Voc grammar SS Revision 2015

Financial English B2 Grammar & Lexis Revision I SEMESTER Unit 1 LEXIS Ex. 1 1) A …… is when a company gains control of another one by buying its stocks. a) take off

b) takeover

c) acquisition

d) take over

2) A ..... is a certificate representing one unit of a company. a) income b) credit c) share d) bond 3) ...... banks receive and hold customers’ deposits in current and savings accounts, pay money according to customers’ instructions, lend money to individuals and small businesses. a) Investment b) Central c) Private d) Commercial Ex. 1 1. B / takeover 2. C / share 3. D / Commercial Ex. 2 1) Investment banks help companies raise c..... by issue stocks and bonds. 2) P..... means made it illegal to do something. 3) C..... banks pass checques and other payments (credit card payments, direct debits, etc.) through the banking system. Ex. 2 1) capital 2) prohibited 3) Clearing Ex. 3 1) The ....... (acquisition) company often offers a premium on the market price of the target company's shares in order to entice shareholders to sell. 2) Our company ..... (amalgamation) another local firm yesterday. 3) So most industrialized countries ...... (regulation) their system. People were delighted that rules and restrictions were abolished. Answers: 1) acquiring 2) amalgamated with 3) deregulated 1

Revision of grammar: Ex. 1 If you have a credit card, you .... pay cash for purchases. a) must b) don’t need c) mustn’t d) needn’t Answer: needn’t Ex. 2 Banks .... (allow) charge less than minimum interest rate. Answer: aren’t allowed to Ex. 3 1. Investment companies ....... (must) cheat their customers. Answer: mustn't 2. Commercial banks ..... (allow) borrow on their own initiative money from the Central bank. Answer: are allowed to I SEMESTER Unit 1 List of financial terms: bond – an interest-paying debt certificate issued by governments or companies to raise money deposit – to place money in a bank; an amount of money in a bank account mortgage – a loan to buy property or real estate share or stock – a certificate representing one unit of ownership of a company takeover (acquisition) – when one company acquires or buys another one capital – the money invested in a business merger – when two or more companies join together pension – money paid to a retired employee shareholder – one of the part-owners of a company, who has bought some of its shares central bank – a bank that will lend money to financial institutions in difficulty if no other bank will monetary policy – decisions concerning the money supply, exchanges rates, and the level of interest rates reserve – funds which banks have to hold to allow depositors to withdraw money interest – the price paid for borrowing money, paid to the lenders money supply – the total amount of money in circulation in an economy social security or welfare – a social insurance programme providing financial protection against unemployment, disability, poverty, old age, etc. building society – a British financial institution that receives customers’ deposits and lends 2

mortgages to buy property clearing bank – a bank that passes payments through the banking system commercial bank – a bank that holds customers’ deposits and lends money to individuals and small businesses investment bank (merchant bank) – a bank that advises companies and raises money for them, and trades financial products hedge fund – a private investment fund that tries to get higher than average returns insurance company – a bank that provides pensions and offers life insurance Islamic banking – a religiously-motivated system of banking based on profit and loss sharing that does not involve interest microfinance bank – a bank what makes very small loans (microcredits) to poor people in developing countries to help them set up in business mutual fund or investment fund – a bank what gives financial advice to large companies, raises capital for them by issuing stocks or shares and bonds, organizes mergers and takeovers, etc. private bank – a bank that manages the assets of wealthy individuals retail bank – a bank that makes loans and receives deposits conglomerates – groups of companies that have joined together depositors – people who place money in bank accounts deregulated – abolished or ended rules and restrictions fines – sums of money paid as penalties for breaking the law prohibited – made it illegal to do something regulation – control of something by rules or laws repealed – cancelled or ended (a law) underwriting – guaranteeing to buy a company’s newly issued stocks if no one else does I SEMESTER Unit 3 BRAK!! I SEMESTER Unit 5 Revision of grammar: 1. 1 sentence with a gap and A, B, C, D multiple answers (only 1 is correct) * You should't .... drunk all the milk a. have

b. had

c. has

d. been

2. 1 sentence with a gap, in brackets an infinitive is given to be transformed in a suitable tense form. * He should ....(tell) his parents the truth when they asked him. have told 3. Two sentences to be transformed with the help of a suitable linking word, or grammar construction. * It would be a good idea to avoid eating sweets. You ..........should avoid............... eating sweets. SHOULD 3

* I wouldn't listen to his lies if I were you I'd ......advise you not to......... listen his lies. ADVICE

revision of vocabulary: 1. 3 sentences with gaps and A, B, C, D multiple answers (only 1 is correct). *It's an analysis of the credit risk associated with a financial instrument or entity. a)credit limit b)credit line c)credit rating d)overhead costs * the debt obligations issued by public entities that use the loans to fund public projects such as the construction of schools, hospitals, and highways a) municipal bonds b)treasury bonds c)treasury bills d) shares *In a general business context, the difference between a product's (or service's) selling price and the cost of production a)spread b)bid c)offer d)margin 2. 3 sentences with gaps and the first letter of a financial term given. * The market in which existing securities are traded among investors through an intermediary is called s............. market. Secondary * C............... is the interest paid on a bond. Coupon *If you own more than one security, you have an investment p................ . Portfolio 3. 3 sentences with gaps, in brackets a base form is given of a financial term to be transformed (word formation).

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* When a ................. (broke) firm sells securities it owns, it is said to be acting as a principal in that transaction. Brokerage *A security is a .................. (trade) financial instrument like a bond or a share of stock. It's a claim on the future issuer's future income or assets. Treadable * A bond or other loan that must be repaid comes due on its .............(mature) date. Maturity I SEMESTER Unit 5 List of financial terms: Corporate bonds- an official document from a company to show that you have given them money that they will pay back with a certain amount of extra money Collateral- something of value that secures a loan or other credit Credit rating- an evaluation of a borrower’s ability to pay interest and pay back a loan in the future Maturity- the date on which a loan must be repaid , or the length of time until this date Portfolio- all the securities and financial assets held by a financial institution or an individual Cost of founds- the price that a financial institution must pay for the use of money EBIT- the abbreviation for a company’s earnings before interest and taxes Operating cash flow- the money generated from a business’s normal activities Credit limit- the maximum amount that a bank will lend to a customer Margin- the difference between the interest rate a lender pays and the rate it charges its borrowers Overhead cost- the expenses of operating a business that are not directly related to individual products or services (e.g. electricity) Money market- the market in which companies, financial institutions, and government agencies can borrow and invest in the short term Debt financing- borrowing money by way of loans, bonds etc. Liquidity- the degree to which assets can easily be sold, with a minimum loss of value; cash and other liquid assets in excess of current liabilities Cash flow- the movement of money in and out of an organization Commercial paper- a short-term , unsecured loan issued by blue-chip companies Unsecured- describes a loan not guaranteed by assets or any form of collateral

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Discount- a price below the usual or advertised price Face value/nominal value/par value- the price written on a security (which never changes) Line of credit- an agreement to provide loans up to an approved amount Certificates of deposit- a short- or medium—term, fixed-interest time deposit issued by banks to large depositors Time deposits- money placed in a deposit account for which the bank must be notified in advance of withdrawals Repurchase agreement/repos- an agreement to sell securities (in order to get liquidity) and to buy them back at a slightly higher price at a later date Municipal bonds- US term for a bond issued by a city or local government Deficit- the result of spending that exceeds revenue Treasury bills/T-bills- a short-term debt obligation issued by a national government Redeem- to repay the principal of a loan Treasury bonds- a long-term debt obligation issued by a national government Money supply- a total amount of money available in an economy at a particular time Treasury stock- US term for stock that has been repurchased by a company Gilt-edged stock- British term for government bonds Corporate borrower- a company borrowing money from a commercial bank Underwrite- to take on a risk; to guarantee to buy newly issued stocks Issuer- an organization raising money by offering securities for sale Bondholders- an investor who has bought bonds Default- to fail to repay interest payments or to repay the principal of a loan Equity financing- issuing (selling) stock o shares Tax deductible- describes a sum that can be subtracted from profits before tax is paid Secondary market- the market on which financial securities can be re-sold Brokerage company- a market-maker in stock and shares Bid price- the price at which a bank or market-maker will buy a security; an offer to buy Offer price- the price at which a trader will sell a security

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Spread- the difference between two prices (a buying price and a selling price) Below/above par- describes a bond with a market price lower/higher than its face value Yield- the rate of income a bondholder receives, taking into account the bond’s purchase price Convertible bonds- a fixed interest security which the holder may convert into the issuer’s common stock or ordinary shares Warrants- a security attached to a bond, giving the right to buy stocks in the future at a particular price Zero coupon bonds- a bond sold at a discount that pays no interest but is redeemed at par value Capital gain- the monetary gain obtained when an asset is sold for more than its original price High yield bonds- a bond that pays a high interest rate Junk bonds- a bond with a low credit rating that pays a high rate of interest II SEMESTER unit 7 ,,Accounting” Revision of vocabulary 3 sentences with gaps and A, B, C, D multiple answers (only 1 is correct). 1. Senior accountants interpret the transactions …………… by bookkeepers. A. managed B. audited C. recorded D. received

odp. C

2. Revenue for a period is shown even if some of the cash has not yet been received, according to the matching principle and the …………………… of accounting. A. double-entry bookkeeping B. accrual basis C. full-disclosure D. continuity assumption

odp. B

3. To calculate the cost of a product, it is necessary to consider the direct cost of the …………………. and the labour involved, as well as the overheads. A. fixed assets 7

B. intangible assets C. equity D. raw materials

odp. D

3 sentences with gaps and the first letter of a financial term given. 1. All the accounts in the g_ _ _ _ _ _ _ _ _ _ _ _ in which transactions can be posted are listed in a chart of accounts. odp. general ledger 2. An e_ _ _ _ _ _ _ audit is a review of financial statements and accounting records by accountants not belonging to the firm. odp. external 3. D_ _ _ _ _-_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ records transactions in two journals, for payments made and payments received. odp. double-entry bookkeeping 3 sentences with gaps, in brackets a base form is given of a financial term to be transformed (word formation). 1. ……………….(depreciate) means reducing the value of an asset over the length of its estimated useful life. odp. depreciation 2. The generally accepted definition of …………..(audit) is a review and an evaluation of financial records by a second set of ………….(account). odp. auditing; accountants 3. Companies whose stocks and shares are publicly traded must have their …………. (finance) statements ……………. (audit) by independent ………………(account). odp. financial; audited; accountants Revision of grammar 1 sentence with a gap and A, B, C, D multiple answers (only 1 is correct) 1. If the company ………………. a property, plant or equipment, value of their assets are increased by being debited. A. buy B. purchases C. sell D. traded away

odp. B

1 sentence with a gap, in brackets an infinitive is given to be transformed in a suitable tense 8

form. 1. Tax reporting involves ……………….(write off) most of the cost of capital investments during the first years of use, and less in later years. odp. writing off Two sentences to be transformed with the help of a suitable linking word, or grammar construction. 1. A debit will increase the balance of asset and expense accounts. 2. Software purchases by a company increases a debit. linking word: because of odp. The balance of asset and expense accounts will increase because of software purchases by a company.

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unit 7, AccountingSŁÓWKA - DEFINICJA ANG. absorption costing-the allocation of fixed and variable costs relating to production in the calculation of the price of goods or services accelerated depreciation-deducting most of the cost of a capital investment from taxable profit during the first years of use accountant-a person responsible for reporting financial results accounting-recording, reporting and analyzing a business’s financial transactions accounting clerk / bookkeeper / accounts clerk-person who records day-to-day sales and purchases and revenues received and payments made accounting entity assumption-a business is an accounting unit separate from its owners and their personal transactions accounting equation-on a balance sheet: assets= liabilities+ owner's equity accounting period-a twelve-month period that constitutes an organization's fiscal year accounting standards-rules for reporting accounting data in financial statements that are used in a financial statements accounts payable / creditors-amounts of money owed to suppliers for purchases made on credit accounts receivable / debtors-amounts of money owed by customers for goods or services sold on credit accrual basis-revenue is recognized ( or recorded) when it is earned and expenses are recognised when they are incurred accrued expenses-an expense that has occurred and been recorded on the balance sheet, but has not yet been paid accumulated depreciation-the total depreciation of a tangible asset up to specific date activity-based costing (ABC)-a way of allocating costs to products according to the different activities they require actual cost-the real amount paid or incurred, as opposed to as estimated or standard cost expenses to a different period adjusting entry-a bookkeeping entry made at the end of an accounting period to assign income or expenses to a different period allocated-matched with right type of transaction allow-agree amortization-depreciating or writing off an intangible asset over its projected life annual report-a document sent do shareholders giving details about a company's activities in the preceding year, and financial data organized into financial statement assets-something of value owned by a business and used to generate income assigned-allocated audit report-a report on a company's accounts written by external auditors auditing-reviewing and evaluating financial records auditor-a person who review financial statements and ledgers balance sheet-a statement showing company's financial position on a particular date, reporting assets, liabilities, and owner's equity book value / carrying value-the worth of an asset as recorded in a company's accounts (costs minus accumulated depreciation) bookkeeper-person who record transactions in purchase ledgers and sales ledgers bookkeeping-recording day-to-day sales and purchases, revenue and payments bookkeeping the ledger-recording day-to-day sales and purchases, revenue and payments

bottom line-the last line on an income statement or profit and loss account, showing net income or net profit(net loss) budgeting-planning of a future income and expenses bought ledger-an account book recording purchases made buy on instalment-buy something on the instalment plan capital investments-investments to raise a capital cash equivalents-a liquid asset that can quickly be turned into cash, such as short-term investments cash flow statement-a financial statement showing the cash generated and used by a company cash flow-the movement of money in and out of an organization charge against-financial situation when buyers will have to account for VAT and pay it on account of tax office chart of accounts-a list of all the accounts in a general ledger closing entries-an entry made to a temporary account at the end of the year setting the revenue and expense balances at zero commission-money paid to sales people and agents depending on the amount of goods sold competitors-a rival in business( the same goods) conservatismconsistency principle-the same methods (of inventory valuation, depreciation, etc.) must be used from one accounting period to the next consolidated statement-the combined financial statements of a parent company and its subsydiary/ies continuity assumption / going-concern assumption-the supposition that a business will continue indefinitely into the future ( so its assets are not for sale) cost accounting-the determination of the cost of goods and services including indirect expenses cost of goods sold (COGS)-the sum of the expenses involved in producing an selling goods credit-an arrangement to receive goods but pay later creditors-accounts payable, vendors current assets-assets that will be consumed or turned into cash in the ordinary course of business in the next year current liabilities-debts to be paid within one year of the date of the balance sheet debit-an amount entered on the left-hand side of an account , recording a payment made, to make a such entry deduct-to subtract an amount from a total deferred expenses-a cost that is paid in advance of being incurred(e.g. rent, insurance premiums) depreciations-reducing the recorded value of an asset over the length of its estimated useful life direct cost-the cost of raw materials and labour/labor involved in manufacturing distributor-a company that sells a manufacturer’s products to customers dividends-a share in the annual profits of a limited company paid to stockholders an shereholders double-entry bookkeeping-a system that records transactions in two journals, for payments made and payments received earn-to gain EBIT= earnings before interest and tax-earnings before interest and tax EBITDA= earnings before interest, tax and depreciation and amortization-earnings before interest, tax and depreciation and amortization

economic entity-another name for the accounting entity assumption expenditure-spending; money that spent expense accounts-accounts of expenses external audit-a review of financial statements and accounting records by accountants not belonging to the firm; verify that a company's published financial statements give a true and fair view of its profit, its assets and its liabilities fee-money paid to banks, lawyers, auditors, etc. for professional services financial accounting-the preparation of financial statements for shareholders, creditors, etc. financial report-financial statement financial statements-documents giving financial information that companies have to provide to stockholders financial year-fiscal year financing-funding financing activities-borrowing money, issuing an repaying debt, issuing stocks paying dividends, etc. fixed assets-buildings, land, plant, machinery, etc. Used in productive activities fixed costs-costs and overheads incurred by production that do not change with production volume full costing / absorption costing-the allocation of all fixed and variable costs relating to production in the calculation of the price of goods or services full-disclosure principle-financial reporting must include all significant information funds flow statement-a financial statement showing the cash generated and used by a company gain-a profit made on a transaction general ledger / nominal ledger-a book containing all the balance sheet accounts (assets, liabilities, and equity) and income statement accounts (revenues and expenses) generally accepted accounting principles (GAAP)-widely accepted accounting standards that accountants must adopt going-concern assumption-the supposition that a business will continue indefinitely into the future (so its assets are not for sale) goodwill-the value to a company of loyal customers, a good reputation, etc.; the amount by which the purchase price of a company exceeds the value of its net assets gross-includes net with VAT gross profit / gross margin-a business's total sales minus the cost of sales historical cost principle-accounts record the initial price paid for assets IFRS – International Financial Reporting Standardsincome-an alternative name for a company's earnings; all the money received by an individual during a given period income statement-US term for a profit and loss account: the financial statement showing net income or net profit (or possibly net loss) income tax-tax paid to the government on an individual's earnings and a company's net profit incur-to do something that makes the business liable for an expense indirect costs / indirect expenses-regular and necessary costs involved in operating a business indirect tax-a tax levied on the sale of goods and services input-something that is put into a system or process, and transformed into an output instalment-money paid in a few parts intangible assets-things of value that cannot be physically touched, such as brand names, copyrights, trademarks and patents interest cover / times interest earned-EBIT divided by interest expenses

interim financial statements-statements for shorter periods published during the fiscal year or financial year internal audit-a control of accounts by a company's own accountants, checking for completeness, accuracy, reliability, etc. inventory-a company's stock of products waiting to be sold, and raw materials and work-inprocess investing-buying securities, property, machines, etc., in order to produce income or profits investing activities-(on a cash flow statement) buying or selling property, plant and equipment job-order cost accounting-a system for determining the cost of a particular batch of products for a specific customer journal-a bookkeeping record of transactions in the order that they take place labour / labor-productive work, done for money, that provides goods and services ledger-a book of accounts liabilities-amounts of money owed that will have to be paid in the future long-term-in finance, refers to a period or maturity of more than one year (to) losemanagement accountants-use accounting data to make decisions about how the business should proceed management accounting-the provision of financial information for the use of a company's managers managerial accounting-the provision of financial information for the use of a company's managers manufacturing -making products from raw materials and components manufacturing overheads-fixed, indirect, factory-related costs in production manufacturing support costs / factory burden-fixed, indirect, factory-related costs in production matching principle-the revenues generated in an accounting period are identified with related costs whenever they were incurred materialityminority interests-this part of the net assets of the subsidiary, which is part owned by external shareholders net-value gross without tax net loss-an excess of expenses over revenues during an accounting period net profit / net income-the excess of all revenues in a period over all expenses and losses non-cash expense-e.g. deposits, depreciation objectivity principle-all accounting data recorded must be verifiable and free from bias obsolete-not used any more, or replaced by something newer and better operating activities / operations-(on a cash flow statement) a business's ordinary day-to-day activities output-something produced by a system or process; the quantity of goods and services produced by a company, or in an economy overheads / overhead / indirect expenses-regular and necessary costs involved in operating a business paidpayment-a sum of money paid pension fund-a financial institution that invests money that will later provide retirement income periodicity-an alternative term for the time-period assumption plant-machines used in industry

premium-a price higher than face value; the price of an insurance contract; the fee the writer of an option receives from the buyer pre-paid expenses / deferred expense-a cost that is paid in advance of being incurred (e.g. rent, insurance premiums) prime cost / direct cost-the cost of raw materials and labour/labor involved in manufacturing process cost accounting-a way of determining and allocating costs for products whose manufacture involves a continuous process profit and loss account (P&L)-British term for an income statement: the financial statement showing net income or net profit (or possibly net loss) property -something that someone owns property, plant and equipment-buildings, machines, vehicles, etc. recorded on a balance sheet purchasing-the department in a company that buys components, raw materials, etc. purchases ledger-an alternative name for a bought ledger quarter-a three-month period for which a company issues interim financial statements raw materials-substances used to manufacture products realization principle-an alternative name for the revenue principle recordreduce-e.g. decrease the value replace-an alternative name for change, replace, etc. research and development expenses (R&D)-expenses on research and development resources-useful or valuable materials or qualities possessed by an organization restate-changing the company's legal form ; the transformation is to align the legal form of the company to run current operations and to changing economic conditions retained earnings-the part of a company's profits not distributed to stockholders revenue-money received by a business for goods sold and services provided revenue principle-revenue is realized at the moment when goods are sold or when services are provided, not when the payment is received sales-revenues received for goods and services sales ledger-an account book recording transactions made by customers sales tax-a tax on goods and services scrap value-the price at which at asset can be sold at the end of its useful life selling, general and administrative expenses (SG&A)-the costs of service departments such as administration, marketing, research and development, finance, etc. senior accountant-interpret the transactions recorded by bookkeepers separate entity assumption-another name for the accounting entity assumption settle-an alternative name for square, arbitrate settlement day-the day on which stocks purchased on an exchange have to be paid for shareholders-one of the part-owners of a company, who has bought some of its shares shareholders’ equity / stockholders'/owners' equity / net assets-a company's combined share capital and accumulated retained earnings share-British term for a certificate representing part-ownership of a company share capital-money a company has received from issuing shares short-term-in finance, means a period of a year or less standard cost-an expected or average cost of materials, labour/labor and overheads used in cost accounting, rather than actual costs statement of cash flows-a financial statement showing the cash generated and used by a company cash flow statement-a financial statement showing the cash generated and used by a company

funds flow statement-a financial statement showing the cash generated and used by a company source and application of funds statement-a financial statement showing the cash generated and used by a company statement of financial positions-alternative US name for a balance sheet statement of operations-an alternative name for an income statement stocks-US term for a certificate representing part-ownership of a company; an alternative British term for inventory straight line method-a way of depreciating an asset by charging an equal sum each year during the asset's expected life supplier-a business that sells materials or goods to other companies tangible assets-part of the assets of the entity that has material form (as opposed to intangible assets) tax-a compulsory monetary contribution imposed by a government on individual's and organizations' income and expenditure tax accounting-the calculation of liabilities for tax taxation-the transfer of money from individuals and companies to the government to finance its expenditure tax avoidance-reducing tax liabilities to a minimum by legal means tax deductible-describes a sum that can be subtracted from profits before tax is paid tax evasion-making false tax declarations tax haven-a financial centre offering low taxes to non-residents, in which multinational companies are encouraged to set up offices taxable profit-the size of which is income minus allowable deductions and deductions law (e.g. for loss from previous years) time-period assumption / periodicity-an ongoing business reports financial data for particular periods (years, quartets, months, etc.) total sales / turnover-a business's total revenue from the sale of goods and services transaction-a business deal, a trade or exchange trial balance-a test to determine whether the total amount of debit balances in the general ledger is equal to the total amount of credit balances unit cost-the cost of producing one unit of a good, including indirect costs or overheads unit-of-measure assumption-all transactions are accounted for in the currency of the country where the organization reports its operations value-added tax / VAT-a sales tax collected at each stage of production, excluding the already-taxed costs from previous stages variable costs-production costs which change in proportion to the volume of production variance-the difference between the standard cost and the actual cost of an input or output (to) wear out-to become damaged and unusable over time working capital / funds-current assets minus current liabilities (to) write off-to cancel a worthless asset or a bad debt from an account; to reduce the value of an asset by charging part of its value against earnings or profits

unit 7, Accounting SŁÓWKA absorption costing

DEFINICJA ANG. the allocation of fixed and variable costs relating to production in the calculation of the price of goods or services

accelerated depreciation deducting most of the cost of a capital investment from taxable profit during the first years of use accountant accounting

a person responsible for reporting financial results recording, reporting and analyzing a business’s financial transactions accounting clerk / bookkeeper person who records day-to-day sales and purchases and / accounts clerk revenues received and payments made accounting entity assumption a business is an accounting unit separate from its owners and their personal transactions accounting equation on a balance sheet: assets= liabilities+ owner's equity accounting period a twelve-month period that constitutes an organization's fiscal year accounting standards rules for reporting accounting data in financial statements that are used in a financial statements accounts payable / creditors amounts of money owed to suppliers for purchases made on credit accounts receivable / debtors amounts of money owed by customers for goods or services sold on credit accrual basis revenue is recognized ( or recorded) when it is earned and expenses are recognised when they are incurred accrued expenses accumulated depreciation activity-based costing (ABC) actual cost

an expense that has occurred and been recorded on the balance sheet, but has not yet been paid the total depreciation of a tangible asset up to specific date a way of allocating costs to products according to the different activities they require the real amount paid or incurred, as opposed to as estimated or standard cost expenses to a different period

adjusting entry

a bookkeeping entry made at the end of an accounting period to assign income or expenses to a different period

allocated allow

matched with right type of transaction agree

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amortization annual report

assets assigned audit report auditing auditor

depreciating or writing off an intangible asset over its projected life a document sent do shareholders giving details about a company's activities in the preceding year, and financial data organized into financial statement something of value owned by a business and used to generate income allocated a report on a company's accounts written by external auditors reviewing and evaluating financial records a person who review financial statements and ledgers

balance sheet

a statement showing company's financial position on a particular date, reporting assets, liabilities, and owner's equity

book value / carrying value

the worth of an asset as recorded in a company's accounts (costs minus accumulated depreciation) person who record transactions in purchase ledgers and sales ledgers recording day-to-day sales and purchases, revenue and payments recording day-to-day sales and purchases, revenue and payments the last line on an income statement or profit and loss account, showing net income or net profit(net loss) planning of a future income and expenses an account book recording purchases made buy something on the instalment plan investments to raise a capital a liquid asset that can quickly be turned into cash, such as short-term investments a financial statement showing the cash generated and used by a company the movement of money in and out of an organization

bookkeeper bookkeeping bookkeeping the ledger bottom line budgeting bought ledger buy on instalment capital investments cash equivalents cash flow statement cash flow charge against chart of accounts closing entries

commission

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financial situation when buyers will have to account for VAT and pay it on account of tax office a list of all the accounts in a general ledger an entry made to a temporary account at the end of the year setting the revenue and expense balances at zero money paid to sales people and agents depending on the amount of goods sold

competitors conservatism consistency principle

a rival in business( the same goods)

consolidated statement

the combined financial statements of a parent company and its subsydiary/ies the supposition that a business will continue indefinitely into the future ( so its assets are not for sale)

continuity assumption / going-concern assumption cost accounting cost of goods sold (COGS) credit creditors current assets current liabilities debit

deduct deferred expenses depreciations direct cost distributor dividends double-entry bookkeeping earn EBIT= earnings before interest and tax EBITDA= earnings before interest, tax and depreciation and amortization economic entity expenditure expense accounts 18

the same methods (of inventory valuation, depreciation, etc.) must be used from one accounting period to the next

the determination of the cost of goods and services including indirect expenses the sum of the expenses involved in producing an selling goods an arrangement to receive goods but pay later accounts payable, vendors assets that will be consumed or turned into cash in the ordinary course of business in the next year debts to be paid within one year of the date of the balance sheet an amount entered on the left-hand side of an account , recording a payment made, to make a such entry to subtract an amount from a total a cost that is paid in advance of being incurred(e.g. rent, insurance premiums) reducing the recorded value of an asset over the length of its estimated useful life the cost of raw materials and labour/labor involved in manufacturing a company that sells a manufacturer’s products to customers a share in the annual profits of a limited company paid to stockholders an shereholders a system that records transactions in two journals, for payments made and payments received to gain earnings before interest and tax earnings before interest, tax and depreciation and amortization another name for the accounting entity assumption spending; money that spent accounts of expenses

external audit

a review of financial statements and accounting records by accountants not belonging to the firm; verify that a company's published financial statements give a true and fair view of its profit, its assets and its liabilities

fee

money paid to banks, lawyers, auditors, etc. for professional services the preparation of financial statements for shareholders, creditors, etc. financial statement documents giving financial information that companies have to provide to stockholders fiscal year funding borrowing money, issuing an repaying debt, issuing stocks paying dividends, etc. buildings, land, plant, machinery, etc. Used in productive activities costs and overheads incurred by production that do not change with production volume the allocation of all fixed and variable costs relating to production in the calculation of the price of goods or services

financial accounting financial report financial statements financial year financing financing activities fixed assets fixed costs full costing / absorption costing full-disclosure principle funds flow statement gain general ledger / nominal ledger

financial reporting must include all significant information a financial statement showing the cash generated and used by a company a profit made on a transaction a book containing all the balance sheet accounts (assets, liabilities, and equity) and income statement accounts (revenues and expenses)

generally accepted accounting widely accepted accounting standards that accountants principles (GAAP) must adopt going-concern assumption the supposition that a business will continue indefinitely into the future (so its assets are not for sale) goodwill

the value to a company of loyal customers, a good reputation, etc.; the amount by which the purchase price of a company exceeds the value of its net assets

gross gross profit / gross margin historical cost principle

includes net with VAT a business's total sales minus the cost of sales accounts record the initial price paid for assets

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IFRS – International Financial Reporting Standards income

an alternative name for a company's earnings; all the money received by an individual during a given period

income statement

US term for a profit and loss account: the financial statement showing net income or net profit (or possibly net loss)

income tax

tax paid to the government on an individual's earnings and a company's net profit to do something that makes the business liable for an expense regular and necessary costs involved in operating a business a tax levied on the sale of goods and services something that is put into a system or process, and transformed into an output money paid in a few parts things of value that cannot be physically touched, such as brand names, copyrights, trademarks and patents

incur indirect costs / indirect expenses indirect tax input instalment intangible assets

interest cover / times interest earned interim financial statements internal audit

inventory investing investing activities job-order cost accounting

journal labour / labor ledger

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EBIT divided by interest expenses statements for shorter periods published during the fiscal year or financial year a control of accounts by a company's own accountants, checking for completeness, accuracy, reliability, etc. a company's stock of products waiting to be sold, and raw materials and work-in-process buying securities, property, machines, etc., in order to produce income or profits (on a cash flow statement) buying or selling property, plant and equipment a system for determining the cost of a particular batch of products for a specific customer a bookkeeping record of transactions in the order that they take place productive work, done for money, that provides goods and services a book of accounts

liabilities long-term (to) lose management accountants management accounting managerial accounting manufacturing manufacturing overheads manufacturing support costs / factory burden matching principle

materiality minority interests net net loss net profit / net income non-cash expense objectivity principle obsolete operating activities / operations output

overheads / overhead / indirect expenses paid payment pension fund periodicity

21

amounts of money owed that will have to be paid in the future in finance, refers to a period or maturity of more than one year use accounting data to make decisions about how the business should proceed the provision of financial information for the use of a company's managers the provision of financial information for the use of a company's managers making products from raw materials and components fixed, indirect, factory-related costs in production fixed, indirect, factory-related costs in production the revenues generated in an accounting period are identified with related costs whenever they were incurred this part of the net assets of the subsidiary, which is part owned by external shareholders value gross without tax an excess of expenses over revenues during an accounting period the excess of all revenues in a period over all expenses and losses e.g. deposits, depreciation all accounting data recorded must be verifiable and free from bias not used any more, or replaced by something newer and better (on a cash flow statement) a business's ordinary day-today activities something produced by a system or process; the quantity of goods and services produced by a company, or in an economy regular and necessary costs involved in operating a business a sum of money paid a financial institution that invests money that will later provide retirement income an alternative term for the time-period assumption

plant premium

machines used in industry a price higher than face value; the price of an insurance contract; the fee the writer of an option receives from the buyer

pre-paid expenses / deferred expense prime cost / direct cost

a cost that is paid in advance of being incurred (e.g. rent, insurance premiums) the cost of raw materials and labour/labor involved in manufacturing a way of determining and allocating costs for products whose manufacture involves a continuous process

process cost accounting

profit and loss account (P&L)

British term for an income statement: the financial statement showing net income or net profit (or possibly net loss)

property property, plant and equipment

something that someone owns buildings, machines, vehicles, etc. recorded on a balance sheet the department in a company that buys components, raw materials, etc. an alternative name for a bought ledger a three-month period for which a company issues interim financial statements substances used to manufacture products an alternative name for the revenue principle

purchasing purchases ledger quarter raw materials realization principle record reduce replace research and development expenses (R&D) resources restate

retained earnings revenue revenue principle

sales

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e.g. decrease the value an alternative name for change, replace, etc. expenses on research and development useful or valuable materials or qualities possessed by an organization changing the company's legal form ; the transformation is to align the legal form of the company to run current operations and to changing economic conditions the part of a company's profits not distributed to stockholders money received by a business for goods sold and services provided revenue is realized at the moment when goods are sold or when services are provided, not when the payment is received revenues received for goods and services

sales ledger sales tax scrap value selling, general and administrative expenses (SG&A) senior accountant separate entity assumption settle settlement day shareholders shareholders’ equity / stockholders'/owners' equity / net assets share share capital short-term standard cost

statement of cash flows cash flow statement funds flow statement source and application of funds statement statement of financial positions statement of operations stocks

straight line method supplier tangible assets

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an account book recording transactions made by customers a tax on goods and services the price at which at asset can be sold at the end of its useful life the costs of service departments such as administration, marketing, research and development, finance, etc. interpret the transactions recorded by bookkeepers another name for the accounting entity assumption an alternative name for square, arbitrate the day on which stocks purchased on an exchange have to be paid for one of the part-owners of a company, who has bought some of its shares a company's combined share capital and accumulated retained earnings British term for a certificate representing part-ownership of a company money a company has received from issuing shares in finance, means a period of a year or less an expected or average cost of materials, labour/labor and overheads used in cost accounting, rather than actual costs a financial statement showing the cash generated and used by a company a financial statement showing the cash generated and used by a company a financial statement showing the cash generated and used by a company a financial statement showing the cash generated and used by a company alternative US name for a balance sheet an alternative name for an income statement US term for a certificate representing part-ownership of a company; an alternative British term for inventory a way of depreciating an asset by charging an equal sum each year during the asset's expected life a business that sells materials or goods to other companies part of the assets of the entity that has material form (as opposed to intangible assets)

tax

a compulsory monetary contribution imposed by a government on individual's and organizations' income and expenditure

tax accounting taxation

the calculation of liabilities for tax the transfer of money from individuals and companies to the government to finance its expenditure

tax avoidance tax deductible

reducing tax liabilities to a minimum by legal means describes a sum that can be subtracted from profits before tax is paid making false tax declarations a financial centre offering low taxes to non-residents, in which multinational companies are encouraged to set up offices

tax evasion tax haven

taxable profit

the size of which is income minus allowable deductions and deductions law (e.g. for loss from previous years)

time-period assumption / periodicity total sales / turnover

an ongoing business reports financial data for particular periods (years, quartets, months, etc.) a business's total revenue from the sale of goods and services a business deal, a trade or exchange a test to determine whether the total amount of debit balances in the general ledger is equal to the total amount of credit balances

transaction trial balance

unit cost

the cost of producing one unit of a good, including indirect costs or overheads

unit-of-measure assumption

all transactions are accounted for in the currency of the country where the organization reports its operations

value-added tax / VAT

a sales tax collected at each stage of production, excluding the already-taxed costs from previous stages

variable costs

production costs which change in proportion to the volume of production the difference between the standard cost and the actual cost of an input or output to become damaged and unusable over time current assets minus current liabilities to cancel a worthless asset or a bad debt from an account; to reduce the value of an asset by charging part of its value against earnings or profits

variance (to) wear out working capital / funds (to) write off

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II SEMESTER unit 9 Revision of vocabulary: What is the main purpose of the central bank: Lend money to small businesses Issue securities for companies Maintain financial stability Manage the assets of wealthy individuals The difference between two prices – a buying price and a selling price is: Prime rate Inflation Spread Base rate The maximum amount of production possible: Demand Capacity Labour Supply 1c2c3b The central bank has to detect and R_ _ _ _ _ T_ _ _ _ _ _ to financial stability, and make sure the overall system is safe and secure (reduce threats) Supplying very short - term liquidity to commercial banks is described as acting as L_ _ _ _ _ of L _ _ _ R_ _ _ _ _ (lender of last resort) Central banks can also change the amount of money circulation by changing the R_ _ _ _ _ _ R_ _ _ _ _ _ _ _ _ _ (reserve requirement)

Word formation The Bank’s role includes also ___________ of payment system for transactions between individuals, businesses and financial institutions. (sight) OVERSIGHT 25

In order to eliminate a shortage of cash or ________, the commercial banks have to maintain a minimum balance at the central bank. (liquid) LIQUIDITY High interest rate lead to lower inflation, but it may also reduce output and increase the ____________ rate. (employment) UNEMPLOYMENT Revision of grammar: How would You say this figure: Euro is worth $1.0629 One dollar and zero six two nine One dollar point zero six two nine One point zero six two nine dollars One point zero six two nine dollar

C

The aim of monetary policy is to keep inflation low and stable by ________ demand with supply. (match) MATCHING

If interest rates are too high, individuals will borrow and spend less money, and companies will invest less in the future of the business. This will help to reduce inflation. (Because of, As a consequence) Because of too high interest rate, individuals will borrow and spend less money, and companies will invest less in the future of the business. As a consequence inflation will be reduced.

Vocabulary a sound and stable financial system – kolokacja; stabilny I wypłacalny system finansowy policy – polityka – an agreed plan of what to do threats – groźby – potential sources of danger oversight – niedopatrzenie – supervision 26

target – cel – a level or situation which you intend to achieve core (adj.) – główny – basic and most important sound (adj.) – zdrowy, nietknięty – in good condition inflation – inflacja – a general, continuous increase in prices incentive – bodziec, zachęta – encouragement or a reason to do something plant – fabryka – factories, and the machines and equipment in them capital – kapitał – money invested in companies, to buy buildings, machinery, etc. supply – zasoby – the quantity of goods and services offered for sale by companies demand – popyt – what people consume and how much they invest labour – cieżka praca, siła robocza– work done by people employed by businesses solvency – wypłacalność – the state of being solvent solvent – wypłacalny – able to pay bills and fixed expenses and debts when they become due mortgage – hipoteka – a loan to buy property or real estate profitable – dochodowy, opłacalny, zyskowny, rentowny – adjective meaning generating a profit collateral – zabezpieczenie – assets that secure or guarantee a loan, and that can be sized by the lender if the borrower does not repay interest – udział, odsetki – the price paid for borrowing money, paid to the lenders discount rate – stopa dyskontowa – the interest rate at which US Federal Reserve make secured loans to commercial banks; the interest rate used in discounting future cash flows bank rate - prime rate - stopa procentowa kredytu – US term for the interest rate commercial banks charge blue-chip companies blue-chip companies – bardzo wartościowe przedsiębiorstwa – large businesses with a good reputation and a long record of being profitable tight or scarce – ograniczony – describes money when monetary policy limits its supply and makes borrowing money difficult property – real estate – własność – something that someone owns; British term for buildings foreign exchange or ‘forex’ – waluty zagraniczne – currency from other countries growth – wzrost, rozwój – the increase of economic activity in a country; the increase in the size of a business liquidity - płynność środków finansowych – the degree to which assets can easily be sold, with minimum loss of value; cash and other liquid assets in excess of current liabilities balance – saldo – the amount of money (or the size of the deficit) in an account; an amount of money exports of both goods and services 27

settlement day – dzień rozliczeniowy – the day on which stocks purchased on an exchange have to be paid for output - produkcja, wyniki pracy – something produced by a system or process; the quantity of goods and services produced by a company, or in an economy unemployment – bezrobocie – the state of being out of work, or the number or percentage of people out of work consume – konsumpcja – to spend money on goods and services the reserves – rezerwy – money that a bank has available for customers to withdraw reserve requirement - wymóg posiadania rezerwy – the percentage of assets that commercial banks are obliged to keep in cash lender of last resort (LOLR) - pożyczkodawca ostatniej szansy – a bank that will lend money to financial institutions in difficulty if on other bank will bankrupt – bankrupt – having been legally declared insolvent; to force a person or business into bankruptcy II SEMESTER unit 13 'Foreign Exchange' 3 sentences with gaps and A, B, C, D multiple answers (only 1 is correct). 1.Which of the following expressions describe increase: a) to fall b) to decline c) to rise d) to level off 2. Rising and falling according to market forces a) sinking b) floating c) swimming d) modify 3. To fall in value. a) appreciate b) modify c) depreciate d) recover 3 sentences with gaps and the first letter of a financial term given. Hedge - to try to eliminate the risk of future prices changes. Speculation - risking transactions, made in the hope of profiting from future price changes. An exchange rate is the price at which one currency can be exchanged for another. 3 sentences with gaps, in brackets a base form is given of a financial term to be transformed 28

(word formation). My friend works as a financial (finance) advisor in NY. An accountant (account) is a professional person who performs accounting functions such as audits or financial statement analysis. Amortization (amortize) means paying off of debt with a fixed repayment schedule in regular installments over a period of time. 1 sentence with a gap and A, B, C, D multiple answers (only 1 is correct) Retail prices …… by 7% last year. rise have been rising are rising rose 1 sentence with a gap, in brackets an infinitive is given to be transformed in a suitable tense form. After World War II, the levels of most major currencies (determine) were determined by governments and central banks. Two sentences to be transformed with the help of a suitable linking word, or grammar construction. Floating exchange rate … (cause) problems for business: the price of products sold abroad, can rise or fall rapidly. Currencies are traded in pairs, … (for example) Euro/US Dollar or US Dollar/Japanese Yen. List of financial terms accompanied with their explanation (based on materials from 2 class student's books) to be emailed ACCOUNTING – recording, reporting and analyzing a business’s financial transactions ACQUIRE – to buy, gain, get, receive or take possession of something; to take over a company by buying its stocks; to make an acquisition ASSET – something of value owned by a business and used to generate income BALANCE – the amount of money (or the size of the deficit) in an account; an amount of money remaining to be paid; to bring into equilibrium CAPITAL – the money invested in a business and used to buy the assets DEFICIT – the result of spending that exceeds revenue EBIT (earnings before interest and tax) – a company’s earnings reported on an income statement before the deduction of interest expenses and taxes FUND – an amount of money saved for a specific purpose; to finance an enterprise GROWTH – the increase of economic activity in a country; the increase in the size of a business HEDGING – making transactions designed to diminish future price risks INCOME – an alternative name for a company’s earnings; all the money received by an individual during a given period JOINT VENTURE – two or more companies working together on a project LIABILITIES – amounts of money owed that will have to be paid in the future 29

MORTGAGE – a loan to buy property or real estate NPV (net present value) – the total of expected future cash flows, discounted to their present value, minus an investment’s initial cost OPTION – a contract giving the right, but not the obligation, to buy or sell an asset in the future PENSION – money paid to a retired employee RISK – the possibility of loss; to do something although there is a chance of a negative outcome SAVING – keeping money in order to spend it in the future TAKEOVER – when one company acquires another one UNSECURED – describes a loan not guaranteed by assets or any form of collateral VOLATILE - likely to change in value in a short period of time WAGES – a fixed amount of money paid for manual work III SEMESTER unit 15 1.Sentences with gaps and A, B, C, D multiple answers (only 1 is correct). ……. is when you have no money to pay your debts, so you have to sell your assets. a) collateral b) raise capital c) bankruptcy d) flotation Current assets minus current liabilities gives you a company’s …….. a) profitability b) working capital c) return on assets d) gross profit margin Common term to describe investors who expect prices to rise is …. a) bears b) ducks c) wolfs d) bulls 2. Sentences with gaps and the first letter of a financial term given. Some s_ _ _ _ _ _ _ _ _ _ _ prefer not to recive dividends, because tax on capital gains is lower than income tax on dividends. D_ _ t_ _ _ _ _ _ are people who buy and resell shares in a very short time, often just a few hours. If the company is successful it can become a p_ _ _ _ _ c _ _ _ _ _ _ by offering stocks to the market. 3.Sentences with gaps, in brackets a base form is given of a financial term to be transformed. The ( found ) ……. of new businesses can use their own money, or try to borrow from banks. Consequently a period when the value of most stocks is ( rise ) ……. is a bull market. ( institution ) investors are usually slower to sell when the market falls than personal investors. 4. Revision of grammar. Offering stocks for sale to financial institutions and individuals investors ……… “going public” as it changes the business from a private company to a public company. a) calls 30

b) have called c) is called d) have been calling After stocks ( sell ) …… …… …… the first time on the primary market the can be traded on the secondary market. ● Use linking word to transform these sentences : Company issues shares. It needs money for development. Klucz odpowiedzi: 1 C, B, D 2 shareholders, day traders, public company 3 founders, rising, institutional 4 is called , have been sold Company issues shares since it needs money for development List of financial terms: stock and shares ● bear an investor who expects stock prices to fall ● bull an investor who expects stock prices to raise ● issuer an organizaton raising money by offering for sale ● investment bank bank that advises companies and raises money for them and trades financial products ● go public to offer a company stock for a sale on stock exchange for the first time ● collateral assets that secure or guarantee a loan ● institutionals investors a financial institution such as an insurance company, pension fund, etc. that buy securities ● day trade r a person who buys and resells stock in a short period of time ● earnings per share (EPS) a company’s total earnings for the year divided by number of ordinary shares or common stocks ● treasury shares British term for shares that have been repurchased by a company ● shareholder one of the partowners of a company, who has bought some of its shares ● small cap popular name for a stock with a small capitalization ● speculator a person or organization that takes on high risks for high rewards ● settlement day the day on which stocks purchased on an exchange have to be paid for ● stock index a statistical indicator showing changes in the market value of selected group of important stocks on a particular stock market ( WIG20) ● marketmaker a trader in securities who quotes a bid (buying) and offer (selling) prices ● due diligence a detailed examination of company and its financial situation ● supply the willingeness and ability to offer goods and services for sale ● demand the willingnessand ability of consumers to purchase good and services to ask for something forcefully ● stock market the market in which stocks and shares are issued and traded ● stockholder American word for shareholder 31

● equity the stock of a business, held by stockholers who own the company ● private company a privately founded company that has not issued equity to the public ● public company a listed or quoted company whose shares are traded on a stock exchange ● cororpation US term for a public limited company ● bluechip company large stable company with a good reputation ● balance sheet a statment showing a company’s financial position on a particular date reporting assets and owners’ equity ● ordinary shares British term for normal equities representing partownership of a company ● oversubscribed descibes a security issue for which there are more wouldbe buyers than securities available ● volatility the degree to which a price is likely to change in a short period of time ● voting shares shares that give their holders the right to vote at a company’s annual general meeting ● annual general meeting (AGM) British term for a yearly meeting with the directors to which companies have to invite all shareholders ● dividend a share in the annual profits od a limited company, paid to stockholders and shareholders III SEMESTER unit 17 1.Sentences with gaps and A, B, C, D multiple answers (only 1 is correct) A ....... is a combination of two companies to form a new company . A. conglomerate B. merger C. takeover bid D.acquisition

An .............. is the purchase of one company by another in which no new company is formed . A. conglomerate B. merger C. takeover bid D.acquisition

A .................. is a public offer to a company's stockholders to buy their stocks at a certain price during a limited period of time. A. conglomerate B. merger 32

C. takeover bid D.acquisition

2. Sentences with gaps and the first letter of a financial term given Diversification can damage a company's image, g......... and shared values.

A r..... involves buying as many of a company's stocks as possible on the stock market. C............ are large corporations or groups of companies offering a number of different products or services.

3.Sentences with gaps, in brackets a base form is given of a financial term to be transformed They finally reached ( agree ) .......... on the price of shares. Your ( finance ) ................ situation is better than I expected. There are no new obligations for those who already have a good ( manage ) ......system.

4. Revision of grammar Successful companies generally want to .............. - to introduce new products or services , and enter new markets. A. be diversified B. diversify C. have diversified D. diversifies

If there is more demand for stock than there are sellers , this ( increase ) ........... the stock price .

Use linking word to transform these sentences : CEO's of these two companies doesn't like each other . Next month they will have to marge their companies.

33

Klucz : 1. B, D,C

2. goodwill, raid , conglomerates

3. agreement , financial , management

4. diversify increases

CEO's of these two companies doesn't like each other , however next month they will have to marge their companies.

List of financial terms : parent company - the company that owns or controls one or more other companies core business - a company's central and most important activity asset-stripping - buying a company in order to sell some of its assets private equity funds - companies that are not publicly traded on a stock exchange and that undertake buyouts junk bonds - speculative debt instruments with a low credit rating but high yield market capitalization- the total market value of all a company's stocks horizontal integration - companies increase their market share by acquiring a competitor in the same field of activity vertical integration - companies achieve cost savings by buying businesses involved in their supply chain backward integration - acquiring suppliers of raw materials or components 34

forward integration - buying distributors or retail outlets takeover bid - a public offer to a company's stockholders to buy their stocks , at a particular price ( higher than the current market price ) during a particular period friendly takeover - one that has a consent of the board of directors of the company being acquired hostile takeover - is one undertaken against the wishes of the directors of the target company poison pill - " eat me and You will die " : doing something that makes the takeover more difficult or more expensive market share - a company's sales expressed as a percentage of the total sales in the market economies of scale - cost reductions resulting from increased production supply chain - all the organizations involved in the production , distribution and sale of the product distributors - companies that sale a manufacturer's products to customers retail outlets - places where goods are sold to customers conglomerates - groups of diverse companies that are under common ownership and run as single organizations subsidiaries - companies that are owned and controlled by a parent company discount - a reduction in price diversify - adding new and different products or services fees - money paid to investment banks for work done synergy - combined production or productivity that is greater than the sum of the separate parts raiders- people or companies that try to buy and sell other companies to make a profit slump - a period when an economy is doing badly boom - a period when an economy is doing very well to drum up business - to try to get new customers cyclical - going round and round or repeating a buying spree - buying a lot in a short period III SEMESTER unit 19 Accounts payable

35

Amounts of money owed to Należności, kwoty należne suppliers for purchases made on credit; creditors

bear

an investor who expects stock prices to fall; to support or carry a risk or responsibility Blue-chip company A large, stable company with good reputation bond

Inwestor grający na zniżkę cen Firma przynosząca dochód, wartościowa, bezpieczna Papier wartościowy

A long-term, interest-paying loan raised by a government or a company to finance expenditure or investment, redeemed after a fixed period Bonus issue A way of turning profits into capital by issuing new Emisja bonusowa stocks to stockholders instead of paying a divident bull An investor who expects stock prices to rise Inwestor grający na zwyżkę cen Call option A contract giving the right to buy an asset at a Opcja kupna specific price in the future commodity A raw material which can be bought or sold with Towar, produkt, który jest futures contracts kupowany i sprzedawany Common stock US term for ordinary shares representing partAkcja zwykła ownership of a company Creditors Amounts of money owed to suppliers for purchases Należności made on credit = accounts payable Currency swap An exchange between two parties of specific Swap walutowy amounts of different currencies and interest payments Defensive stock The stock of a company with stable sales and Akcje bezpieczne earnings, whose balue is not expected to change much Derivatives A financial market product whose value of a Derywatywa, instrumenty currency in a system of otherwise fixed exchange pochodne rates dividend A share in the annual profits of a limited company, dywidenda paid to stockholders and shareholders Exchange rate The price at which one currency can be exchanged Kurs wymiany walut for another Excercise price The price at which an option can be exercised Cena wykonania, (strike price) realizacji Exercise (verb) To use or implement an option (to take up the Wykorzystać/zrealizować possibility of buying or selling an asset) (opcje kupna/sprzedaży) Financial futures Contracts to buy and sell financial assets like Finansowe transakcje currencies, bonds, stocks and stock indexes at a terminowe typu futures future date Fixed exchange rate One that can only be changed with the agreement Sztywny kurs walutowy of a government or central bank Fixed interest rate An interest rate which does not fluctuate during the Stała stopa procentowa fixed rate period of the loan Floating exchange One that changes according to the supply of and Płynny kurs walutowy rate demand for cu Floating interest rate One that can change during the period of a loan Zmienna stopa procentowa Forward contract Non-standarized futures contract, negotiated Kontrakt terminowy, 36

directly between two parites Futures contract gilt Growth stock hedging Income stock Interest payments Interest rate swap Junk bond Market-maker Non-standardized contract option Ordinary shares Over-the-counter (OTC) Plain vanilla Preferred stock Put option Rights issue speculate speculation speculator stag Standardized contract Stockbroker Stockholder 37

umowa terminowa typu forward Contract to buy or sell an asset at a fixed price in Kontrakt terminowy the next few months (instrument finansowy) British term for government bond; glit-edged stock Obligacja państwowa A stock that is expected to regularly rise in value Akcje rokujące wzrost Making transactions designed to diminish future Zabezpieczenie; price risks transakcje zabezpieczające na rynku kapitałowym The stock of a company with a history of paying Akcja dochodowa high dividents A payment amount determined by the interest rate Raty odsetkowe on an account An exchange between two parties of future Swap procentowy, na payments on borrowed money stopę procentową A bond with a low credit rating that pays a high Obligacja śmieciowa rate of interest A trader in securities who quotes bid (buying) and Kreator rynku offer (selling) prices Describes contracts negotiated and traded directly Kontrakt bez standaryzacji between two parties without using an exchange A contract giving the right, but not the obligation, Opcja (kupna lub to buy or sell an asset in the future sprzedaży) British term for normal equities representing part- Akcje zwykłe ownership of a company Describes contracts negotiated between two parties Akcje pozagiełdowe, w without using an exchange wolnym obrocie Describes a standard (as opposed to an exotic) Standardowa umowa derivative contract pochodna A form of equity whose holders receive a fixed Akcje uprzywilejowane divident; preference share A contract giving the right to sell an asset at a Opcja sprzedaży specific price in the future New stocks offered for sale to current stockholders Emisja praw poboru akcji To make risky transaction, hoping to make a gain Spekulować (finansowo, by anticipating future price changes wykupując i odsprzedając z nadmiernym zyskiem) Making risky transactions in the hope of making a Transakcja spekulacyjna, gain from future price changes spekulacje A person or an organization that speculates: takes Spekulant (osoba on high risks for high rewards odsprzedająca z zyskiem towary) An investor who buys new stock issues hoping that Spekulant giełdowy they will be over-subscribed and therefore increase in value Describes a futures contract with fixed quantities, Kontrakt standaryzowany time periods, etc., traded on a market A person or institution that buys and sells stocks Makler giełdowy and other securities when instructed by investors One of the part-owners of a company, who has Akcjonariusz, udziałowiec

Stock index Strike price subprime swap

Tracker fund

brought some of its stock A statistical indicator showing changes in the market value of a selected group of important stocks on a particular stock market The price at which an option can be exercised; excercised price Describes a loan offered to an borrower with a poor credit rating An exchange of securities or cash flows between two parties

A fund that invests in many companies in a stock market index and tries to follow the index's movements; index-linked fund Treasury bill (T-bill) A short-term debt obligation issued by a national government uncertainty A situation when you are not sure about something underlying In derivatives, the security that must be delivered when a derivative contract, such as a put or call option, is exercised. Underlying asset An asset whose independent price determines the value of a derivative product underwrite To take on a risk; to guarantee to buy newly issued stocks Value stock A stock that investors think is trading for less than it should be worth warrant A security attached to a bond, giving the right to buy stocks in the future at a particular price warranty A type of guarantee that a manufacturer or similar party makes regarding the condition of its product. Zero coupon bond A bond sold at a discount that pays no interest but is redeemed at par value

(w firmie) Indeks giełdowy Cena wykonania, realizacji, kurs wykonania opcji O zwiększonym ryzyku (np. kredyt) Umowa pomiędzy dwoma podmiotami polegająca na wymianie przyszłych strumieni płatności, które kontrahenci postrzegają w momencie transakcji jako równoważne Fundusz indeksowy Weksel skarbowy Niepewność, wątpliwość Zasadniczy, podstawowy, fundamentalny Instrument bazowy Ręczyć (za coś), gwarantować Wartość zapasów Świadectwo udziałowe gwarancja Obligacja zerokuponowa, nieoprocentowana

VOCABULARY 1. 3 sentences with gaps and A, B, C, D multiple answers (only 1 is correct). Trader in securities, who quotes bid and offer prices is called _____________ A) stag B) market-maker C) bears D) Bull Stock which receives a divident before the other classes of stock is called _______ A) value stock 38

B) growth stock C) income stock D) preffered stock Synonim for word 'creditor' is ________ A) accounts payable B) stockholder C) stockbroker D) market-maker 2. 3 sentences with gaps and the first letter of a financial term given. 1. The loans are for ten years and are at a f _ _ _ _ i _ _ _ _ _ _ _ r_ _ _ of 6 percent. 2. The crisis caused by s _ _ _ _ _ _ _ loans (high-risk housing credit) has shown that borrowers have been kept too much in the dark. 3. The price of a c_ _ _ _ _ _ _ _ is set by the market.

3. 3 sentences with gaps, in brackets a base form is given of a financial term to be transformed (word formation). 1. He can offer you a ________ (warrant) from 2 to 5 years. 2. As a _______ (speculate) you should make investment decision. 3. Derivatives are transactions whose value is based on an ______ (underlie) asset. GRAMMAR 1. 1 sentence with a gap and A, B, C, D multiple answers (only 1 is correct) In _________, he thinks that buying shares in a single company is risky. A) different words B) another words C) other words D) else words 2. 1 sentence with a gap, in brackets an infinitive is given to be transformed in a suitable tense form. The exercise price for these options ________ (set) later this week, he said. 3. Two sentences to be transformed with the help of a suitable linking word, or grammar construction. John is trying to say that hedging is an important source of demand for derivatives. (what sb means) Let me just repeat the key points of this presentation (go over) ANSWERS 39

Vocabulary 1. B; D; A 2. fixed interest rate; subprime; commodity 3. warranty, speculator, underlying Grammar 1. C 2. will be set 3. What Jonh means is that hedging is an important source of demand for derivatives. Let me just go over the key points of this presentation. IV SEMESTER unit 11 Ex. 1: A(n) …….. is a document of sale submitted by the Government, characterized specific goods (quantities and destination). ·0 Pro-forma invoice ·1 Export licence ·2 Weight certificate This trade term is designed for maritime transport. The seller arranges and pays for the trsnsportation of the goods, but not for the payment of customs duties and taxes. Moreover, the seller arranges and pays for insurance. ·3 Cost And Freight ·4 Cost, Insurance And Freight ·5 Delivered At Terminal Restrictions applied by the government to protect domestic producers or to reduce international trade, are called: ·6 Productivity ·7 Strategic industries ·8 Trade barriers Ex. 2: An exporter that doesn’t want to wait for the buyers to pay the bill can get the money by getting a bank to e_ _ _ _ _ _ the bill before it matures. (endorse) If a bill is endorsed by a bank, the exporter can sell it at d_ _ _ _ _ _ _ on the money market. (discount) The shipping document required to obtain payment, generally contains the short description of the 40

goods and an e_ _ _ _ _ date for presenting it to the bank. (expiry) Ex. 3: Moreover, the smaller the country, the greater will be the pressure to opt for free trade rather than … protectionism….. (protect). The country should specialized in the production of the goods and services in which it has the highest relative ….productivity…. (produce). Decision of the President in your case is ….irrevocable….. . You made a serious fault. (revoke) Ex. 4: You heard the sentence: “Invisibles to the balance of trade gives a country’s balance of payments.” You don’t understand the word “Invisibles”. Which sentence you use to the caller explain you the incomprehensible word? ·9 Could you repeat that, please? ·10 Could you explain that again, please? ·11 What exactly do you mean by “invisibles”? Ex. 5: The seller present the letter of credit providing that the goods …..have been shipped… (ship). And now buyer’s bank have to pay an amount of money to the seller. Ex. 6: Traders complain about trade barriers. The government introduced the high tariffs and quotas. Politicians have proposed a new trading strategy. (have resulted from) The high tariffs and quotas have resulted from a new trading strategy proposed by the politicians. The exporter wrote a bill of exchange. Importer have to pay a specific sum of money either at a future date. (has lead to) Bill of exchange written by an exporter has lead to payment by an importer a specific sum of money either at a future date. Ex. 7: Glossary Infant Industries

Industries in an early stage of development which cannot yet survive foreign competition

Quotas

Maximum quantities of specific goods that can be imported into a country

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Labour

Productive work, done for money, that provides goods and services

Economies of scale

Reduced production costs resulting from large-scale production

Protectionism

Restricting imports by way of trade barriers such as tariffs and quotas

Strategic Industries

Sectors that are particularly important to a country’s economy

Trade Barriers

Specific government policies or regulations that limit international trade

Tariffs

Taxes or customs duties charged on imports

Productivity

The amount of output produced per unit of an input

Balance of Payments

The difference between what a country pays for its imports and receives for its export

Discount

A price below the face value

Matures

Becomes due for repayments

Expiry

Coming to end, finishing or terminating a contract period

Charges

Fees or expenses or costs

Endorse

To acknowledge ownership of a demand for payment and to guarantee to pay it

Irrevocable

Unchangeable or irreversible

Letter of credit

Irrevocable guarantee given by the buyer’s bank to pay a specific amount of money to the seller within a fixed period, when the seller present document proving that the goods have been shipped

Bill of exchange

Document written by an exporter, instructing an importer to pay a specific sum of money either immediately or at a future date

Pro-forma Invoice

The first draft of an exporter’s bill to an importer containing estimated prices, according to which the importer will decide whether to buy or not

Commercial Invoice

Bill for the goods from the seller to the buyer. It contains details of the goods, the terms of delivery, the terms of payment, and the information about transportation

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Export Licence

Is sometimes necessary. A government document authorizing the sale of specific goods in specific quantities to s particular destination

Bill of Lading

Document supplied to an exporter by the shipping company transporting the goods to their foreign destination. It confirms that the goods have been received for shipment, and contains a short description of the goods and details of where they are going.

Insurance certificate

Describes the goods and contains details of how to claim if they are lost or damaged in transit

Certificate of origin

Is requires by some countries for some or all products, stating where the goods come from. This will specify whether the goods come from a country in a free trade area, or whether customs duties have to be paid

IV SEMESTER unit 21

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Revision of vocabulary: 1. Three sentences with gaps and A, B, C, D multiple answers (only 1 is correct). 4) All the investments held by individual investor: a) portfolio b) diversify c) pool d) outperform 2. Passive strategy: a) buying and selling and changing the portfolio frequently b) assets managers or their client try to outperform the market by picking stocks c) buying and holding securities and leaving the position unchanged for a long time d) investors look for growth – companies whose earnings they expect to increase, or for value stocks that are currently cheap but are expected to rise 3. An alternative name for “trigger”(verb) is: a) managed b) cause, provoke c) paid in advance d) invest Odp. 1a, 2c 3.b 2. Three sentences with gaps and the first letter of a financial term given. There are a lots of _ _ _ _ _ _ _ _ _ funds- proffesionaly managed collective investment schemes that pool money from many investors and invest in different types of securities. Investors looking for growth or capital _ _ _ _ _ _ _ _ _ usually buy more stocks than bonds, as they have better profit potential. It's easier to diversify a large _ _ _ _ _ _ _ than a small one. Odp. (mutual, accumulation, portfolio)

3. Three sentences with gaps, in brackets a base form is given of a financial term to be transformed (word formation). Growth (invest) _______________ means looking for growth for capital accumulation. Even fund portfolios need to be (manage) ____________ too. 44

This problem of objectives and portfolio diversification has a direct impact on the returns which (be need) ___ ________ or expected to meet these objectives. Odp. (investment, managed, are needed) Revision of grammar: 1. One sentence with a gap and A, B, C, D multiple answers (only 1 is correct) Choose which sentence of diplomatic phrases means the same like: -

You shouldn’t do that!

a) I’m not sure that would make things any better b) I’m afraid I don’t think that’s very logical c) Perhaps you should consider a different investment strategy? d) Of course. You have right. I agree with you Odp. C 2. One sentence with a gap, in brackets an infinitive is given to be transformed in a suitable tense form. - No! I completely ……. with you. (agree) Odp. Disagree 3. Two sentences to be transformed with the help of a suitable linking word, or grammar construction. -

More stocks than bonds investors look for usually buy growth or capital accumulation (LOOK FOR) Investors looking for growth or capital accumulation usually buy more stocks than bonds. - The market by pick stocks asset managers they expect to do well try to outperform (PICK) Asset managers try to outperform the market by picking stocks they expect to do well. List of financial terms: Asset management – an alternative name of wealth management Portfolio – all the investments held by an individual investor Volatile – likely to change in value in a short period of time Diversify – to buy a wide variety of different securities Allocate – to distribute according to a plan Accumulate – to gradually increase in quantity Outperform – to make higher than average market returns Pool – to put lots of people’s money together and invest it collectively Capital accumulation – the investment strategy that seeks to increase the amount 45

of invested capital Active strategy – buying and selling assets and changing a portfolio frequently Cyclical stock – a stock that rises when the economy is growing and falls when growth slows down Growth – the increase of economic activity in a country Index linked fund or tracker fund – a fund that invests in many companies in a stock market index and tries to follow the index’s movements Mutual fund – British term of for an investment company that pools money from many investors and invests it in securities Passive strategy – a form of asset management which involves buying securities and leaving the position unchanged for a long time Large cap – a popular name for a large capitalization stock (i.e. the stock of a company with a large share capital) Small cap – popular name for a stock with a small capitalization Asset allocation – dividing up an investor’s portfolio into different classes of investments portfolio – a varied collection of investments owned by a person or organization mug- a person who doesn't know very much and is easy to take advantage of handsomely rewarded- well paid come into their own- be successful futile- be unsuccesful, a waste of time upfront- paid in advance better of- richer, in a better situation trigger- cause, provoke growth investment- looking for growth for capital accumulation objectives- cele interest – odsetki IV SEMESTER unit 23

Quality certificate

Issued by a private inspection and testing company, may be necessary, confirming that the shipment consist of the correct goods in the right quantity

Weight certificate

Issued by the customs, certifies the gross weight of the exported goods

International Trade Terms: Ex Works

EXW

Buyer collect goods at the seller’s own premises. The buyer is responsible for providing a vehicle and loading the goods into it

F Terms

The seller delivers the goods to a carrier appointed by the buyer and located in the seller’s country. The buyer arranges insurance

Free Carrier

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FCA The seller has to hand over the goods, cleared for export, to a carrier named by the buyer at a named place where the carrier can load them

into a lorry, train or aeroplane Free Alongside Ship

FAS

Free On Board

FOB The seller pays for loading the goods onto the ship. This term reques the seller to load the goods monitored by the buyer.

C Terms

Seller arranges and pay for the carriage or freight or transportation of the goods but not for the payment of customs duties and taxes

Cost And Freight

CFR

Cost, Insurance and Freight

CIF

Carriage

Use for the transaction where the main carriage is by the sea freight. The seller delivers the goods to the quary next to the ship in the port at which point risk and responsibility pass from the seller to the buyer. This requires the vessel to be in port before the seller delivers the cargo, which is not possible in many ports

Used for sea freight, the seller pays for carriage to the port of destination

Buyer is insurance

for

The seller arranges and pays for insurance

CPT

Buyer

Paid To Carriage

responsible

is

responsible

for

insurance CIP

and

Can be used for air freight and land freight

The seller arranges and pays for insurance

Insurance Paid To D Terms

The seller pays all the costs involved in transporting the goods to the country of destination, including insurance

Delivered At

DAT

Delivery takes place when the seller puts the

Terminal

unloaded goods at the disposal of the buyer at the Buyer is responsible for the

Delivered At

DAP

import clearance of the goods

Place

named terminal Delivery is when seller puts the goods at the disposal of the buyer at a named place such as the buyer’s premises

Delivered

DDP The seller delivers to a specified place such as the buyer’s premises and also pays any

Duty Paid IV SEMESTER 47

import taxes and duties

Unit 23 Vocabulary Ex. 1 1. Financial institutions are ……………… by Federal Reserve and the Securities and Exchange Commission. disclosed B. supervised

C. deregulated

D. reserved

supervised 2. Using ……………… information to buy or sell securities at profit is called insider trading. disclose

B. inaccurate

C. confidentialD. objectivity

confidential 3. ……………… is the percentage of assets that commercial banks are obliged to keep in cash. reserve requirement

B. creditworthiness

C. liquidity

D. capital ratio

1. reserve requirement Ex. 2 Financial r………... make sure that financial institutions and markets comply with law. (regulators) Auditing firms can’t do both audit work and c………… work for the same companies. (consulting) Banks must hold minimum amount of reserves in deposits and banknotes to guarantee l…………. … (liquidity)

Ex. 3 The ………… (consult) gives advice to businesses a specific subjects. (consultant) Although the financial industry was ……………(regulate), many laws still exist. (deregulated) ……………… (supervise) on financial industry is the main task of Fed. (supervision) Grammar Ex. 1 It would be …………… to use the same auditing firm for auditing and consultancy work. 48

A. advisable

B. advisory

C. inadvisable

C. inadvisable Ex. 2 For years I …………… (invest) my money in safe securities, but now I’m taking bigger risk. (was investing) Ex. 3. Rigorous law prevents money laundering by criminal organizations. ………………………………………………………………………….. (be prevented) Money laundering by criminal organizations is prevented by rigorous law. 2. I always choose profitable investments. …………………………………………………………………………. (never, chosen) Unprofitable investments are never chosen by me.

List of financial terms: Auditing Capital ratios Compliance Confidential Conflicts of interest Consulting Counterparties Creditworthiness Deregulation Disclose Inaccurate Insider trading (insider dealing) Investment-grade Legislation Liquidity Mandate 49

reviewing and evaluating financial records the ratio between a bank's capital and reserves, and its total assets following rules and regulations secret, not to be disclosed a situation where one party's financial advantage is not the best thing for another party giving advice to businesses on specific subjects other institutions in an agreement, contract or transaction an estimation of a borrower's present and future solvency the removal of many government controls from an industry or sector to make something publicy known not correct or exact, containing errors using confidential information to buy or sell securities at a profit a rating awarded by a rating agency to high quality, risk-free corporate and government securities a set of laws the degree to which assets can easily be sold, with a minimum loss of value authorization given to an organization to carry out specific responsibilities

Money laundering Objectivity Rating Regulator Reserve requirements Statutory Supervise Supervision Temptation Wholesale

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transferring illegally received money through different companies and bank accounts in order to hide its origin the use of facts, not influenced by opinion or prejudices a classification according to value an official organization that makes sure that financial institutions and markets comply with laws and regulations the percentage of assets that commercial banks are obliged to keep in cash according to laws or regulations to oversee, to make sure things are done correctly watching over people or an organization to make sure they are behaving correctly the wish or desire to do something you should not do working with companies and institutions, and not personal or retail customers