Why Organizations Need Funds

VIII. Fill in the blanks with prepositions.

VI. Choose the explanation for each of these words and phrases.

V. Match these words as they occur in the text. Translate the phrases.

1. raw materials 2. long-term (capital) 3. repayment 4. finished 5. accounts 6. dissolution of the 7. unpaid 8. credit 9. incentive 10. amounts 11. grave 12. payment

a) products b) terms c) buyers d) inventory e) policy f) histories g) receivable h) expenditures i) consequences j)firm k) due 1) bills

1. short-term (operating) expenditures 2. inventory 3. accounts payable 4. long-term (capital) expenditures 5. raw materials inventory 6. accounts receivable 7. finished-goods inventory 8. work-in-process inventory

a) unpaid bills to suppliers b) the supplies of farm and natural products purchased by a firm for use in its production process c) expenditures incurred regularly in a firm's everyday business activities d) amounts due from customers who have purchased goods on credit e) expenditures on fixed assets f) materials and goods that are held by a company but will be sold within one year g) the portion of a firm's inventory consisting of goods part-way through the production process h) the portion of a firm's inventory consisting of completed goods ready for sale

VII. Find words and phrases in the text which mean:

1. to refuse to pay until some point of time

2. a person or firm supplying goods, materials, etc

3. someone who buys and sells a particular product

4. the conditions under which you agree to pay for something

5. a person, team, company etc. that is competing with another

6. the rules governing the extention of credit to customers

7. assets that have long-term use or value, such as land, buildings and equipment

8. use pressure or influence to get or do something

9. very serious and worrying

10. extremely large

11. reduction in the cost of goods or services

12. something that happens as a result of a particular action or set of conditions.

Organization require funds for dozen.... reasons. Some funds must be held.... the form of cash to meet day-to-day requirements. If the firm permits customers to make credit purchases, funds must be available to prevent cash deficiencies.... the time between the sale and the receipt of payment.

Inventory used in producing goods and services or stocked.... a retail store cost money. This money will not be recovered until the finished output is sold or the raw materials are converted.... finished products and sold. Other funds requirements include making interest payments.... loans; paying dividends to stockholders, and purchasing land, facilities, and equipment. The financial plan identifies the firm's specific cash needs and when they will be needed. Comparing these needs.... expected cash inflows from product sales, payments made by credit purchasers, and other sources will help the financial manager determine precisely what additional funds must be obtained.... any given time. If inflows exceed cash needs, the financial manager will invest the surplus to earn interest. On the other hand, if inflows do not meet cash needs, the financial manager will seek additional sources.... funds. The following chart illustrates this process.

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