Corporate finance

Corporations need financing for the purchase of assets and the payment of expenses. The corporations can issue shares in exchange for money or property. Sometimes it is called as equity funding. The holders of the shares form the ownership of the company. Each share is represented by a stock certificate, which is negotiable. It means that one can buy and sell it. The value of a share is determined by the net assets divided by the total number of shares outstanding. The value of the share also depends on the success of the company. The greater the success, the more value the shares have.

A corporation can also get capital by borrowing. It is called debt funding. If a corporation borrows money, they give notes or bonds. They are also negotiable. But the interest has to be paid out whether business is profitable or not.

When running the corporation, management must consider both the outflow and inflow of capital. The outflow is formed by the purchase of inventory and supplies, payment of salaries. The inflow is formed by the sale of goods and services. In the long run the inflow must be greater than the outflow. It results in a profit:. In addition, a company must deduct its costs, expenses, losses on bad debts, interest on borrowed capital and other items. It helps to determine if the financial management has been profitable. The amount of risk involved is also an important factor. It determines the fund raising and it shows if a particular corporation is a good investment.

Vocabulary

purchase покупка, купля, приобретение

payment of expenses оплата расходов

property собственность, имущество

equity funding акционерный (долевой) способ образования денежного фонда предприятия

debt funding образование денежного фонда предприятия с помощью займа

holders of the shares держатели акций

stock certificate сертификат акции

negotiable оборотный, могущий быть переуступленным, купленным, проданным

net assets стоимость имущества за вычетом обязательств

bond долговое обязательство, облигация

note (здесь) долговая расписка

interest доля, фиксированный процент

to pay out выплачивать

to run a corporation руководить корпорацией

inflow приток (здесь денег)

outflow утечка (здесь денег)

inventory материально-производственные запасы, инвентарь

supplies ресурсы

debt долг

goods товары

I. Выберите предложения соответствующее содержанию текста.

a) A corporation can get capital by borrowing;

b) A corporation can get capital by selling its products;

c) A corporation can get capital by issuing shares.

II. Выберите вариант начала предложения в соответствии с текстом.

… funding is a financing formed by borrowing.

a) equity

b) bond

c) debt

III. Согласитесь или не согласитесь с утверждениями. Неверные утверждения сделайте верными.

a) Management must think only about the outflow;

b) The value of a share is determined by the net assets added to the total number of shares outstanding;

c) In a long run the inflow must be greater than the outflow.

IV. Выберите правильную форму глагола.

They … much money and they … to pay a big interest.

a) have borrowed, had;

b) has borrowed, has;

c) have borrowed, have.

V. Выберите английский эквивалент следующих слов.

1) exchange 2) expense

a) изменение; a) дорогой;

b) обмен; b) расход;

c) оборот; c) приход;

3) to run 4) capital

a) действовать; a) деньги;

b) управлять; b) сумма;

с) направлять; c) капитал.

VI. Выберите необходимое слово и вставьте его в предложение.

The holders of the shares form the … of the company.

a) real estate;

b) property;

c) ownership.

VII. Выберите правильный вариант перевода.

When running the corporation, management must consider both the outflow and the inflow.

a) Думая о корпорации, руководство должно обратить внимание как на прибыль, так и на отток активов;

b) Работая на предприятии, руководство рассматривает и решает проблемы денежных средств;

c) Управляя корпорацией, руководство должно думать как о притоке, так и об оттоке денежных средств.

8. Заполните пропуски предлогами, где это необходимо.

The outflow is formed … the purchase … inventory … supplies, payment … salaries.

a) of, by, and, of;

b) by, of, and, of;

c) of, of, by, and.