Unit 5. Finance

Write a letter of advertising products and services of a firm.

I. Remember the words:

- internal funds - внутрішні борги

- external funds - зовнішні борги

- to meet one’s expenses - покривати чиїсь витрати

- depreciation - знецінення

- to cover the cost of smth. – покрити вартість чого-небудь

- short-terms loans - короткострокова позика

- long-term loans - довгострокова позика

- the principal - запозичена сума

- common stock - спільні акції

- to have voting rights - мати право голосу

- security exchange - фондова біржа

- default - невиплата, невиконання договору

- mutual funds - спільні фонди

- balance sheet - балансовий звіт

- income statement - звіт про прибуток

- assets - актив (балансу)

- liabilities - пасив (балансу), борги

- net worth - вартість майна за винятком зобов’язань

II. Read and translate the text:

Most of the money used by business comes from the sale of its products and services. Since these funds come from within the firm they are described as internal funds. The rest must come from outside or external funds.

As a firm sells its products or services, it receives money, which it uses to meet its expenses.

Business loans are generally classified as either short-term or long-term loans. Short-term loans are used to finance the everyday costs of doing business, such as payrolls, raw materials. Long-term loans are more likely to be used to purchase equipment, buildings and other high cost items.

A security exchange is a market where brokers meet to buy and sell stocks and bonds for their customers. The largest of the securities exchanges are the New York Stock Exchange and the American Stock Exchange.

There is some risk of default on the bonds of even the strongest corporations. For this reason many people invest in mutual funds. Mutual funds are corporations that sell stock and use the proceeds to invest or speculate in the security markets.

III. Answer the questions:

1. Where does most of the money used by business come from?

2. What do we call internal funds?

3. What does depreciation represent?

4. How do you understand the term “external funds”?

5. What is the reason for investing in mutual funds?

IV. Fill in the blanks with appropriate words:

1. … is the difference between assets and liabilities.

2. Similarly, firms need … to begin operation, to meet their day-to-day expenses and to expand.

3. … charge purchases to their accounts for payment at a later date.

4. … is money that will be used for a year or more.

5. Many large corporations raise long-term capital through the sale of their ….

6. Corporations sell stocks and bonds as a way of raising ….

7. … is a market where brokers meet to buy and sell stocks and bonds for their customers.

8. Those who buy stocks to share in the profits and growth of a corporation over a long period of time are described as ….

“investors”, capital, money, net worth, customers, bonds, a security exchange, long-term financing

V. Translate into English:

1. Найбільша кількість грошей, що використовується бізнесом, надходить з продажу продукції та різних послуг.

2. Оскільки фірма продає товари або послуги, вона одержує гроші та використовує їх з метою покриття своїх витрат.

3. Бізнесові позики зазвичай класифікуються як довгострокові та короткострокові.

4. Короткострокові позики використовуються для фінансування повсякденних вартостей фірми, таких як платіжні відомості, сировина, товари.

5. Фондова біржа – це ринок, де зустрічаються посередники для купівлі і продажу акцій своїм клієнтам.

VI. Make up your own dialogue using the following expressions:

- to meet one’s expenses;

- to cover the cost of something;

- security exchange;

- overproduction;

- long-term loans;

- to have voting rights;

- to be in demand.

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