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Why Finance?
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One of the primary considerations when going into business is money. Without sufficient funds a company cannot begin operations. The money needed to start and continue operating a business is known as capital. A new business needs capital not only for ongoing expenses but also for purchasing necessary assets. These assets - inventories, equipment, buildings, and property - represent an investment of capital in the new business.
How this new company obtains and uses money will, in large measure, determine its success. The process of managing this acquired capital is known as financial management. In general, finance is securing and utilizing capital to start up, operate, and expand a company.
To start up or begin business, a company needs funds to purchase essential assets, support research and development, and buy materials for production. Capital is also needed for salaries, credit extension to customers, advertising, insurance, and many other day-to-day operations. In addition, financing is essential for growth and expansion of a company. Because of competition in the market, capital needs to be invested in developing new product lines and production techniques and in acquiring assets for future expansion.
In financing business operations and expansion, a business uses both short-term and long-term capital. A company, much like an individual, utilizes short-term capital to pay for items that last a relatively short period of time. An individual uses credit cards or charge accounts for items such as clothing or food, while a company seeks short-term financing for salaries and office expenses. On the other hand, an individual uses long-term capital such as a bank loan to pay for a home or car - goods that will last a long time. Similarly, a company seeks, long-term financing to pay for new assets that are expected to last many years.
When a company obtains capital from external sources, the financing can be either on a short-term or a long-term arrangement. Generally, short-term financing must be repaid in less than one year, while long-term financing can be repaid over a longer period of time.
Finance involves the securing of funds for all phases of business operations. In obtaining and using this capital, the decisions made by managers affect the overall financial success of a company.
Переведите на русский язык подчеркнутые выражения.
Исправьте неверные утверждения.
1. Long-term financing is used by a company to purchase new equipment and to construct additional facilities.
2. A new business only needs capital to meet day-to-day expenses.
3. In financing, business operation, a company relies almost entirely on short — term financing.
4. Long - term and short-term financing may be acquired from outside sources.
5. How well a company manages its finances affects the overall success of the business venture.
Переведите на русский язык:
- company, company management, company financial management, company financial management expansion, rapid company financial management expansion;
- production, production development, production techniques, production techniques development;
- product, product line, new product line, new product line development, new product line development programme;
- sources, external sources, external sources research, external sources research programme, external sources research programme development.
Составьте словосочетания:
| a) ongoing credit short-term charge bank business financial essential | b) operations accounts extension expences success capital loans asset |
Text 2
The Balance Sheet
Financial statements are the final product of the accounting process. They provide information on the financial condition of a company. The balance sheet, one type of financial statement, provides a summary of what a company owns and what it owes on one particular day.
Assets represent everything of value that is owned by a business, such as property, equipment and accounts receivable. On the other hand, liabilities are the debts owed by a company - for example, to suppliers and banks. If liabilities are subtracted from assets (assets - liabilities), the amount remaining is the owners' share of a business. This is known as owners' or stockholders' equity.
One key to understanding the accounting transactions of a business is to understand the relationship of its assets, liabilities, and owners' equity. This is often represented by the fundamental accounting equation: assets equal liabilities plus owners' equity.
Assets = Liabilities + Owners' Equity
These three factors are expressed in monetary terms and therefore are limited to items that can be given a monetary value. The accounting equation always remains in balance; in other words, one side must equal the other.
The balance sheet expands the accounting equation by providing more information about the assets, liabilities, and owners' equity of a company at a specific time (for example, on December 31, 1999). It is made up of two parts. The first part lists the company assets, and the second part details liabilities and owners' equity. Assets are divided into current and fixed assets. Cash, accounts receivable, and inventories are all current assets. Property, buildings, and equipment make up the fixed assets of a company. The liabilities section of the balance sheet is often divided into current liabilities (such as accounts payable and income taxes payable) and long-term liabilities (such as bonds and long-term notes).
The balance sheet provides a financial picture of a company on a particular date, and for this reason it is useful in two important areas. Internally, the balance sheet provides managers with financial information for company decision-making. Externally, it gives potential investors data for evaluation of the company's financial position.
Переведите на русский язык подчеркнутые выражения.
Переведите на английский язык.
Баланс фирмы представляет собой документ, отражающий в стоимостном выражении ее активы и источники их формирования на определенную дату, обычно на конец квартала или года. Он составляется на основе данных бухгалтерского учета и разделяется на две равновеликие группировки показателей - актив и пассив. В активе показатели группируются по составу и размещению средств, в пассиве - по источникам их формирования. В годовых отчетах баланс приводится на начало и конец финансового года.
Баланс отражает взаимосвязь активов фирмы и источников их формирования. Он позволяет проводить анализ зависимости фирмы от внешних источников финансирования, структуры собственного и привлеченного капитала, а также его использования в хозяйственном обороте.
В практике фирм встречаются различные формы составления баланса. Наиболее распространенной из них является форма двусторонней таблицы, в левой части которой, называемой активом, указываются состав и размещение средств, которыми располагает фирма, в правой, называемой пассивом, -источники финансирования ее деятельности.
Text 3