.
  6.  The, major, second, of, the, component, sheet, is, balance, liabilities, the, of, enterprise.
  7.  The, major, third, of, the, component, sheet, is, balance, the, equity, owners`.
  8.  Fixed, is, capital, tied, in, up, capital, assets, capital, fixed.

10. Complete the sentences with the following words: assets, fixed assets, current assets, liabilities of the enterprise, the owners` equity, paid-up capital, retained earnings, capital, fixed capital, working capital.

  1.  The owners' equity may consist of two elements:….
  2.  The second major component of the balance sheet is…
  3.  The first major component of the balance sheet of an enterprise is its…
  4.  The third major component of a balance sheet is …
  5.  ….is capital tied up in fixed assets.
  6.  …is the store of accumulated wealth contributed to the firm by its proprietors.
  7.  ….are also known as liquid assets and include cash, marketable securities, accounts receivable (debtors), notes/bills receivable and inventory.
  8.  …..are assets purchased for use in the business on a permanent basis.
  9.  ….is the capital available for working the business.

11. Find and read sentences explaining the title of the text.

12. Find in the text sentences expressing such ideas.

  1.  Financial manager plays a very important role in business.
  2.  Financial manager has to work with financial statements.
  3.  Balance sheet includes three major components.
  4.  Fixed capital and working capital are not the same things.
  5.  Any firm has a person who performs the financial functions.

13. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  Capital is the money from shareholders and lenders that can be invested in assets in order to start a business and produce profit.
  2.  Work in process means partly finished goods in a manufacturing business or uncompleted contracts in a contracting business.
  3.  Manager is a person employed to control and direct part or all of the work of the employees in a business, industrial concern or other organization.
  4.  Managers have different resources at their disposal.
  5.  Financial statements include the balance sheet and the liabilities of the enterprise.
  6.  Long-term liabilities mean obligations usually repayable within the accounting period.
  7.  Current liabilities mean obligations payable after the accounting period.
  8.  Investment is an act of investing of funds in the securities of another company.
  9.  Paid-up capital is the part of the profits of the shareholders which is not paid out to them as dividends but ploughed back in the business.
  10.  Retained earnings are the initial amount of funds contributed by the shareholders.
  11.  Liabilities are the second component of the income statement and they mean the debts owned by a business to its creditors or to its owners.
  12.  Accounts payable are the amounts to be paid by a company for goods and services.
  13.  Accounts receivable means money owned to a business by its clients for goods and services.

14. Find the definitions to the next terms: manager, current liabilities, retained earnings, paid-up capital, accounts payable, accounts receivable, capital, long-term liabilities, assets, fixed assets, fixed capital, working capital.

  1.  …..is the capital which businessman can use for work in business.
  2.  …..is a person who controls the work of the employees in a business and takes the decisions with reference to the objectives of the firm.
  3.  ….is the sum of money which has to be received by firm from clients for goods and services.
  4.  …..is the store of accumulated wealth contributed to the firm by its proprietors.
  5.  …..mean obligations usually repayable within the accounting period.
  6.  ….mean obligations payable after the accounting period.
  7.  ….is the part of the profits of the shareholders which is not paid out to them as dividends but ploughed back in the business.
  8.  …..are the initial amount of funds contributed by the shareholders.
  9.  …. are the resources owned by the person or business that have some money value and can be used to pay debts, produce goods and make profit.
  10.  …..are the amounts to be paid by a company for goods and services.
  11.  …..are the main funds.
  12.  …..are the main capital.

15. Divide the text into logical group and give them titles.

16. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

Grammar Exercises

a) Supply articles where necessary.

b) Say in what activities financial managers are involved.

Financial Management explains how ... financial managers can help maximize the value of their firms by making better decisions in such areas as capital budgeting, choice of capital structure, and working capital management.

Financial managers also have ... responsibility for deciding the credit terms under which customers may buy, how much inventory ... firm should carry, how much cash to have on hand, what types of securities to issue, whether to acquire ... other firms (merger analysis) and how much of the firm earnings to plough back in the business versus payout as dividends.

A successful firm usually has ... rapid growth in sales, which requires investments in ... plant, equipment and inventory. The financial manager must help decide on ... specific assets to acquire and the best way to finance these investments. For example, should ... firm finance with debt or equity, and if debt is used, should it be long-term or short-term?

In this connection, the financial manager must deal with ... money and capital markets, where funds are raised and where the firm's securities are traded. As a consequence, financial managers of many large companies are responsible for working with investors (for example, mutual funds), bond rating agencies, stock holders, and the general financial community.

Financial managers, controllers in particular, are also responsible for financial accounting - preparation of the financial statements for ... firm, cost accounting - preparation of ... firm's operating budgets, and preparation of reports that the company must file with the various government (local, state and federal) agencies.

One of ... major documents developed and controlled by financial managers is the Enterprise Financial Plan. It comprises ... requirements for financial resources and the amounts currently available and expected in ... future to meet them, i.e. the estimated revenues and expenditures of an enterprise within some future period of time. The enterprise financial plan determines whether ... cumulative revenues exceed the cumulative outlays at every point of time during ... plan period and whether the necessary capital structure is assured.

The enterprise financial plan is composed of ... revenue plan, ... expenditure plan and ... financing or credit plan.

Words you may need:

financial accounting  фінансовий облік

cumulative    сукупний

cost accounting   виробничий облік

file    представляти який-небудь документ

d) Explain how an enterprise can achieve its prime objective - profitable growth.

17. Prepare a short talk on the following:

  1.  Explain why all firms need both fixed and working capital.
  2.  Explain why it is difficult to be a financial manager.
  3.  Current and fixed assets and their management.
  4.  The main sources and uses of funds for a business firm.

Unit 18

( Part II)

financial ratios    фінансовий коефіцієнт

price/earning ratio   відношення ринкової ціни до чистого  прибутку компанії

gearing ratio    відношення заборгованості до власного капіталу

liquidity ratio    коефіцієнт ліквідності    

financial leverage ratios   доля позикових коштів у сукупному капіталі

ratio analysis    кредитний та інвестиційний аналіз

solvency    платоспроможність

current ratio    відношення оборотного капіталу до короткострокових обов’язань

debt-to-equity ratio                  відношення власних та позикових коштів

inventory turnover ratio   оборотність товарних запасів

return on equity    прибуток від акцій, прибуток на власний капітал   

return on assets    прибуток від майна

payback of an investment   окупність інвестицій

Read the text and dialogue.

FINANCIAL RATIOS

A financial ratio is a relationship between particular groups of assets or liabilities of an enterprise and corresponding totals of assets or liabilities, or between assets or liabilities and flows like turnover or revenue.

A leading example is the price/earnings ratio which is the ratio of the current quoted stock exchange price of an equity to the most recent declared dividend per share.

Another is the ratio of equity to debt finance (gearing ratio) within a company's overall capital structure.

Financial ratios are used to give summary indications of the financial performance, prospects or strength of a company which help financial managers to make a comparison of a firm's financial condition over time or in relation to other firms.

No single financial ratio can answer all questions analysts may have.

In fact, five different groups of ratios have been developed:

  1.  liquidity ratios indicating a firm's ability to meet short-term financial obligations;
  2.  activity ratios indicating how efficiently a firm is using its assets to generate sales;
  3.  financial leverage ratios indicating a firm's capacity to meet short- and long-term debt obligations;
  4.  profitability ratios measuring how effectively a firm's management generates profits on sales, assets, and stockholders' investments;
  5.  market-based ratios measuring the financial market's evaluation of a company's stock.

RATIO ANALYSIS

Ukrainian: Are there any guidelines which enable the businessman to conduct his affairs efficiently and profitably and to compare his company's performance with those of other companies?

 American: Yes, there are. One of the major tools is ratio analysis. Ratios make it easy to see trends, risks and to assess the results.

All most important decisions are based on ratios.

 U.:   What are the most commonly used ratios?

 Am.: We in the US operate with three main categories of ratios. We use ratios measuring solvency, efficiency, and profitability.

 U.:   Could you give some examples of each?

Am.: Yes, sure. Let's begin with measuring solvency.

U.:    Solvency is the ability of a firm to meet its short-term liabilities as they come due, isn't it?

 Am.: Yes, you are absolutely right. And one of the most commonly used measures of solvency is the current ratio.

U.:    How is it found?

 Am.: This is the ratio of all current assets, liquid assets, accounts receivable and inventories to current liabilities.

U.:   When is a firm considered solvent on this measure?

 Am.: If its current ratio is 2 to 1 or above. There is another ratio related to this one. It's the-debt-to-equity ratio. It is found by dividing total debt by the equity.

U.:   I see. It's the indebtedness of a firm compared to its equity capital. But it's really more a measure of leverage than a measure of solvency.

 Am.: Yes, you are right in a way. A highly leveraged company is one with a high proportion of bank loans to equity. But the ratio has some bearing on solvency, too. A low debt-to-equity ratio makes it easier for a firm to borrow to meet its short-term cash needs.

U.:   That's clear. A ratio higher than 1 to 1 would make a firm a risky borrower. And what ratios help to measure a firm's efficiency?

 Am.: One such ratio is that of sales to inventory, called the inventory turnover ratio.

U.:      We say that stock or inventory has "turned over" when it has been sold and replaced with new stock. If we want to double our profit one way is to double the rate of stock turnover.

AM.: Yes, and this ratio varies widely from one industry to another. We can't say whether the ratio is good or poor until we know the product we are discussing. And now let's turn to measuring profitability.

  U.: It's the figure that really matters in the end to any businessman, isn't it?

AM.: Yes, practically there are two measures that compare profit to the capital invested in a firm. One such measure is return on equity and the other is return on assets. Both are very important for investors.

U.: No doubt. Knowing the payback of an investment is important because the earlier the payback, the quicker the money can be reinvested, and also the less the risk investors are exposed to.

AM.: You are right; the ratios show how the capital “works". Investors' decisions totally depend on the ratios.

Exercises

1. Answer the questions.

  1.  What is the financial ratio?
  2.  What do financial ratios help to measure?
  3.  What groups of ratios have been developed?
  4.  Can you give examples of ratios measuring solvency, efficiency and profitability?

2. Find in the text English equivalents for the following Ukrainian phrases:

Фінансові коефіцієнти; відношення ринкової цини до чистого прибутку компанії; відношення заборгованості до власного капіталу; коефіцієнти ліквідності; коефіцієнти, що характеризують долю власних коштів у сукупному капіталі компанії; коефіцієнт прибутку; прибуток від продажу; кредитний та інвестиційний аналіз; вести справи ефективно; оцінювати результати;

платоспроможність; відношення оборотного капіталу до короткострокових зобов’язань; відношення власних та позикових коштів; мати відношення до чого-небудь; задовольняти потреби у готівці; оборотність товарних запасів;швидкість обороту; істотно відрізнятися; прибуток від акцій; прибуток від майна; окупність інвестицій.

3. Match the antonyms.

Useful    easy

Next    to fail

Difficult   smallest

Largest   quantity

Inside    present   

To succeed   outside

To increase   previous

Quality   useless

Future    to decrease

4. Underline the negative prefixes in the following words:

Unknown, impossible, inconsistent, unimportant, unsuccessful, mismanagement, miscalculation, disabled, unprofitable, undeveloped.

5. Make up sentences putting the words in the correct order.

  1.  Ratios, it, easy, make, trends, to, risks, see, and, the, results, to, assess.
  2.  Another, a , is, ratio, to equity, finance, debt, of, within, overall, structure, capital, a, company’s.
  3.  Liquidity, indicating, ratios, a, ability, firm’s, to, short-term, meet, obligations, financial.
  4.  Financial, ratios, leverage, a, indicating, to, meet, capacity, firm’s, debt, short- and long-term, obligations.
  5.  Solvency, is, ability, the, to, meet, a, firm, of, its, liabilities, short-term.
  6.  One, is, tools, major, of, the, analysis, ratio.

6. Complete the sentences with the following words: financial ratio, liquidity ratios, activity ratios, financial leverage ratios, profitability ratios, solvency, current ratio, price ratio, the ratio of equity to debt finance.

  1.  ….is the ratio of all current assets, liquid assets, accounts receivable and inventories to current liabilities.
  2.  …. is a relationship between particular groups of assets or liabilities of an enterprise and corresponding totals of assets or liabilities, or between assets or liabilities and flows like turnover or revenue.
  3.  …. measuring   how    effectively   a   firm's management generates profits on sales, assets, and stockholders' investments.
  4.  …. is the ability of a firm to meet its short-term liabilities.
  5.  .. indicating a firm's ability to meet short-term financial obligations.
  6.  ……indicating a firm's capacity to meet short- and long-term debt obligations.
  7.  …. indicating how efficiently a firm is using its assets to generate sales.
  8.  is used within a company's overall capital structure.
  9.  …is the ratio of the current quoted stock exchange price of an equity to the most recent declared dividend per share.

7. Find and read sentences explaining the title of the text.

8. Find in the texts sentences expressing such ideas.

  1.  Financial ratios help managers to understand the financial conditions of the firm.
  2.  Managers know five different groups of ratios.
  3.  In the US managers use another three categories of ratios.
  4.  The current ratio helps to measure the solvency.
  5.  We can define the debt-to-equity ratio dividing total debt by the equity.
  6.  The inventory turnover ratio helps to measure a firm’s efficiency.
  7.  Investors have to know the return on equity and the return on assets.

9. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  Doubling the rate of stock turnover we doubled the profit.
  2.  The return on equity and the return on assets are two measures that compare profit to the capital invested in a firm.
  3.  The inventory turnover ratio helps to measure current assets.
  4.  Financial leverage ratio is indicating how efficiently a firm is using its assets to generate sales.
  5.  Liquidity ratios are indicating a firm's capacity to meet short- and long-term debt obligations.
  6.  Ratios make it easy to see trends, risks and to assess the results.
  7.  Solvency is the ability of a firm to meet its short-term liabilities.

10. Divide the text into logical group and give them titles.

11. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

12. Read two texts about manager’s work and be ready to discuss it.

a) Fill each gap with a suitable word from the box.

b) Sum up the text in 5-7 sentences and present your summary in class.

c) Explain the differences between macroeconomics and microeconomics.

I

Operation    policy    familiar

Business    says    demand

Notions    lead    affects

Whole

Microeconomics   operates   success

Contemporary financial managers should be familiar with two areas of economics - macroeconomics and ...

Macroeconomics   is   concerned   with   the over-all   institutional environment in which the firm…. . It looks, in other words, at the economy as a…. . Macroeconomics is concerned with the institutional structure of the banking system, money and capital markets,   financial   intermediaries,   monetary,   credit   and   fiscal….  and economic policies dealing with and controlling the level of activity within an economy. Since business firms operate in the macroeconomic environment, it is important for financial managers to understand the broad economic…. . Specifically, they should recognise and understand how monetary policy…. the cost and the availability of funds; be versed in fiscal policy and how it affects the economy; be aware of the various financial institutions and their modes of operations, to evaluate the potential investment/financing outlets; and understand the consequences of various levels of economic activity and changes in economic policy for their decision environment and so on.

Microeconomics deals with the economic decisions of…….and organizations. It concerns itself with the determination of optimal operating strategies. In other words, the theories of microeconomics provide for effective…..of business firms. They are concerned with defining actions that will permit the firms to achieve ….  .

The concepts and theories of microeconomics relevant to financial management are, for instance, those involving supply and…..relationship and profit maximization strategies, issues related to the mix of productive factors, "optimal" sales level and product pricing strategies, risk and the determination of value and the rationale for depreciating assets. In addition, the primary principle that applies in financial management is marginal analysis which….. that financial decisions should be made on the basis of comparison of marginal revenue and marginal cost. Such decisions will….to an increase in profits of the firm. Thus, financial managers must be……with the basic microeconomics.

Words you may need:

to be versed (in)    розбиратися у чомусь

outlets     можливості

rationale    основна причина, логічне обґрунтування

marginal analysis   аналіз по граничному показнику

marginal revenue   граничний прибуток (предельный)

marginal costs    граничні витрати ( предельные издержки)

II

a) Supply the articles where necessary.

  1.  Write down 3-5 questions about the texts.
  2.   Say in what activities financial managers are involved.

a) Financial Management explains how ... financial managers can help maximize the value of their firms by making better decisions in such areas as capital budgeting, choice of capital structure, am working capital management.

Financial managers also have ... responsibility for deciding the credit terms under which customers may buy, how much inventory .. firm should carry, how much cash to have on hand, what types of securities to issue, whether to acquire ... other firms (merger analysis) and how much of the firm earnings to plough back in the business versus payout as dividends.

A successful firm usually has ... rapid growth in sales, which requires investments in ... plant, equipment and inventory. The financial manager must help decide on ... specific assets to acquire and the best way to finance these investments. For example, should ... firm finance with debt or equity, and if debt is used, should it be long-term or short-term?

In this connection, the financial manager must deal with ... money and capital markets, where funds are raised and where the firm's securities are traded. As a consequence, financial managers of many large companies are responsible for working with investors (for example, mutual funds), bond rating agencies, stock holders, and the general financial community.

Financial managers, controllers in particular, are also responsible for financial accounting - preparation of the financial statements for ... firm, cost accounting - preparation of ... firm's operating budgets, and preparation of reports that the company must file with the various government (local, state and federal) agencies.

One of... major documents developed and controlled by financial managers is the Enterprise Financial Plan. It comprises ... requirements for financial resources and the amounts currently available and expected in ... future to meet them, i.e. the estimated revenues and expenditures of an enterprise within some future period of time. The enterprise financial plan determines whether ... cumulative revenues exceed the cumulative outlays at every point of time during ... plan period and whether the necessary capital structure is assured.

The enterprise financial plan is composed of ... revenue plan, ... expenditure plan and ... financing or credit plan.

Words you may need:

financial accounting    фінансовий облік (финансовый учет)

cost accounting    виробничий облік (производственный учет)

file     пред’являти який –небудь документ (представлять какой-л. документ )

cumulative    сукупний (совокупный)

13. Prepare a short talk on the following.

  1.  What financial ratios are taken into account by managers to enable them to conduct their business effectively?
  2.  Financial analysis is the use of financial data to evaluate the financial position of a firm. How does it work in practice?
  3.  What questions do financial managers face daily?
  4.  Imagine that you are a financial manager. Describe you duties. Is it difficult for you?

Unit 19

accounting    бухгалтерський облік

capture     отримання

book-keeping    рахівництво

record     запис

balance sheet    балансовий звіт

income statement    звіт про прибутки та збитки

profit and loss account   рахунок прибутків та збитків

double-entry bookkeeping   бухгалтерський облік по методу подвійного запису  

cash basis    метод запису прибутків та збитків на рахунках тільки при їх надходженні та     сплаті

accrual basis    метод нарахування при обліку прибутків та збитків на рахунках; запис      прибутків та збитків у момент завершення операції

debit side    ліва сторона балансу

credit side    права сторона балансу   

communication    передача (інформації)

processing    опрацювання

1. Read sentences only with new lexis and translate them.

  1.  The objective of financial statements is to provide useful information for users.
  2.  Accounting is used to describe the transactions entered into by all kinds of organizations.
  3.  Ukrainian companies report the full cost of goods sold, which includes production costs, transportation, depreciation, marketing and financial expenses.
  4.  Fixed assets posed the most serious problem.
  5.  Accounting can be divided into three phases: capture, processing and communication of financial information.
  6.  Accounting can show the managers or owners of a business whether or not the business is operating at a profit.
  7.  Accounting is based on the accounting equation.
  8.  Changes in the balance sheet are made according to the principle of double-entry bookkeeping.

2. Put the missing letters.

Ac..unting, c..sh b..s..s, a…rual b..s..s, d..bit s..de, b..l..nce sh..t, b…k-k…ping, c..pt..re, pr..ces..ing, cr..d..t s..de, d..ble-..ntry b..k-k..ping.

Read the text.

ACCOUNTING PRINCIPLES AND CONCEPTS

The accounting system in any given country is one of the key elements of the economic system. It is determined to a significant extent1 by the level and direction of the economic system's development.

The most important theoretical concept of the Anglo-American accounting may be summed up as follows: the subject of accounting is the calculation of the financial results of an economic entity's business activity.

Accounting is used to describe the transactions entered into by all kinds of organizations.

Accounting can be divided into three phases: capture, processing and communication of financial information.

The first phase, the process of capturing financial information and recording it, is called book-keeping. Accounting, in the true sense of the word,2 extends far beyond the actual making of records. It includes their analysis and interpretation, it shows the relationship between the financial results and events which have created them.

Accounting can show the managers or owners of a business whether or not the business is operating at a profit, whether or not the business will be able to meet its commitments3 as they fall due.4

Accounting is based on the accounting equation, which states that a firm's assets must equal its liabilities plus its owners' equity5.

Assets and liabilities, profits or losses are listed in financial statements. The two main types of financial statements are the balance sheet and the income statement (profit and loss account).

The balance sheet lists a firm's assets, liabilities and owner's equity at a point of time.7

Changes in the balance sheet are made according to the principle of double-entry bookkeeping. This principle made its appearance in the 13th century in Northern Italy. It was improved and disseminated at the end of the 14th century by the work of Luca Pacioli, a monk and a university teacher. This principle states that each transaction must be recorded on the balance sheet as two separate entries so that the accounting equation will hold at all times,8 the totals of each side will always equal one another, and that this will always be true no matter how many transactions are entered into.

Balance sheets are drawn up periodically: monthly, quarterly, half-yearly, annually.

There is an account for every asset, every liability and capital. Accounts can be prepared either on a cash or accrual basis. Each account should be shown on a separate page.

The double entry system divides each page into two halves. The left-hand side is called the debit side, while the right-hand side is called the credit side.

The balance sheet shows a lot of useful financial information, but it does not show everything. A firm's sales, costs, and profits for a given period are shown in an income statement.

Words you need:

to a significant extent1   у значній мірі

in the true sense of the word2  у повному розумінні слова

to meet one’s commitments3  виконувати зобов’язання

to fall due4    підлягати оплаті, виконуванню

owners' equity5    власний капітал компанії

at a point of time7   у певний період часу

will hold at all times8   залишається завжди справедливим

Exercises

1. Answer the questions.

  1.  What role does an accounting system play in an economy?
  2.  Into what phases is accounting broken down?
  3.  What is accounting equation?
  4.  What is the most widely practiced principle of bookkeeping?
  5.  What does the balance sheet list?
  6.  What is shown in the income statement?

2. Find in the text English equivalents for the following Ukrainian phrases:

Ключовий елемент економічної діяльності; фінансові результати господарчої діяльності суб’єкта, який господарює; угоди, в які вступають різні організації; отримання, опрацювання та передача інформації; відображення інформації у фінансовій звітності; працювати з прибутком; виконувати

свої зобов’язання; бухгалтерське рівняння; активи повинні бути рівними пасивам; у балансі відображаються; облік по принципу подвійного запису;  відображати у балансі, складати баланс; рахунок прибутків та збитків.

3. Think of the English synonyms to these Ukrainian verbs: относить (на), отражать (в учете), учитывать.

4. Think of the words describing characteristics that make information useful.

5. Think of the nouns that are most often used with the following verbs:

to measure, to ensure, to communicate, to prepare, to debit, to credit, to draw up, to disclose, to report;

6. Match the verbs from (a) with the nouns from (b) below:

a) To meet     b) provision of information

To ensure     needs

To harmonize     standards

To develop     performance

To assess     service

To provide     a boost

To give      license

To enhance     accounting standards

To grant      targets

To achieve     credibility

7. Make up sentences putting the words in the correct order.

  1.  The, subject, accounting, of, is, results, of, the, financial, the, calculation, of, an, business, economic, entity’s, activity.
  2.  Accounting, be, divided, can, three, phases, into.
  3.  The, is, first, phase, bookkeeping.
  4.  Accounting, based, is, equation, accounting, on, the.
  5.  Balance, income, sheet, statement, are, main, types, two, of, statements, financial.
  6.  Balance, are, sheet, up, drawn, periodically.
  7.  The, system, double, entry, of, consists, the, the, side, side, credit, debit, and.
  8.  The, objective, statement, of, the, financial, is, to, useful, provide, for, users, information.

8. Complete the sentences with the following words: accounting, bookkeeping, accounting equation, balance sheet, income statements, accounting, the accounting system, financial statements, principle of double entry bookkeeping, accounts, the double entry system.

  1.  The process of capturing financial information and recording it, is called…
  2.  The subject of …..is the calculation of the financial results of an economic entity's business activity.
  3.  …….lists a firm's assets, liabilities and owner's equity at a point of time.
  4.  ........states that a firm's assets must equal its liabilities plus its owners' equity.
  5.  A firm's sales, costs, and profits for a given period are shown in an…. .
  6.  ……in any given country is one of the key elements of the economic system.
  7.  ….is based on the accounting equation.
  8.  ………states that each transaction must be recorded on the balance sheet as two separate entries so that the accounting equation will hold at all times,8 the totals of each side will always equal one another, and that this will always be true no matter how many transactions are entered into.
  9.  The two main types of …….are the balance sheet and the income statement (profit and loss account).
  10.  …….can be prepared either on a cash or accrual basis.
  11.  …….divides each page into two halves.

9. Find and read sentences explaining the title of the text.

10. Find in the text sentences expressing such ideas.

  1.  Accounting system plays an important role in an economy.
  2.  We can divide accounting into three phases.
  3.  Accounting, in the true sense of the word, extends far beyond the actual making of records.
  4.  Financial statements indicate the financial health of the firm.
  5.  Balance sheet is one of the main documents of the firm.
  6.  Changes in the balance sheet are made according to the principle of double-entry bookkeeping.
  7.  The double entry system has two components.
  8.  Income statement is another financial document of the firm.

11. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  A balance sheet is a financial statement that reports the financial condition of a firm at a specific time.
  2.  The method used to record and summarize accounting data into reports is called an accounting system.
  3.  One of the purposes of accounting is to help managers evaluate the financial condition of the firm so that they may make better decisions.
  4.  Assets and liabilities, profits or losses are listed in income statement.
  5.  Changes in the income statement are made according to the principle of double-entry bookkeeping.
  6.  The principle of double-entry bookkeeping made its appearance in the 17th century in Northern Germany.
  7.  The principle of double-entry bookkeeping states that each transaction must be recorded on the balance sheet as two separate entries so that the accounting equation will hold at all times,8 the totals of each side will always equal one another, and that this will always be true no matter how many transactions are entered into.
  8.  The double entry system is a part of income statement.

12. Find the definitions to the next terms: accounting system, book-keeping, accounting, liabilities, balance sheet.

  1.  The methods used to record and summarize accounting data into reports are called…
  2.  It is the recording of all money received into and paid out of a company, including profit and loss account and balance sheet.
  3.  It is a statement showing the financial position of a business at a certain date, usually at the end of the financial year.
  4.  It is a system of recording the money value of business dealings, income and expenditure accounts to enable the management of a concern to see the financial position at any time.
  5.  These are the debts owned by a business to its creditors and to its owners.

13. Divide the text into logical group and give them titles.

14. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

15. a) Read the text and say which information is new for you.

b) Explain the difference between managerial and financial accounting.

c) Write down 3-5 questions about the text.

Accounting information

In general, accounting information can be classified into two main categories: financial accounting (or public information) and managerial accounting (or private information).

Managerial accounting deals with cost and profit relationship, efficiency and productivity, planning and control, pricing decisions, capital budgeting. Not being generally spread outside the company, this information provides a wide variety of specialized reports for division managers, department heads.

Financial accounting differs from managerial accounting because the information and analyses are for people outside of the organization. This information goes to owners, creditors and lenders, governmental units and the general public.

A standard set of financial statement is expected to be prepared regularly by financial accounting and published in an annual report at the end of the fiscal year. These statements include the following items: 1) balance sheet, 2) the statement of cash flow, 3) the income statement, 4) the statement of retained earnings.

The statement of cash flow shows the changes in the company’s financial position and provides information which is not available in either an income statement or a balance sheet. Thus, the statement of cash flow represent the sources and the uses of the company’s funds for operating activities, applications of working capital and data about additional financial support.

The statement of retained earnings shows investors what has happened to their ownership in the company, how earnings and new stocks have increased its value, and what dividends were paid.

Words you need:

managerial accounting   управлінська звітність

statement of cash flows   звітність про рух грошових потоків

statement of retained earnings  звітність про прибутки, які нерозподілені

operating activities   управлінська діяльність

Grammar Exercises

1. Open the brackets using the verbs in appropriate form.

Accounting as it (to exist) today (may) (to view) as a system of assumptions, concepts, doctrines which (to summarize) in generally (to accept) accounting principles. Many of these principles (to develop)  gradually, but only in recent decades these principles (to recognize) as laws. Economic theory (to deal) with several following fundamental accounting concepts.

  1.  The on-going concept (концепція підприємства, яке працює) (to state) that the entity (юридична особа) that (to be) (to perform) activity and (to be) (to receive) accounting information (must) (to define) clearly and that the relationship (to exist) between the entity and external parties (must) (to understand) clearly.
  2.  According to the historical-cost principle (метод підрахунку з використанням цін придбань) economic resources (should) (to evaluate) in terms of the amounts of money (to exchange). When a transaction (to occur), the exchange price (to be) a measure of the value of the economic resources that (to exchange).
  3.  The realization concept (концепція реалізації) (to disclose) that accounting (to take place) only for those economic events to which the entity (to be) a party.
  4.  In accordance with the matching principle (концепція зіставлення) income (to calculate) by matching revenues with the expenses incurred (нести збитки, ) in order to obtain that revenue.

The accrual concept (концепція нарощування) (to define) revenues and expenses as inflow and outflow of all assets in the course of operating the enterprise.

The consistency concept (концепция незмінністі) assumes the accounting methods (to use) at a given time (must) (to be) in line with those previously (to use) for describing company performance. Such consistency (to allow) data of different periods (to compare).

The disclosure principle (принцип розкриття сутності) (to emphasize) that financial statements (should) (to present) clearly the most useful in formation.

The prudence concept (концепція обережності) (to require) all entries (to concern) income and revenue (should not) (to record) until money (to receive), but records (to relate) to possible future losses and risk (ought) (to do) as soon as they (to predict).

b) Find in the text three synonyms for the translation of the adverb «згідно, відповідно.»

c) Using the text finish the next sentences in Conditional Mood.

  1.  If the accountant expected any losses in future, he ...
  2.  If we consider accounting existing today, we ...
  3.  If we had prepared financial statements, all useful information ...
  4.  If the income were calculated, the matching principle ...
  5.  If there were any relations between the entity and the external parties, they...
  6.  If a transaction had occurred, the exchange price ...
  7.  If we plan to estimate the company's performance for some years, the
    same accounting methods ...
  8.  Only if the entity were engaged in this transaction, the data about this
    economic event...

2. Open the brackets using the verbs in appropriate form.

  1.  Equity would decrease if the owners (to withdraw) funds from the business.
  2.  If there (to be) a change in the amount for one item in a balance sheet, it will be always accompanied by an equal change in some other item.
  3.  If cash is received from the issuance of bonds, this figures (not to be shown) in the income statement.
  4.  The same amount of depreciation would be evaluated each year if the accountant (to choose) the straight-line method.
  5.  If the company {to choose) proper ways to use its assets for producing goods and rendering services, it would have earned enough revenue to stay in business.
  6.  If a customer received commodities or promised to pay the company in the future, the revenue (to be recorded) in accounts receivable.
  7.  If cash (to be paid) to purchase equipment, this figure will be added to the asset account of a plant.

If the company (to introduce) a new product, it would have increased the company's future cash flows.

16. Prepare a short talk on the following:

  1.  What sort of statement the balance sheet is.
  2.  What sort of statement the income statement is.
  3.  The difference between the two branches of accounting.
  4.  Accounting principles.

Unit 20

receipt      грошові надходження; прибуток

journal      бухгалтерський журнал, відомість

ledger      бухгалтерська книга

posting      перенесення у бухгалтерську книгу

to draw up     складати

trial balance     попередній бухгалтерський баланс

to bring accounts to balance   складати зведений баланс (сводный)

favourable balance    активній баланс    

balance on an account    залишок рахунку

balance in hand     грошова готівка

balance with foreign banks   залишки на рахунках у закордонних банках

error      помилка

preliminary     попередній

1. Read sentences only with new lexis and translate them.

  1.  The balance sheet cannot be completed until the depreciation of the capital assets is calculated.
  2.  For management of any company to be efficient, extensive and accurate information concerning receipts and payments, assets and liabilities, depreciation of assets and other data about company status are required.
  3.  The bank won't make a loan to any company until its experts study thoroughly the company's balance sheet.
  4.  In the second step in the accounting cycle, the amounts from the various journals are usually monthly transferred to the company's general ledger - a procedure called posting.
  5.  A new product is unlikely to be sold successfully until a wide advertising campaign is organized professionally.
  6.  The demand for high-quality goods remains low until the consumers' incomes rise.
  7.  This procedure known as the drawing up of a trial balance and those that follow it usually take place at the end of the fiscal year.
  8.  Until a country's imports exceed its exports, there is a deficit in the trade balance.

2. Put the missing letters.

r..c…pts, j…rnal, l..d..er, p..st..ng, dr..w up, tr…l bal..nce, b..l..nce of tr..de, b..l..nce in h..nd, b..l..nce with f..re…n b..nks, fav..rable b..l..nce.

Read the text.

Bookkeeping as Part of Accounting Cycle

For management of any company to be efficient, extensive and accurate information concerning receipts and payments, assets and liabilities, depreciation of assets and other data about company status are required. Such information being obtained mainly from different records, additional funds and time should be invested in bookkeeping and accounting system.

In general, accounting and bookkeeping mean identifying, measuring, recording economic information about any business, bookkeeping being considered the preliminary stage and part of the larger field of accounting.

The task of a bookkeeper is to ensure the record-keeping aspect of accounting and therefore to provide the data to which accounting principles are applied in the preparation of financial statements. Bookkeeping provides the basic accounting data by systematical recording such day-to-day financial information as income from the sale of products or services, expenses of business operations such as the cost of the goods sold and overhead expenses1 such as a rent, wages, salaries.

Accounting principles determine which financial events and transactions should be recorded in the bookkeeper's books. The analysis and interpretation of these records is the primary function of accounting. The various financial statements produced by accountants then provide managers with the basis for future financial planning and control, and provide other interested parties (investors, the government) with useful information about the company.

Modern accounting system is considered to be a seven-step cycle. The first three steps fall under the bookkeeping function, such as: 1) the systematic recording of financial transactions; 2) the transferring of the amounts from various journals to general ledger (also called "posting step"); 3) the drawing up of the trial balance.

Record keeping of companies is based on a double-entry system, due to which each transaction is recorded on the basis of its dual impact2 on the company's financial position. To make a complete bookkeeping record of every transaction in a journal, one should consider interrelated aspects3 of every transaction, and entries must be made in different accounts to keep the ins (receipts) and outs (payments) balanced.

A typical account is known to have two sides: the items on the left side are called debits, while the items on the right side are credits.

Thus, double-entry bookkeeping doesn't mean that the same transaction is entered twice, it means that the same amount of money is always debited to one account and credited to another account, each record having its own effect on the whole financial structure of the company. Certain accounts are increased with debits and decreased with credits, while other accounts are increased with credits and decreased with debits.

In the second step in the accounting cycle, the amounts from the various journals are usually monthly transferred to the company's general ledger - a procedure called posting. Posting data to the ledgers is followed by listing the balances of all the accounts and calculating whether the sum of all the debit balances agrees with the sum of all the credit balances. This procedure known as the drawing up of a trial balance and those that follow it usually take place at the end of the fiscal year. By making a trial balance, the record-keeping accuracy can be checked. The trial balance having been successfully prepared, the bookkeeping portion of the accounting cycle is completed.

The double-entry system of bookkeeping enables every company to determine at any time the value of each item that is owned, how much of this value belongs to creditors, the total profit and how much belongs to the business clear of debt. Thus, one advantage of the double-entry system is that its information is complete enough to be used as the basis for making business decisions. Another advantage is that errors are readily detected, since the system is based on equations that must always be in balance.

Words you need:

overhead expenses1   накладні витрати

dual impact2    подвійний вплив

interrelated aspects3   взаємопов’язані аспекти

Exercises

1. Answer the questions.

  1.  What kind of information is of great importance for proper company management?
  2.  What role does bookkeeping play in the accounting cycle?
  3.  What kind of data is collected by a bookkeeper?
  4.  What is the difference between bookkeeping and accounting?
  5.  Who is interested in obtaining accurate accounting information?
  6.  What is the modern concept of the accounting system?
  7.  What tasks should a bookkeeper solve at the first three steps of the accounting cycle?
  8.  What does double-entry bookkeeping mean?
  9.  What data are recorded in the company's general ledger?
  10.  When is the bookkeeping cycle considered to be completed?
  11.  What are the advantages of the double-entry system?

2. Find in the text English equivalents for the following Ukrainian phrases:

Для того, щоб керування компанією було ефективним; така інформація, яка отримана; бухгалтерський облік  розглядається, як; забезпечити ведення обліку; повсякденна фінансова інформація; принципи фінансового обліку визначають; первинна функція обліку; забезпечують менеджерів; розглядається як система із семи кроків; ведення обліку засновується на системі бухгалтерського обліку з подвійним записом; для того щоб зробити повний бухгалтерський запис; записується двічі; визначені рахунки зростають з дебітом; загальна бухгалтерська книга; запис даних у головну бухгалтерську книгу;  складення попереднього балансу.

3. Find in the text nouns that are most often used with the following verbs and adjectives:

To record, to prepare, to pay, to receive, profitable, to disagree, to decide, to determine, to equal, to inform, to invest, to manage, to balance, to interpret, valuable, to analyze, to post, accurate.

4. Think of the word combinations with these words and words from the text.

Periodic, valuable, current, various, accurate, trial, preliminary, separate, systematic, typical, basic, proper, financial, double, extensive, additional, general, useful.

5. Make up sentences from two parts

  1.  The preparation of a trial balance includes   
  2.  A special book known as a journal is used   
  3.  Double-entry bookkeeping is a system  of recording  accounts where   
  4.  The posting procedure consists of
  5.  In bookkeeping a sum of money paid or owed by a business
  6.  One should know that crediting means

7. Unlike crediting the debiting procedure means

  1.  Bookkeeping as part of the accounting cycle deals with
  2.  A bookkeeper is sure to be fully responsible for

10. The sum of money gained by a business

a) recording in an account a sum of money paid out or still owed.

b) regular transferring entries from the  journal to the appropriate accounts in the ledger

c) for recording all primary information about business transaction

d) the accurate performance of the first three steps in the accounting cycle

e) is recorded on the right-hand side of a list of accounts.

f) recording all money received by and paid out of a company in special books or computer files.

g) the checking of accounts by comparing the total credits with the total debits.

h) is shown on the left-hand side of a list of accounts.

i) each sale or purchase is shown as having an effect on both the debit and the credit columns of an account.

j) recording the payment of a sum of money into an account.

6. Complete the sentences with the following words: list; records, statements; posting data; double-entry, journals, ledgers; bookkeeping, trial balance; double-entry, balance, receipts, debits;  preliminary; accuracy; balance, credit, debits; errors.  

1. Every company needs some way of keeping systematic ... about all transactions that have taken place, all this information being necessary to prepare further financial ....

2. The most commonly used books are known to be called ... and ....

3 to the general ledger is usually done in the second step of the accounting cycle.

4. The system is based on the equations that should be always kept in ... : payments must equal ..., and credits must balance ... .

5. The ... cycle is considered to be completed when the.. has been drawn up.

  1.  The laboratories are doing some ... experiments before starting work on this project.
  2.  ... and responsibility are sure to be the main qualities of any bookkeeper.
  3.  Economists expect new computer programmes to be very helpful in detecting possible ... in the accounting system.
  4.  In accounting and banking a ... is calculated as the difference between the total amount of money coming into (known as ...) and money going out of (known as ...) an account.
  5.  The balance sheet is known to ... the assets the firm owns and the liabilities for which it is responsible at a given period of time.

7. Find and read sentences explaining the title of the text.

  1.  Find in the text sentences expressing such ideas

1. The task of bookkeeping is to record systematically all transactions of the company and to provide accounting with all the necessary data.

2. To complete the bookkeeper’s work, a trial balance summarizing all debits and credits should be prepared at the end of the fiscal year.

3. The accountants know the financial statements help them to determine debts and profits of a company during a given period.

4. In order to know whether the receipts and payments are in balance, it is necessary to keep accurate double-entry bookkeeping system.

5. For the firm to be successful, the data about assets, liabilities and debts should be available at any given moment.

6. The posting of data into the ledger to be done by a bookkeeper is known as the second step in the accounting cycle.

7. Everybody believes the double entry system to be of great value in business activity and has several advantages.

9. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  The recording of all the company’s transactions should be done systematically.
  2.  The accounting cycle is known to consist of seven main steps, the bookkeeping being responsible for the analysis and interpretation of the entries.
  3.  A bookkeeper deals with taxes, cash flow, which includes cash receipts and payments, sales, purchases and different other business transactions.
  4.  The record-keeping accuracy can’t be checked until total debits and total credits are added together.
  5.  Disagreement between the total of the debits and the total of the credits in the trial balance means that there is no error in the records.
  6.  Before posting the data the bookkeeper began calculation debit and credit balances.
  7.  Keeping records accurately is very important both for a company and tax authorities.

10. Divide the text into logical group and give them titles.

11. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

Grammar Exercises

1

a) Supply the prepositions of (9), on (2), in (7), by (1) и below (2), where necessary.

b) Find in the text sentences in Passive voice and discuss the text, using passive forms.

The simplest set ... double entry books consists ... a journal and a ledger. When a transaction occurs, it is not entered directly ... the account, but it is first recorded ... a book ... original entries known as a journal.

Several kinds ...journals are used ... a bookkeeper, the general journal being the most common type. To list some recurring (повторяющийся) transactions special journals such as sales, purchases, cash-receipts and cash-disbursements (выплаты) journals are widely used ... bookkeeping. Transactions that cannot be registered ... a special journal and all entries that cannot affect ... cash are recorded ... a general journal.

In a general journal the title ... the account to be debited is placed ... the top line, with its amount shown ... the debit column.

The title ... the account that is to be credited is shown ... it, with its amount placed ... the credit column. ... this may be a written explanation ... the transaction. The total... the debits column should always equal the total ... the credits column ... each general journal page.

2. Open the brackets putting the verbs in the correct form:

At the end of the month or more frequently all journal entries (to post) into the book of accounts (to know) as a general ledger (to consist) of separate pages for each account. The page for each account (to show) its debits and its credits, so that the balance of each account (can) (to determine). As each journal entry (to record) on the (to plan) side of its account, a mark (to place) in the post column of the journal in order (to show) that it already (to record) in the ledger. The date (to use) in the ledger (to be) the date on which the entry first (to record) in the journal. The post column in the account (to use) (to show) which page this entry (to post) to in the ledger.

In addition to the general ledger, a subsidiary (дополнительный) ledger (to use) in order (to provide) information in greater detail about the accounts in the general ledger. For example, the subsidiary ledger (may) (to keep) for the amount of money (to owe) to the company by all its customers, for the wages (to pay) to each employee, for each building or machine (to own) by the company and for amounts (to owe) to each of the company's creditors.

3. Using texts 1 and 2 answer the questions:

  1.  What is the difference between a journal and a ledger?
  2.  What types of journals and ledgers are used in bookkeeping?
  3.  What are the main steps in the process of recording information about transactions?

4. Prepare for a short talk:

  1.  The main tasks of bookkeeping.
  2.  Imagine you are a bookkeeper. What do you think of this profession? Is it dangerous?
  3.  Could you say that the profit of a firm depends on the bookkeeper’s work?

Unit 21

to examine     перевіряти, проводити ревізію

accounting records    документи обліку

to offer an opinion    зробити висновок

account audit     аудит рахунків

indepth audit report    детальний аудиторський звіт

audit procedures     методика проведення ревізії

substantive test     незалежна перевірка

test in totals     перевірка підсумкових чисел

audit risk     риск неякісного контролю

detection risk     риск (не) виявлення

to qualify the opinion    дати аудиторський висновок з застереженнями (оговорка)

1. Read sentences only with new lexis and translate them.

  1.  Auditing is a process in which an independent accountant-auditor examines a firm's accounting records and financial statements and offers an opinion on their accuracy and reliability.
  2.  The auditor should focus on any misstatement whether it is intentional or unintentional.
  3.  Special bodies of users, such as supervisory boards, employee representatives, government agencies may sometimes need an indepth audit report.
  4.  The auditor normally starts with a study of the business environment the audited company is working in and performs a preliminary analytical review.
  5.  It should be stressed that auditors do not monitor, they offer an opinion, and the audit process and audit procedures are complicated and manifold.
  6.  Defining the audit strategy the auditor has to decide whether to rely on internal controls or to resort to substantive testing applying analytical review procedures, such as tests in totals, comparison with budgets or even statistical analysis of figures.

2. Put the missing letters.

To q…lify the op.n.on, a..dit r..sk, s..bst..nt..ve test, test in t..t..ls, unq..l..f..d risk, ind..p.. a..dit r..port, ac…nt a..dit, to o…er an op..n…n.

Read the text.  

AUDITING

PERFORMING AN AUDIT

Auditing is a process in which an independent accountant-auditor examines a firm's accounting records and financial statements and offers an opinion on their accuracy and reliability.

There are different types of audits, for example, financial statements audits, income tax audits, "value for money" audits, environmental audits, administrative audits, financial management audits, etc.

The accountancy profession has built up1 a significant amount of expertise in performing financial statements audits.

Accounts audits were established as an instrument to protect third parties, the users of accounts, since the auditor's opinion helps establish credibility of financial statements.

Special bodies of users, such as supervisory boards2, employee representatives, government agencies may sometimes need an indepth audit report, which is usually confidential.

It should be stressed that auditors do not monitor, they offer an opinion, and the audit process3 and audit procedures are complicated and manifold4. The auditor's opinion is gradually being built up from a mass of detailed work to the final judgement through the planning and testing stages. The auditor normally starts with a study of the business environment the audited company5 is working in and performs a preliminary analytical review.

Then he should direct his attention to the financial statements. Interestingly enough, however, the auditor's attention is not directed towards the financial statements' elements as such, but towards the correctness of various assumptions made by the management for their preparation. For instance, the auditor needs to know if figures are complete and accurate and reflect what they should reflect, if income and expenses are recorded in the proper periods and if the legal position is reflected adequately.

The auditor should focus on any misstatement6 whether it is intentional or unintentional.7 The management is responsible for the reliability of financial information. If the management is not prepared to take the responsibility it may be hard to complete the audit. In such situations the auditor should seek his own evidence by means of independent audit procedures.

Although the financial statements are the ultimate objectives of an audit, normally such audits cannot be completed without a proper study and evaluation of the accounting system and assessment of the internal accounting controls.

Defining the audit strategy the auditor has to decide whether to rely on internal controls or to resort to substantive testing applying analytical review procedures, such as tests in totals, comparison with budgets or even statistical analysis of figures.

In the planning stage as well as during the performance of audit procedures and, finally, in forming conclusions, "materiality" and "audit risk" are critical8 elements in the auditor's judgement. "Materiality"9 refers to the magnitude10 or nature of a misstatement (including an omission) of financial information.

"Audit risk" (including three different components - inherent risk, control risk, detection risk) is the risk that an auditor may give an inappropriate opinion on financial information that is materially misstated.

The natural finalization of the audit process is the auditor's report, reflecting the auditor's opinion on the financial statements. Unfortunately, audits do not always end up in an approval of the financial statements.

Any deviation from the unqualified opinion should be explained in the auditor's report, including the uncertainty or the disagreement that caused the auditor to qualify his opinion11.

In order to protect the public interests and the profession's integrity12 an individual must be sufficiently educated and adequately trained before being certified13 to act as an auditor.

Below you will find a sample of an auditor's opinion:

To the Shareholders of... Ltd.:

We have audited the accompanying14 balance sheet of ... Ltd. as of 31 December ... and the related statement of income15 for the year then ended.

Our audit was conducted16 in accordance with generally accepted auditing standards17 and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances to establish whether the balance sheet and related statement complied with Ukrainian regulations18 and were in agreement19 with the underlying20 accounting records.

In our opinion, the balance sheet and related statement of income of... Ltd. referred to above have been prepared in compliance21 with the relevant Ukrainian regulations and are in agreement with the underlying accounting records.

Odessa,   24 March...

Words you need:

build up1    накопичувати

supervisory board2   спостережлива рада

audit process3    процес проведення аудиторської перевірки

manifold4    багатосторонній

audited company5   компанія, яку перевіряють

should focus on any misstatement6  необхідно звертати увагу на будь-які перекручування не дивлячись на те

whether it is intentional or unintentional7 чи є  воно навмисним чи ні

critical8     який є вирішальним

materiality9     істотність  

magnitude10    розмір

that caused the auditor to qualify his opinion11  які змусили аудитора внести застереження в свій висновок

integrity12    професійна чесність

certify13     видавати посвідчення

accompanying14    який прикладається

the related statement of income15  відповідний звіт про прибутки та збитки

to conduct16an audit   проводити аудиторську перевірку

generally accepted auditing standards17 загальноприйняті стандарти аудиту

to comply with regulations18   відповідати правилам

in agreement19 with   у відповідності з

underlying20    який лежить у основі

in compliance21 with   у відповідності з

Exercises

1. Answer the questions.

1. What is auditing?

2. What audits are practiced nowadays?

3. What does the auditor's opinion help establish?

4. How is an audit planned?

5. What do auditors normally start with?

6. What do auditors direct their attention to when they analyse financial statements?

7. What responsibilities do managers (directors) undertake with regard to the audit?

8. What are the responsibilities of auditors?

9.  Dо auditors study and evaluate the accounting system and the internal accounting control during the  audit? Do they rely on internal controls?

10 What are the most critical elements in the auditor's judgement?

11.  Do all audits end up in the approval of the financial statements?
 Why do auditors sometimes disclaim or qualify their opinions?

12.  Who has the right to act as an auditor?

13. What audit was conducted by the auditors whose opinion is stated in the sample?

 What were the auditors responsible for?

14. What opinion was expressed?

2. Find in the text English equivalents for the following Ukrainian phrases:

Перевіряти облікову документацію; давати висновок у відношенні точності та вірогідності фінансового звіту; аудит фінансової звітності; ревізія вірності начислення прибуткового податку; аудит оптимального використання грошових засобів; аудит заходів з охорони навколишнього середовища; ревізія правильності дій правління; перевірка ефективності фінансової діяльності правління; облікові працівники накопичили значний досвід у..; аудит рахунків є інструментом захисту інтересів користувачів фінансової звітності; висновок аудитора робить фінансову звітність надійною; спостережним радам та відомствам інколи потрібні глибокі аудиторські звіти, які є, як правило, конфіденційними; аудитори не контролюють, вони дають висновок у відношенні точності та вірогідності фінансового звіту;  ділове середовище, у якому працює компанія, яку перевіряють; аудитори звертають свою увагу на правильність припущень правління; навмисне або ненавмисне перекручування даних; брати на себе відповідальність за; процедура проведення аудиторської перевірки; оцінка системи внутрішнього контролю; удаватися до незалежних перевірок; аналіз фінансово-господарської діяльності.

3. Think of the nouns that are most often used with the following verbs:

To complete, to perform, to misstate, to omit, to approve, to audit, to conduct, to examine, to prepare, to carry out, to obtain.

4. Think of the verbs that are most often used with:

Opinion, audit, auditor’s report, internal controls, substantive testing, payments, evidence.

5. Match the verbs from (a) with the nouns from (b) below:

a)To share    b) certificate      

To take     assumption

To seek     responsibility

To submit    faults

To give     services

To make     advice

To obtain    point of view

To find     financial statements

To submit    evidence

6. Make up sentences from two parts.

1. Auditing is a process in which an independent accountant-auditor examines

2. The accountancy profession has built up

3. Accounts audits were established as an instrument

4. It should be stressed that auditors do not monitor

5. The auditor normally starts with a study of

6. Then he should direct his attention

7. The auditor should focus on

8. The natural finalization of the audit process is

9. In order to protect the public interests and the profession's integrity

  1.  an individual must be sufficiently educated and adequately trained before being certified to act as an auditor.
  2.  a firm's accounting records and financial statements and offers an opinion on their accuracy and reliability.
  3.  any misstatement whether it is intentional or unintentional.
  4.  significant amount of expertise in performing financial statements audits.
  5.  the business environment the audited company is working in and performs a preliminary analytical review.
  6.  they offer an opinion, and the audit process and audit procedures are complicated and manifold
  7.  to protect third parties, the users of accounts, since the auditor's opinion helps establish credibility of financial statements.
  8.  to the financial statements.
  9.  is the auditor's report, reflecting the auditor's opinion on the financial statements.

7. Complete the sentences with the following words: auditing, types of audits, accounts audits, management, auditors, auditor’s report, “audit risk”, the audit strategy. 

  1.  Defining the ……the auditor has to decide whether to rely on internal controls or to resort to substantive testing applying analytical review procedures.
    1.  …is a process in which an independent accountant-auditor examines a firm's accounting records and financial statements and offers an opinion on their accuracy and reliability.
    2.  The natural finalization of the audit process is the….., reflecting the auditor's opinion on the financial statements.
    3.  ….. (including three different components - inherent risk, control risk, detection risk) is the risk that an auditor may give an inappropriate opinion on financial information that is materially misstated.
    4.  There are…….., for example, financial statements audits, income tax audits, "value for money" audits, environmental audits, administrative audits, financial management audits, etc.
    5.  ……is responsible for the reliability of financial information.
    6.  …..were established as an instrument to protect third parties, the users of accounts, since the auditor's opinion helps establish credibility of financial statements.
    7.  ….are usually independent certified accountants who review the financial records of a company.

8. Find and read sentences explaining the title of the text.

9. Find in the text sentences expressing such ideas.

  1.  Auditors review the financial records of a company.
  2.  Accounts audits are the “friend” of the users of accounts.
  3.  Indepth auditing report is information which is necessary for supervisory boards, employee representatives, and government agencies.
  4.  There are different types of audits.
  5.  The auditor’s task is to offer an opinion.
  6.  The auditors have to study the business environment of the audited company and the financial statements.
  7.  The completing of audit depends on the management.
  8.  For the completing of audit it is necessary to study and evaluate the accounting system and assessment of the internal accounting control.
  9.  The critical elements in the auditor’s judgement are “materiality” and “audit risk”.

10.The auditor’s report is the last stage of the auditing.

10. Checking facts and ideas using such expressions: Exactly; Right you are; I agree with you; That goes without saying; There’s no denying it; No doubt whatever; I can’t agree with you; I’m against it; You are mistaken; Hardly.

  1.  Auditor’s report is the review of financial records and the report to the management on the current state of the company’s fiscal affairs.
  2.  The auditor’s opinion can help people to examine the work of the company.
  3.  The indepth audit report is open for everybody.
  4.  The task of auditor is to monitor the accounting records and the financial statements.
  5.  The auditor’s attention is directed towards the financial statements’ elements.
  6.  When management is not prepared to take the responsibility the auditor should seek his own evidence by means of independent audit procedures.
  7.  "Materiality" refers to the magnitude or nature of a misstatement (including an omission) of financial information.

8."Audit risk" (including three different components - inherent risk, control risk, detection risk) is the risk that an auditor may give an inappropriate opinion on financial information that is materially misstated.

9. Any accountant can be an auditor without any difficulties.

11. Find the definitions to the next terms: audit, auditor, “audit risk”, auditor’s report.

  1.  ….is a professionally trained person who examines the accounts of an organization.
  2.  ….is a document recording the auditor’s opinion on the financial statements.
  3.  ….is a detailed inspection of the accounts of an organization conducted usually once a year, by a professionally trained person to confirm that they are true and honest.
  4.  …. is the risk that an auditor may give an inappropriate opinion on financial information that is materially misstated.

12. Divide the text into logical group and give them titles.

13. Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of… .

14. Read the text.

a) Describe the two main functions of auditing. Discuss public accountants (auditors) and government auditors perform these functions. Explain the importance of internal auditing.

a) Audit is an examination of the records and reports of an enterprise by accounting specialists other than those responsible for their preparation. Public auditing by independent accountants has acquired professional status and become increasingly common with the rise of large business units and the separation of ownership from control. The public accountant performs tests to determine whether the management's statements were prepared in accordance with acceptable accounting principles and fairly present the firm's financial position and operating results.   Such independent evaluations of management   reports are of interest to actual and prospective shareholders, bankers, suppliers, lessors, and government agencies. Generally speaking, auditing has two functions: to reveal undesirable practices and, as far as possible, to prevent their recurring in the future. A relatively new type of auditing is internal auditing. It is designed to evaluate the effectiveness of a business's accounting system.   Perhaps   the   most   familiar   type of auditing is the administrative audit, or pre-audit, in which individual vouchers, invoices or other documents are investigated for accuracy and proper authorization before they are paid or entered in the books.

In English-speaking countries, public auditors are usually certified, and high standards of professional qualification are encouraged.

Most countries have specific agencies or departments charged with the auditing of their public accounts.

Taxpayers in all countries are interested in the sound management of the collected revenue, they also want to know whether or not the executive branch of government is complying with the law, especially in the area of public finance.

Government auditors are working for sound, economical and efficient financial management, addressing the key problems in the field of public sector auditing, like strengthening the institutions that oversee financial management, changes in the scope and methodology of government auditing, ability to conduct performance audits in public enterprises, strengthening internal auditing in spending units, ex-post external audits of government activities, budget efficiency problems, performance of expenditure programmes.

The advantages accruing from an audit are obvious, taking into account the complexity of present-day commerce and business.


15.  Supply the prepositions where necessary.

a) Say what the auditors checked during the audit in accordance with the instructions given to them.

Auditors' Report

We have examined the books, accounts and vouchers relating .. the six months ended 30th September ... (year) which were presented ... us. We have made extensive enquiries ... the system of internal check ... force and are satisfied that it is working efficiently. Particular attention was paid to the methods in force for the authorization of: accounts for payment and the handling ... cash. The cash balances .. the 30th September ... (year) were counted and found to be in accordance ... the cashier's books. All bank payments have been verified with the bank statements and certificates of the balances on the accounts obtained ... the bankers.

We have checked all cash and bank payments ... the receipts and have to report that a number of small payments are unsupported ... vouchers. It has been possible, however, to obtain other evidence to show that these disbursements were properly made. The cash books have been cast and all postings ... the various ledgers checked ... detail.

All invoices ... respect of goods purchased and expenses incurred have been examined with the appropriate analysis of books, the totals of which have been checked. Several minor errors were detected which have now been rectified. The postings to the Creditors' Ledgers have been test-checked, being far too numerous to do in detail. The balances ... the individual Creditors' accounts have been compared with special audit statements obtained from them and found to be ... order. Our instructions did not require us to examine the Sales Ledgers and Day Books: we therefore report that in such work as we have performed we found no evidence of, or opportunity ... defalcation or fraud.

Words you may need:

voucher n     виправдовувальний грошовий документ

authorization of accounts for payment  дозвіл на проведення виплат з рахунків

handling of cash     використовування готівки

cash balance     залишок касової готівки

cashier's book     журнал касових операцій

bank statement     виписка з рахунку

receipt n      квитанція

to obtain evidence    получити докази

disbursements п p   виплати

cash book     касова книга, журнал касових операцій

cast v      підраховувати, підводити висновки

posting v     проводка

ledger n      бухгалтерська книга, бухгалтерський регистр

expenses incurred     витрати, які були понесені

detect v      виявляти

rectify v     виправляти

Creditors' Ledger    книга кредиторів

test-check v     перевіряти за допомогою тестів

audit statement     аудиторський звіт

Sales Ledger     книга обліку продаж

Day Book     книга операцій рабочого дня

defalcation n     присвоєння чужих грошей

fraud  n      шахрайство, обман

16. Prepare a short talk on the following:

  1.  How do auditors conduct audit?
  2.  What is the aim of audit?
  3.  Is it difficult to become a practicing auditor? Are professional qualifications high?
  4.  If you have a job with an auditing firm what sort of personal characteristics do you think are the most important for auditors?

Література

  1.  Любимцева С.Н. Коренева В.Н. Курс англійської мови для фінансистів Москва «ГИС» 2001
    1.  Данилова З.В. Байбакова І.М. Ділова англійська мова. Основи економіки та бізнесу. Навчальний посібник англійською мовою. Тернопіль СМП «Астон»
      1.  Данилова З.В. Князівська І.Б. Ділова англійська мова. Основи бухгалтерського обліку. Фінанси. Навчальний посібник англійською мовою. Тернопіль СМП «Астон»
      2.  Назарова Т.В. Словник загальновживаної термінології англійської мови ділового спілкування Москва «Астрель» 2002
      3.  Бізнес-словник. Економіка. Фінанси. Банки. Інвестиції. Кредити. Англо-український Київ «Школа» 2002
      4.  Глушенкова Є.В. Комарова Є.Н. Англійська мова для студентів економічних спеціальностей Москва «Астрель» 2003
      5.  Шевельова С.А.  English on economics ЮНИТИ 1998
      6.  Шевельова С.А.  Стогов В.Є. Основи економіки та бізнесу ЮНИТИ 2001
      7.  Верба Г.В. Довідник з граматики англійської мови Київ «Освіта» 1994
      8.  Кнодель Л.В. Англійський для всіх. Особливий авторський курс  Лексико-граматичний посібник для глибокого вивчення англ. Мови Київ «Факт»1998

Федорова Л.М. Діловий англійський: 30 уроків для студентів-економістів Москва «Гардарики» 2004

PAGE  121


 

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