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Архитектура Аудит Военная наука Иностранные языки Медицина Металлургия Метрология Образование Политология Производство Психология Стандартизация Технологии |
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Архитектура Аудит Военная наука Иностранные языки Медицина Металлургия Метрология Образование Политология Производство Психология Стандартизация Технологии |
Демченкова О.А., Якушева И.В.Стр 1 из 15Следующая ⇒
Демченкова О.А., Якушева И.В.
Introduction into Professional English
учебник для студентов и аспирантов экономических специальностей
Москва 2009
Методическая записка. Вы работаете с учебником по английскому языку, предназначенным для студентов и аспирантов экономических специальностей. Учебник состоит из отдельных блоков, раскрывающих различные аспекты темы «Организация бизнеса». Рассматриваются основные экономические системы, роль предприятия как единицы производства, организация малого и большого бизнеса. Отдельно анализируется корпорация, ее организация, управление, финансовые аспекты деятельности. Блоки содержат списки терминов, которые должны быть усвоены в процессе работы над текстами и упражнениями. Каждый текст снабжен предтекстовыми заданиями, направленными на формирование навыков просмотрового, ознакомительного и изучающего чтения. Выполняйте эти упражнения в предлагаемой последовательности, не начинайте с перевода! Выполнив предтекстовые задания, переходите к переводу. Перевод может оказаться сложнее, чем извлечение информации из текста, но Вы должны научиться грамотно переводить. Каждый блок завершается рубрикой «Обсуждение». Задания этой рубрики следует использовать на заключительном этапе работы с текстами. Обратите особое внимание на предлагаемый в рубрике «Обсуждение» список словосочетаний. Постарайтесь запомнить их и научиться использовать в речи. Не забывайте, что грамотность речи определяется не столько количеством используемых слов, сколько их правильной сочетаемостью. Выполняя задания, направленные на обсуждение материала, смелее используйте текст. «Препарируйте» его, оформляйте свои мысли предложениями, абзацами и даже кусками текста, модифицируя их под Ваше содержание. Лучше, чем написано в тексте, не скажете! Если Вы запомните словосочетания и предложения текстов и будете активно использовать их в речи, они вскоре станут для Вас родными. Никто не вспомнит, из какого учебника и текста эти предложения, а Вы заговорите настоящим английским языком, понятным в международном экономическом сообществе. Вопреки мнению многих преподавателей, мы советуем забыть задание на пересказ «своими словами». Ваша задача - облекать свое содержание нужными Вам предложениями и даже фрагментами текста. Последовательность заданий и подача материала отражают рекомендуемую нами методику работы с учебником. Если Вам трудно справляться с предлагаемыми заданиями, работайте со специально подготовленным учебным пособием для самостоятельной работы: Демченкова О.А. «Practice Book for Independent Studies to the Course “Introduction into Professional English”», которое является неоценимым помощником при работе над текстами, подготовке к занятиям и итоговому контролю. Желаем успехов! Discussion Discussion U NIT III LARGE - SCALE BUSINESS
Glossary stock основной акционерный капитал, акция common stock обыкновенная акция preferred stock привилегированная акция to restrict ограничивать to entitle давать право to transact вести дела, заключать сделку earnings поступления, доход annual ежегодный board of directors совет директоров charter устав legislature законодательная власть to vote голосовать to pool объединять в общий фонд to raise capital/funds находить источники финансирования, привлекать средства principal капитал; сумма, на которую начисляются проценты interest rate=interest процентная ставка prospectus проспект эмиссии hire-purchase аренда с последующим выкупом to lease арендовать underwrite an issue гарантировать выкуп акций Ex. 1 Arrange these words into groups according to some principle. As long as you have a good reason, there may be several principles of grouping. Translate the words. To restrict, transaction, annual, fulfilment, to pool, holder, treatment, to pay, liable, annually, restrictive, to fulfil, routine, participation, liability, to charter, a pool, to treat, routinely, to hold, a vote, payment, to proceed, to participate, charter, restriction, to vote, to transact, proceeds. Ex. 2 Explain the grammatical phenomenon common for the following sentences. Translate them. 1. The ownership of the corporation is divided into a specified number of shares of common stock, each share representing equal participation in the affairs of the firm. 2. Control of the corporation is centralized in a board of directors, elected at the annual stockholders' meeting, each share of stock having one vote. 3. If the corporation cannot fulfil its contracts or pay its debts, it can be sued like a person, its property being taken in payment. Ex. 3 While reading the texts of this unit write down all the sentences with the words " like", " unlike". Translate them. Assignments to text 1: 1. Look through the text and formulate the main ideas. 2. Read the text and divide it into some parts. Give reasons for your division. 3. Find definitions of a corporation. 4. Read the text once more and find the sentences which explain why corporation is a “legal person”. 5. Translate the text paying particular attention to grammar. 6. Draw a chart which would reflect the classification of corporations as it is described in this text. What country can one refer this classification to? Find the sentences which indicate reference to a certain country. Text 1 The Corporation The corporation is a legal form of enterprise designed to take advantage of large-scale production methods by pooling the wealth of many people into a single enterprise while at the same time maintaining centralized control over, and responsibility for operations. Unlike partnerships, which are established by private agreement among the partners, a corporation can be established only by a charter from the state. Indeed, in the days when most farming, manufacturing, and commercial businesses were small enough to be carried on as proprietorships and partnerships, corporate charters were issued only by а special act of the state legislature. The corporation was looked upon as a very special form of business organization largely restricted to such enterprises as canal and railroad companies, for which huge agglomerations of wealth were essential. With the development of mass production technology and increase in the amount of capital needed for efficient operation, the economic advantages of the corporate form grew rapidly. When a corporation is established by a small group of owners, the owners merely contribute funds or property to the newly chartered company in exchange for shares of stock. However, it’s a promoter who undertakes to form a company with reference to a given project and to set it going, and who takes the necessary steps to accomplish this purpose. A promoter is anyone who participates or has an interest in setting up the company, but not someone involved in a purely professional capacity, such as a lawyer. The promoters are often the company’s first directors. When funds are to be raised from a large number of people, the frequently informal arrangements between promoters may not suffice. The first step for the promoters then is to formally register, or incorporate the firm. Nowadays in the USA corporate charters are issued usually by state bureaus. Corporation is a legally chartered organization that is a separate and legal entity apart from its owners. Since the corporate charter establishes the corporation as a legal entity distinct and separate from its owners, the corporation is said to be a “legal person”. That is, the firm itself is legally treated like a person and can make contracts in its own name and can sue and be sued like a real person. Corporations can be classified as domestic, foreign, or alien. A domestic corporation is one that is incorporated in the state that is doing business. In other states where it plans to do business, it must register as a foreign corporation. If it plans to do business in another country, it must be registered as an alien corporation. Corporations owned by a very small number of shareholders are called close. A close corporation is one that is privately held. That is, its stock is not traded on the stock exchanges and all the stock is held by a relatively small number of people. On the other hand, an open corporation is owned by a large number of shareholders. These corporations are also referred to as publicly held or public corporations. The stock of these corporations is traded publicly on stock exchanges. The phrase «going public» indicates a situation where private corporations offer shares of stock for sale to the general public in the hope of raising money to finance growth. The opposite of this action is indicated by the phrase «taking a corporation private». This means one or a few shareholders or corporate officers buy the stock owned by other shareholders, and a formerly open corporation becomes a close corporation. Acting like that they make a formally “open” corporation a “close” one. Assignment to text 2: 1. Read the text and explain the meaning of the word “flotation”. 2. Look through the text once more and find the words or word-combinations which would substitute the word “flotation” and word-combination “raising finance”. 3. What types of securities are described in this text? 4. Divide the text into some logical parts. Mark the key sentence for every paragraph. Make annotation of the text using the following key-patterns: · The article deals with… · As the title implies the article describes… · It is specially noted… · … is discussed in detail. · Much attention is given to… · It should be emphasized that… · The article gives a detailed analysis of… · It draws our attention to… · The text gives valuable information on… · The text is of great help to… · The article is of interest to… Text 2 Flotation. Raising Finance A company may finance its activities in a number of ways. It could simply obtain an overdraft from its bank. It could buy equipment on hire – purchase terms or lease it. For borrowing of substantial sums and/or for long-term borrowing, it will often issue bonds (debentures-Br) at a fixed rate of interest; their attraction will depend on their tax advantages and a comparison of levels of income derivable from interest rate and dividends on shares. Initial finance for most companies is provided by shares. The act of issuing shares (GB) or stocks (US) for the first time is known as floating a company (making a floatation). A company may issue shares by various methods: it could invite tenders or subscriptions directly from the public (usually through the agency of an investment bank (issuing house)). It might sell them to the investment bank, for it to resell them to the public, by issuing a prospectus or inviting subscriptions or it might place them with the investment bank, either for sale and resale to selected clients of the investment bank or for inviting clients to subscribe. The investment bank is rewarded by its profit on resale or by commission especially where it underwrites an issue. Any commission for underwriting an issue must not exceed 10 per cent. There are 3 basic types of securities: common stock/ shares, preferred stock/shares, and bonds. Common stock is shares of ownership in a corporation. Preferred stock is shares of a corporation that usually do not confer voting rights but do give preference with respect to dividends and assets. Bonds are written promises that the borrower will pay the lender at some stated future date, a sum of money (principal) and the stated rate of interest. Before buying stocks and bonds, you must understand the pricing of stocks and bonds, which are reported, in many daily newspapers.
Assignment to text 3: 1. Read and translate the headline. What information do you expect to find in the text? 2. Read the text. Have you found anything beyond your expectations? 3. Make up an outline of the text supplementing every item with key words and word combinations. 4. Find the sentences which describe advantages of a corporation. 5. Taking advantage of the text give different definitions of a share. 6. Translate the text.
Text 3 Becoming a Shareholder A person may become a shareholder by subscribing to the memorandum and having one or more shares allotted to him, or by having shares transferred to him by an existing shareholder, or by applying for shares and having them allotted to him. The ownership of the corporation is divided into a specified number of shares of common stock, each share representing equal participation in the affairs of the firm. The owners of the company called common shareholders or common stockholders receive certificates of common stock or shares in proportion to their participation in the firm. A man who invests 10 percent of the total capital receives 10 percent of the common shares. Each share entitles its holder to participate in the earnings of the firm in common with their shares. For example when there are 100, 000 shares, each share is entitled to one hundred- thousandth of any earning. Also, each share entitles the owner to one vote in the annual stockholders meeting. So, a share is an item of property and normally freely transferable. It gives its holder an interest in the company measured by a sum of money and entitles him to the rights contained in the articles. The value of shares is generally their market price. Basically, there are three values considered in assessing common stock: book value, market value, and par value. Book value is the difference between the assets of a company and what a company owes (its debts and liabilities) divided by the number of shares of common stock. Market value is the price the shares are selling for on the stock market. Par value is the value the corporation originally printed on each stock certificate. By pooling together the individual contributions of a large number of stockholders - often hundreds of thousands - a corporation can accumulate immense amounts of capital. It is free of the size limitations of the proprietorship and the partnership and can grow as large as the most efficient production technique requires.
Assignment to text 4: 1. Look through the text and explain the interconnection between the title and subtitles of the text. Suggest your own headline for the text. 2. Read the text and find the sentences which focus on differences in forms of businesses. 3. Find the sentences which describe functions of a board of directors. 4. Read the paragraph about limited liability of stockholders. Try to reduce the paragraph to 2-3 sentences which would explain the notion of limited liability of stockholders.
Text 4 Organization of the Corporation Directors and Management. In a partnership, any individual partner can transact business for the firm. In small corporations the major shareholders often manage the business but in large corporations with thousands of shareholders such an arrangement would lead to immediate chaos and a breakdown of operations. Instead, control of the corporation is centralized in a board of directors elected at the annual stockholders' meeting, each share of stock having one vote. The board elects its own officers which include a chairperson, vice-chairperson, and a secretary. The board holds periodic meetings, typically once a month. The board of directors acts on behalf of the stockholders to set corporate policy, to make major decisions, and to hire management to carry on the day-to-day operations of the firm. Profits and dividends. The profits from the operation of the firm accrue to the equity of the stockholders, and are distributed by the board of directors. The board decides how much of the profit is to be paid out to shareholders as dividends. The remainder of the profits constitutes retained earnings and is reinvested in the firm, thereby increasing the stockholders' equity. Limited liability of stockholders. In a partnership, all agreements entered into or debts contracted by the firm are personally binding on all the partners. Since the shareholder has given up all immediate control over the corporation, he must be protected in some degree from liability for its actions. This is done by defining a limit to the liability of the individual stockholder. Agreements and debts contracted by the directors and management are binding on the corporation, but not on the shareholders personally. If the corporation cannot fulfil its contracts or pay its debts, it can be sued like a person and like a person its property can be taken in payment. The stockholder can lose all he has invested in the company, but he has no personal liability beyond this. As an individual, he is in no way responsible for the debts of the company. This aspect of corporate organisation is called limited liability.
Discussion These are some useful word-combinations in addition to the glossary that you will translate, memorize and use while discussing the problems: To take advantage of (smth.), to maintain control, to develop mass-production technology, to issue corporate charter, to make contracts in one's name, to give up control, to fulfil contracts, to pay debts, to take in payments, to pool wealth (capital), to establish a corporation, to have an independent legal personality, to sue, to finance activities, to obtain an overdraft, to borrow money, to issue bonds/shares, to invite tenders, to confer voting rights, to give preference, to subscribe to the memorandum, to receive certificates of stock, to accumulate capital, to transact business, to act on behalf of (smb.), separate and legal entity, legal person, initial finance. 1. Discuss the main differences between corporations and small businesses. Use the table provided. 2. Is being a director the same as being an entrepreneur? 3. What types of securities have you learnt from this unit? Explain the difference between them. 4. What benefits can you expect being a shareholder? 5. What is a corporation? How does a corporation finance its activities?
For your notes:
Glossary stock exchange биржа to transfer перемещать, перечислять суммы to sustain(losses) потерпеть (убытки) to tap capital зд. наращивать капитал return оборот, прибыль, доход cumulative накопленный, совокупный, кумулятивный arrears (pl) задолженность, долг. to recover получать обратно, возмещать, покрывать, взыскивать, инкассировать to repay возвращать (долг), возмещать (ущерб), оплачивать leverage повышение доходности, использование заемных средств для получения дополнительного дохода, «плечо» income доход fluctuation колебание, неустойчивость utilities (pl.) предприятия общественного пользования power utilities энергетические сооружения (услуги) public utilities коммунальные сооружения (услуги) IOY=I owe you долговая расписка share capital акционерный капитал (сумма номинальных стоимостей всех акций) issued share capital выпущенный акционерный капитал collateral залог indebtedness задолженность, сумма долга Text 1 Capital
In order to operate and develop a company needs capital. Capital is the money that the company uses to run and develop business. There are two main ways in which a company can raise capital, that is find the money it needs: it can use share capital or loan capital, from investors. These are people or organizations who invest in the company; they put money in hoping to make more money. Share capital is contributed by shareholders who put up money and hold shares in the company. Each share represents ownership of a small proportion of the company. Shareholders receive periodic payments called dividends, usually based on the company’s profit during the relevant period. Capital in the form of shares is also called equity. Investors can also lend money, but then they do not own a small part of the company. This is loan capital, and an investor or financial institution lending money in this way is a lender. The company borrowing it is the borrower and may refer to the money as borrowing or debt. The total amount of debt that the company has is its indebtedness. The sum of money borrowed is the principal. The company has to pay interest, a percentage of the principal, to the lender, whether it has a profit in the relevant period or not. Many companies have both loan and share capital. The amount of loan capital that a company has in relation to its share capital is its leverage. Leverage is also called gearing in BrE. A company with a lot of borrowing in relation to its share capital is highly leveraged or highly geared. A company that has difficulty in making payments on its debt is overleveraged.
Assignment to text 2: 1. Look through the text and formulate the main issues of it. 2. Make an outline of the text. 3. What are the main types of corporate finance? 4. Find the sentences which explain the differences between the types of finance. 5. Look through the text once more and enumerate advantages of debt financing. Contrast them to advantages of equity financing. 6. Translate the text.
Glossary сash наличные деньги suffice быть достаточным, хватать to retail продавать в розницу at retail в розницу at wholesale оптом to issue выпускать holding вклад, пакет (ценных бумаг) lack of smth. недостаток, нехватка to lack smth. испытывать недостаток to encourage поощрять, поддерживать pending рассматриваемый, находящийся на обсуждении to disclose освещать, раскрывать claim иск, претензия to underwrite гарантировать выкуп ценных бумаг outstanding нереализованный, выпущенный в обращение remuneration вознаграждение transaction сделка
Ex.1 Building your business vocabulary is very important. Some new business terms introduced in this unit are printed below, along with definitions. Please match each with its proper definition after reading the texts of this unit. a) securities exchange b) bear market c) cash dividend d) securities market e) bull market f) brokerage house g) speculative trading h) prospectus 1. The millions of people and organization that buy stocks and bonds and the securities intermediaries who bring buyers and sellers together. 2. A cash payment to shareholders. 3. A firm that buys and sells securities on behalf of its investor-clients. 4. An institution set up by brokers at a permanent location for buying and selling securities. 5. A summary of the securities registration statement that is filed with the SEC; it contains information about the firm’s operation and management, the purpose of the proposed issue, and anything else that would be helpful to potential buyers of securities 6. The buying and selling of securities in the hope of profiting from near term changes in their prices. 7. A stock market in which prices are falling, and there is pessimism among speculators. 8. A stock market in which prices are rising and there is much optimism. Assignments to text 1: 1. Read the text and write down into your notebook the English equivalents for the Russian “потенциальный акционер/покупатель”. 2. Read the first paragraph and try to formulate the main idea, give the subtitle to it. 3. Read the second paragraph, and explain how the main idea of the first paragraph is developed. 4. Look through the 3rd paragraph and explain in what connection non-financial terms “retail” and “wholesale” are used. 5. Translate the text. Text 1 Investment Banks When a corporation is established by a small group of investors, the owners merely contribute cash or property to the newly chartered company in exchange for shares of stock. When funds are to be raised from a large number of people, however, this informal arrangement will no longer suffice. The people founding or promoting the corporation do not know who the would-be shareholders are. Nor can the prospective buyer of only a few shares of stock afford to spend time and money hunting for a company in which to invest. Bringing would-be investors and investment opportunity together is the job of the specialized financial institution called an investment bank. Investment banks are what might be called " retailers" of corporate securities. They take blocks of stocks or bonds from the corporation " at wholesale" and break them into smaller holdings to sell " at retail" to the final owner. The investment bank collects a commission for performing this service. The same procedure is followed when an existing corporation issues new shares to increase its capital by expanding its ownership. Advertisements by investment banks announcing the availability of new issues of securities are often seen in the financial pages of newspapers. Investment banks help small companies “go public”. That is, they help businesses that want to sell shares of stock to the public. The investment bank must decide whether it will underwrite the new public offering of stock. Underwriting means that the investment bank guarantees to purchase the stock. The investment bank then contacts various brokerage houses. Brokerage houses are firms that buy and sell securities on behalf of their investor-clients. They explain the offering to them. So, investment banks deal with both individuals and brokerage houses. Thus, an investment bank is a financial institution that does not accept deposits from the general public but instead helps firms sell new issues of stocks and bonds. They also help firms to acquire other firms or to be acquired. Assignments to text 2: 1. Look through the 1st paragraph and explain what the word combination “blue sky laws” means. 2. Read the second paragraph. Find the word " these" in it; indicate the nouns it stands for. 3. Read the text and prove by the facts that information has a high price. 4. Find and translate the paragraph in which the functions of SEC are described. 5. Read the text once more and say if the securities market is safe in the USA.
Text 2 Securities Regulation State and federal laws in the USA regulate both the insurance and the trading of securities. At the state level there exist blue-sky laws. Blue-sky laws are state laws that force corporations to give potential investors certain facts about the securities. Their purpose is to prevent corporations from issuing worthless securities to unsuspecting investors (selling them “the blue sky”). At the federal level the Securities Act of 1933 protects the public from interstate sales of fraudulent securities. The Securities and Exchange Commission. The buyer of a security invests his wealth to become one of the owners of the firm. Yet he is often remote from the actual operation of the company, and may lack the information necessary to make a sound judgement concerning the investment. Frequently all he knows about the company and its prospects is what the management or the investment banker tells him. Since these have special interest in encouraging him to buy the stock, he needs some assurance that he is being told everything he needs to know. Making sure that perspective stockholders are fully informed is one of the duties of the Securities and Exchange Commission (SEC), a federal agency established by the Securities Exchange Act of 1934. Before a corporation can offer a new issue of securities for sale to the public, it must file a registration statement and a prospectus with the Commission. The registration statement must disclose such matters as “the names of the persons who participate in the management or control of the business; the security holdings and remuneration of such persons; the general character of the business, its capital structure, past history and earnings; underwriters' commissions; payment to promoters made within 2 years or intended to be made; the interests of directors, officers and principal stockholders in material transactions; pending or threatening legal proceedings; the purpose to which the proceeds of the offering are to be applied; and financial statements certified by independent accountants." The prospectus is part of the registration statement and embodies the more important of the required disclosures. The SEC staff examines the registration statement and prospectus for accuracy and completeness. Unless it is found to be misleading, inaccurate, or incomplete, the registration becomes effective, and the security can be offered for sale.
Assignments to text 3: 1. Read the text. 2. Find the key sentences in every paragraph. 3. Find answers to the following questions. · What is the function of a stock market? · What are the main players in a stock market? · What stock markets are described? · What is the difference between the two types of the stock market? 4. Identify all the definitions in the text. 5. Find the sentences which explain regulations for stock exchanges. Text 3 The Stock Market A stock market consists of brokers, dealers, and organized exchanges whose function is to facilitate the transfer of securities from one private owner to another. The corporation itself is not a party to transactions in its securities on the stock market, nor are stock markets places where corporations raise capital. The function of the stock market is, rather, to provide the easy transferability of ownership that characterizes the corporate form of business organization. There are two distinct types of stock market. (1) Securities that are less frequently traded are generally bought and sold through the facilities of the over-the-counter market. (2) The organized stock exchange is set up for the purchase and sale of a selected list of securities that are usually traded in large daily volume. The Over-the-counter Market Once a stock or bond has been issued, its owner is entitled to sell it to anybody else, at any time, at any price that can be agreed on. The transaction can be completed privately, but most people enlist the services of a specialized middleman. An over-the-counter dealer plays essentially the same role in the securities market that a used car dealer does in the used car market. He buys securities from individual owners for resale to others at slightly higher prices, getting his commission from the difference between the buying and the selling prices. Since over-the-counter dealers are organized into a National Association of Security Dealers, there is a nationwide competitive market. Most securities are unlisted. Quotations of security prices being paid (bid) and charged (asked) by dealers are published in the daily financial pages. Organized Stock Exchanges As in any other part of the economic system, greater specialization in securities trading is possible in more extensive markets. Securities that are bought and sold in large volume every day are traded through highly organized special markets called organized stock exchanges. A stock exchange (or a securities exchange) is an institution set up by brokers at a permanent location for buying and selling securities. The securities bought and sold at these exchanges are called listed securities. An organized stock exchange is an institution with a limited membership, whose members are permitted to trade securities with each other. Since only members are permitted to conduct business on the exchange, others who want to buy or sell in this way must employ members to act on their behalf. Trading among members of each exchange is restricted to a special list of securities and the stocks and bonds of corporations not listed on the exchange cannot be bought or sold there. Each exchange has established rules governing which securities can be listed for trading. Among other requirements, securities are listed only if they are traded in sufficient volume to make it worthwhile. In addition, before a security can be listed, it must have been outstanding long enough to have «seasoned». Securities of young companies, for example, are not listed. Moreover, the listed corporation must agree to file certain reports with the SEC (Securities and Exchange Commission). There is an organized stock exchange in almost every major U.S. city, but most of these are small and limit their lists largely to the securities of local firms. The securities of most large, nationally known corporations are traded on the two large New York exchanges: the New York Stock Exchange and the American Stock Exchange. The New York Stock Exchange (NYSE) is the most important U.S. Securities exchange and one of the three largest exchanges in the world. The American Stock Exchange (AMEX) is also a national exchange, but it is smaller than NYSE.
Text 4 Learn How to Read a Stock Price Quotation Stock and Bond prices – the prices of stocks and bonds on the securities exchange and the over-the-counter market are reported in many daily newspapers. Stock Prices - several important kinds of information are presented in a stock quotation. 1. The stock quotation usually starts with the stock’s 52 week high and low. 2. The stock’s name is then presented in abbreviated form. 3. Next is shown the annual dividend and then the yield (interest rate) the stock is paying. 4. Next is the price earnings ratio and then the total number of shares traded. 5. The next two columns typically show the high and low price on the date shown and the closing price. Bond Prices are expressed in terms of 100, although most bonds have a par value of $1000. Stock and Bond prices Averages—lists show the average price of a group of stocks or bonds.
Assignment to text 5: 1. Read the text given in a jumbled order and put the paragraphs in the correct order. 2. How many logical parts can you distinguish? 3. Match the following headings with the parts: · Don’t make a costly mistake! · Why are the pyramid schemes dangerous? · What is a pyramid scheme? · How does the pyramid work?
Text 5 The Pyramid Scheme. Don`t make a costly mistake! - Thousands of Americans have lost millions of dollars participating in pyramid schemes. Many of the victims knew they were gambling (although they didn’t know the odds were rigged against them). Many others, however, thought they were playing for help in starting a small business of their own. These people were fooled by pyramid schemes disguised to look like legitimate businesses. - In reality, however, the supply of participants is limited, and each new level of participants has less chance of recruiting others and a greater chance of losing money. - Things you should know about pyramid schemes: · There are losers. Pyramiding is based on simple mathematics: many losers pay a few winners. · They are fraudulent. Participants in a pyramid scheme are, consciously or unconsciously, deceiving those they recruit. · They are illegal. - To join, you might have to pay anywhere from a small investment to thousands of dollars. For example, $1000 buys a position in one of the boxes on the bottom level. $500 of your money goes to the person in the box directly above you, and the other $500 goes to the person at the top of the pyramid, the promoter. If all the boxes on the chart fill up with participants, the promoter will collect $16000, and you and the others on the bottom level will each be $1000 poorer. When the promoter has been paid off, his box is removed and the second level becomes the top of payoff level. Only then do the two people on the second level begin to profit. To pay off these two, 32 empty boxes are added at the bottom, and the search for new participants continues. - Of course, the pyramid may collapse long before you reach the top. In order for everyone in a pyramid scheme to profit, there would have to be a never-ending supply of new participants. - Each time a level rises to the top, a new level must be added to the bottom, each one twice as large as the one before. If enough new participants join, you and the other 15 players in your level may make it to the top. However, in order for you to collect your payoffs, 512 people would have to be recruited, half of them losing $1000 each. - The purpose of this discussion is to help you avoid falling victim to pyramid schemes, whether simple or disguised. Simple pyramid schemes are similar to chain letters, while disguised pyramids are like wolves in sheep’s clothing, hiding their true nature in order to fool potential investors and evade law enforces. What is a pyramid scheme? - Pyramid schemes are illegal scams in which large numbers of people at the bottom of the pyramid pay money to a few people at the top. Each new participant pays for the chance to advance to the top and profit from payments of others who might join later.
Discussion: These are some helpful word-combinations in addition to the glossary that you should translate, memorise, and use while discussing the texts: to contribute cash, to raise funds, to spend time and money, to make a sound judgement, to collect a commission, to follow a procedure, to examine for accuracy, to take at wholesale, to sell at retail, to perform a service, to disclose information, to lack information, to offer for sale, to become effective, to contact brokerage house (broker), to complete a transaction. 1. Discuss the functions and the role of investment banks. 2. Explain what SEC is and its role in business. 3. Draw a line of comparison between the American securities market and the Russian one. 4. What do you think about the system of securities regulation in the USA and in Russia? Compare the systems. 5. Investigate securities scandals in the USA and Russia. Include in your report the background of each, how the business was organized, for how long the pyramid existed. For your notes: Glossary to evaluate оценивать account счет (банковский) accounts (pl.) расчеты, отчетность, сводка accounts receivable (AmE)= счета дебиторов (в балансе), debtors (BrE) дебиторская задолженность (сумма), счета к получению accounts payable (AmE)= счета кредиторов (в балансе), creditors (BrE) кредиторская задолженность (сумма), счета к оплате accountant бухгалтер accounting бухгалтерский учет balance sheet балансовый отчет bill счет (к оплате), вексель excise акциз, акционерный сбор, лицензия income statement отчет о доходах liabilities денежные обязательства assets and liabilities активы и пассивы intangible assets нематериальные активы tax налог depreciation амортизация, снижение стоимости permanence неизменность, прочность постоянство entry бухгалтерская проводка, запись expense account cчет подотчетных сумм petty cash мелкие суммы, статьи (прихода, расхода) payroll фонд зарплаты (предприятия) receipt расписка в получении, квитанция invoice счет-фактура, (товарная) накладная Ex. 1 Translate the following word combinations. Mind the model " N oun +Noun+(Noun)”. business firm, market value, retail trade, wholesale trade, revenue service, business tax, company reputation, cash assets, bank account, cash reduction, profits tax, unit cost; production-line economy, mass-production technique, income tax return, production-line basis, business opportunity, payment terms. Ex. 2 Read and translate the following definitions. Find Russian equivalents for the underlined words. An asset is something that has value, or the power to earn money. These include: 1. current assets: money in the bank, investments that can easily be turned into money, money that customers owe, stocks of goods that are going to be sold. 2. fixed assets: equipment, machinery, buildings and land. 3. intangible assets: things which you cannot see. For example, goodwill: a company's good reputation with existing customers, and brands: established brands have the power to earn money. Liabilities are a company's debts to suppliers, lenders, the tax authorities, etc. Debts that have to be paid within a year are current liabilities, and those payable in more than a year are long-term liabilities, for example bank loans. A company's balance sheet gives a picture of its assets and liabilities at the end of a particular period, usually the 12-month period of its financial year. This is not necessarily January to December.
Ex. 3 Make sure you remember the following words. Pay attention to the sentences with these words to see how to use them correctly. income – доход, приход (за какой-либо период) revenue – доход, источник дохода, (множ.) доходные статьи. receipts – денежные поступления, выручка, доход earnings – заработок, трудовой доход, доход, прибыль, поступления
Ex. 4 Building your business vocabulary is very important. Some new business terms introduced in this unit are printed below, along with definitions. Please match each with its proper definition after reading the texts of this unit. a) asset b) liability c)owner's equity d) balance sheet e) capital stock f) retained earnings g) revenues h) expenses i) income statement g)current liability k) accounting. 1. A financial statement that shows what a firm owns, what it owes, and what the owner's equity is worth at a given point of time 2. A claim held by someone against a firm's assets. 3. A financial statement that summarizes revenues, expenses, and net profit or loss. 4. The original investment of the stockholder-owners. 5. The amount of resources used by a firm in the pursuit of revenues, 6. Whatever a firm, organisation, or person owns that has a dollar value. 7. The amount of cash or accounts receivable a firm receives in payment from others over a period of time. 8. The amount of a firm's assets minus the amount of its liabilities, 9. The profits the firm has plowed back into the firm. 10. A debt that will be paid off within a year of the balance sheet date. 11. The process of measuring, interpreting and recording data that reflect the financial condition of a firm. Ex. 5 Based on the meaning of the following synonyms, choose the most appropriate word for making sentences with the phrases below e.g: Builders provide to their clients an estimate of construction costs before actually beginning the work. Estimate – implies a judgement, considered or casual, that precedes or takes place of actual measuring or counting or testing out; Appraise – commonly implies the fixing by an expert of the monetary worth, but may be used of any critical judgement; Evaluate – suggests an attempt to determine either a relative or intrinsic worth of smth in terms other than monetary; Assess – implies a critical appraisal for the purpose of understanding or interpreting, or as a guide in taking action. · The ability of students for awarding rates. · Real estate (at certain sum) for tax purposes. · Damages (at certain sum) for preparing a lawsuit. · The amount of income for completing tax returns. · A person at their face value. · The cost of work for negotiations with a client. · The potential of an employee for a preliminary report to the management. · The outcome of a proposed business strategy for reporting to a stockholders’ meeting · The costs of an implementing a new production technique before a detailed analysis. · A diamond for setting a price. · A company for investment purposes. · A business proposal for drawing up a contract.
Assignment to text 1: 1. Read the following abstract from the interview. Find answers to the following questions: · What activity is the company involved in? · What profession is described? · What functions do employees of the company perform? · What is the difference between an accountant, a book-keeper and an auditor? Text 1 Interview of an Accountant Hi, I'm Fiona and I'm an accountant. I have received professional training in the field of accounting. As an accountant I’m involved in the design and maintenance of a system of financial records and the interpretation of the data contained in them. I work in Edinburgh for one of the big accountancy firms. We design bookkeeping and accounting system. We also construct and interpret financial statements. It’s accountant who can tell what financial statements mean. Moreover, we look at the financial records or accounts of a lot of companies. We work with the accountants of those companies, and the people who work under them: the bookkeepers. Bookkeepers usually do not have as much training as accountants. They record the day-to-day transactions of the company in the proper account. Obviously, accounting is more sophisticated than bookkeeping. Sometimes we act as auditors - specialist outside accountants who audit a company's accounts, - that is, we check them at the end of a particular period to see if they give a true and fair view (an accurate and complete picture). An audit can take several days, even for a fairly small company. When a company's results are presented in a way that makes them look better than they really are, even if it follows the rules, it may be accused of creative accounting or window dressing. Of course, I never do this! I like my profession- accountancy. Assignment to text 2: 1. Read the text and find answers to the following questions: · What is the main function of accounting? · What is considered to be basics of accounting? · What can be considered as a toolkit for accounting? 2. Read the text once more and identify the sentences-definitions. 3. Find the paragraph in which double-entry book-keeping is explained. Reduce it in order to give a short and clear explanation. 4. Translate the text.
Text 2 Accounting One of the critical components of the operation of a business is a timely and accurate system of accounting that an entrepreneur or a company needs to consider. The entrepreneur needs to understand the accounting equation: assets= liabilities + owner’s equity. Within these three areas accounts are divided by: 1) assets, 2) liabilities, 3) owner’s equity or net worth, 4) revenue, and 5) expenses. The accounting procedure utilized in a basic accounting system is the double entry bookkeeping cycle. Each transaction account has two sides, the debit or left side and the credit or right side. Increases in asset accounts are recorded as debits. Increases in liability and owner’s equity accounts are recorded as credits. Revenue increases are recorded as credits since they increase the equity. Increased expenses are recorded as debits because they decrease the equity. The balance of an account is the difference between total debits and credits. Asset and expense accounts normally show debit balances; and liability, owner’s equity, and revenue accounts usually show a credit balance. It’s necessary to determine the accounting period over which the financial activities of the business are measured. This can be a fiscal year beginning at any given time during a year and lasting for 12 months. It can also run the length of a calendar year. Once these basics are understood and decided upon, the business owner will need to develop and utilize source documents to keep track of transactions. These source documents can include the following: daily summary of cash and sales activities, deposits and withdrawals from accounts, petty cash vouchers, payroll records, receipts, invoice vouchers and purchase vouchers. After these source documents have been organized, transactions will be recorded in books. Periodically information from the books is compiled into financial statements. These three basic financial statements are an income statement, a balance sheet and a statement of changes. The income statement compares revenues and expenses by identifying profit or losses. A balance sheet shows the status of assets, liabilities and equity accounts on a given day. A statement of changes in financial position indicates where money has come from and where it has gone from the beginning of an accounting period to the end.
Assignments to text 3: 1. Translate the headline of the text 2. Read the text and say what the main types of financial statements are. 3. Look through the text and find all the sentences which clarify the differences in the financial statements. 4. Look through the text and find explanations of the following: · balance of an account · application of funds · source of funds 5. Translate the text. Text 3 Financial Statements The complex organisation of a modern firm makes it important to keep systematic records of the claims of different classes of people against it. The accounting instrument employed for this purpose is called a balance sheet, or a statement of financial position. On the left side of the sheet are listed all the wealth and all the claims to wealth owned by the firm, together with the value of each. These are the firm's assets. Assets are usually classified and listed in order of their liquidity, that is, by the ease with which they can be converted into money. Cash and bank accounts, the most liquid assets, are listed at the top, with accounts receivable (bills due from customers and others), which are somewhat less liquid next, and land and buildings that take time and trouble to sell listed last. On the right side of the balance sheet are listed all the claims against the firm's assets, 1iabi1ities and debts owed to people outside the firm. They are listed first and usually listed according to their permanence. Current liabilities, which are least permanent, include bills and accounts payable to individuals and to other firms, amounts owed to banks on short-term notes, payroll due to workers, and other debts due to coming in the immediate future. Outstanding bonds are a longer-term liability. The residual, or balance, left over after subtracting all liabilities from the total value of assets, is the ownership equity. The statement is called a “balance sheet” because the total of the claims must exactly equal, or balance, the total of, the assets. There is, of course, nothing mysterious about this. It simply means that whatever part of the value of the assets is not owed to somebody else is automatically part of the owners’ equity. The balance sheet summarises the firm's financial position at a given moment of time and it necessarily changes from moment to moment to reflect the changes in that position as the firm does business. As the balance sheet summarizes the financial position of the firm on a given date, the income statement summarizes the firm's productive operations during a given period of time, usually a fiscal year. The income statement is a systematic summary of revenues and costs, organized to enable owners to see how the firm has operated. It gives figures for total sales or turnover (the amount of business done by the company during the year) and for costs and overheads. The first figure should be greater than the second: there should generally be a profit – an excess of income over expenditure. Part of the profit is paid to the government in taxation, part is usually distributed to shareholders as a dividend, and part is retained by the company to finance further growth, or repay debts, to allow for future losses, and so on. Although accountants differ in the exact arrangement of items and in the amount of detail given, the essence of the income statement is to show the year’s total receipts, total costs and profit. The statement also shows the allocation of profit between dividends and retained earnings, and the distribution of the dividends among the different classes of shareholders. In fact, the income statement can be reorganised to show the value added by the firm’s operations and the distribution of this value among the different participants in production. A third financial statement has several names: the statement of changes in the USA, the source and application of funds statement, the source and uses of funds statement, the funds flow statement, the cash flow statement, the movement of funds statements. As all these alternative names suggest, this statement shows the flow of cash in and out of the business between balance sheet dates. Sources of funds include trading profits, depreciation provisions, borrowing, the sale of assets, and the issuing of shares. Applications of funds include the purchase of fixed financial assets, the payment of dividends and the repayment of loans, and, in a bad year, trading losses. If a company has a majority interest in other companies, the balance sheets and profit and loss accounts of the parent company and the subsidiaries are normally combined in consolidated accounts.
Assignment to text 4: 1. Look through the text concentrating on the word “audit” and its derivatives. 2. Write down the main issues of the text 3. Read the text once more, check and correct your list of issues if necessary. 4. Divide the text into paragraphs to make it easier for comprehension. Try to restructure the text accordingly. 5. Read and translate the following words and word combinations: accuracy, annual general meeting, board of directors, checking, deficiencies, determine, deviations, directives, external, implemented, ratified, shareholders (GB) or stockholders (US), standard operating procedures, subsidiaries, a synonym, transnational corporations (TNC) Discussion These are some useful word-combinations in addition to the glossary that you should translate, memorize, and use while discussing the questions: majority interest, internal audit/auditor, audit report, timely and accurate system, accounting equation, double-entry bookkeeping, accounting period, financial activities, source documents, daily summary, accounting instrument, current liabilities, longer-term liabilities, longer-term liability; to keep records, to convert smth. into money, to list according to permanence, to subtract liabilities, to summarize financial position, to pay bills, to issue new shares, to distribute dividends, to measure activities, to develop source documents, to utilize source documents, to keep track of transactions, to reflect the changes, to finance growth, to repay debts, to allow for future losses, to verify execution.
1. Have you had courses in accounting or bookkeeping? Do you enjoy this type of work? 2. Did you ever have to keep detailed records of anything? Did you enjoy doing so? 3. To what end users does the information compiled by accounting system flow? 4. What are functions of the financial statements of a firm? 5. If you were an investor, what are some ways in which you would use the financial statements of a firm before investing in it? 6. What are the two categories of auditors? 7. What is the main function of auditing?
For your notes:
Glossary to devolve (powers) передать (полномочия) chart схема, таблица, график subsidiary дочерняя компания, филиал crucial решающий, ключевой, критический to cast a vote отдавать голос (на выборах), опускать избирательный бюллетень to wind up ликвидировать, завершать to dispose (of) избавляться, передавать, продавать remuneration вознаграждение, оплата motion предложение (на собрании) proxy полномочие, доверенность, передача голоса или полномочия poll голосование, число голосов, регистрация избирателей
Ex. 1 Translate the following pairs of words. Explain the meaning of prefix -dis. Advantage - disadvantage; approval - disapproval; comfort - discomfort; ability - disability; order - disorder; closure – disclosure. Ex. 2 Translate and use the following word-combinations in sentences.of your own: lack of time - to lack time; lack of money - to lack money; lack of words - to lack words; lack of opportunity - to lack opportunity; lack of finance - to lack finance lack of skills – to lack skills lack of specialists - to lack specialists. Ex. 3 Pronounce correctly and translate the words that are often confused. Value - volume; properly - property; track - truck; cast - cost; effort - afford; adopt - adapt, work - walk, sell - sail - sale, pure- poor, law - low, pool- poll.
Ex. 4 Replace the italicized with appropriate synonyms: 1. The shareholders’ meeting is scheduled for the first Tuesday in March. 2. The CEO will report on the company’s day-to-day work. 3. He will comment on various data illustrating the firm’s activity in the period under review. 4. He will disclose the latest assessment of all that the corporation owns. 5. The Chief Financial Officer will speak about the company’s progress using the language of figures. 6. He will give his judgement as to the prospects of future growth. 7. The Legal Director will summarize measures taken to ensure that all records comply with the new legislation. 8. Specifically, he will explain the reason for the new, and more detailed and complicated organization of the overseas branches. 9. One of the items on the agenda concerns measures stimulating the staff to work better. 10. The shareholders will vote on issues involving strategic planning and profit distribution.
Assignment to text 1: 1. Read and translate the title of the text. 2. What information is likely to be found in this text? 3. Read the text. What is the subject? 4. Was your guess shrewd? 5. After the second reading of the text give a suitable Russian equivalent for the following: · a corporate person · day-to-day administration · articles of association · to retain the ultimate say 6. Look through the last paragraph. What is the author’s thesis on the relationship between the general meeting and the board? 7. Translate the text.
Text 8 If you look at the picture you will see the organizational structure of a company «Rossomon», which might appear typical for most western companies. We see that the Managing Director is responsible for running the company and is accountable to the Board. He is assisted by four executive departments. These are Human Resources which is responsible for personnel, training and management development; then there is the Finance Department which takes care of corporate finance and accounting; next we have the Management Services Department the head of which is in charge of rationalization throughout the company; and finally there is the R & D Department – research and development – which works closely with the five regions on new product development. So this brings us on to the regions. Directly under the Managing Director, there are five Regional Managers. Each of them is responsible for the day-to-day management of a territory – these are geographically split into North, South, East, West and Central Regions. Now then, the five regions are supported by two sections – Marketing and Technical Services. They are organized on a matrix basis with section leaders accountable to the Regional Managers. They work closely with the regions on the marketing and technical side. Now in addition to the parent company, the Rossomon has three subsidiaries, namely Rossomon France, Germany and Japan. The subsidiaries report to the Export Sales Department, which in turn is accountable to the Board. This is a brief overview of a typical company structure.
Assignment to text 9: 1. Read the text and choose the best headline out of the following: · Concentration of control · Mechanism of control · Management control Give reasons for your choice, suggest your own headline. 2. Read the text once more and find information on the issues suggested as headlines. 3. Find answers to the following questions: · How are company decisions taken? · How do minority shareholders participate in making decisions? · What is a management-controlled corporation? 4. Translate the part explaining the use of proxies.
Text 9 Absolute control over a corporation is guaranteed by ownership of one more than half the voting shares. If the capital of the company is $10 million, represented by 100, 000 shares of common stock, absolute control requires ownership of 50, 001 shares, an investment of $5, 000, 100. If, however, half the firm's capital is provided by bonds and preferred stock, neither of which is entitled to vote, absolute control can be exercised by ownership of only 25, 001 shares of common stock, requiring an investment of only $2, 500, 100. The shareholder, depending on the size of his shareholding, is generally able to participate to some extent in company decisions by voting at meetings but he must bow to the will of the majority if that goes against him. His rights depend in part on articles of association which may be altered. At root, company decisions are taken by the members, meeting together and deciding by a majority vote, however large that majority may have to be for a particular issue. The members may and generally do, devolve the power of decision to the board of directors, in which case they may positively have to take it back again before they can exercise it themselves. Again, however, it is the members deciding by majority weather their power is to be devolved or reclaimed. Generally speaking, this practice makes sense. In fact corporate control is often exercised by people without a majority control. When ownership of common stock is widely dispersed over thousands of people, each holding only a few shares, their participation in running the company is limited to sending in proxy votes to be cast on their behalf by representatives of the controlling management group. In such a case, a concentration minority block of shares can exercise control. As a matter of fact, the common stock of many modern corporations, including some of the very largest ones, is so widely dispersed that no individual stockholder or group holds more than a small fraction of the total number of shares. This leaves effective control in the hands of the management itself, for no individual stockholder has either enough votes to affect the outcome of a stockholders’ meeting or enough information about the operations of the firm to make an intelligent decision. Since the existing board of directors prepares the agenda for the stockholders’ meetings, it has exclusive power to decide what policy issues are to be voted on. It also nominates the slate of new directors to be elected to the board and hence is a self-selected, self-perpetuating body. Of course, the stockholders must vote on the policy matters and must elect the new directors, but this is accomplished by the use of proxies. The management has the power to mail material (at company expense) to each stockholder, explaining its position on the matters to be voted on and urging the election of its nominated slate of officers. The stockholder's participation is limited to filling out and mailing back the proxy to be voted by the management on his " behalf". In a very real sense, management control represents the ultimate in " leverage", for it permits control of a vast empire of capital and the economic, social, and political power that goes with it, by a group with practically no investment at all. The stockholders of a management-controlled corporation are relegated to a position as outsiders, more like creditors of the firm than like owners in the old-fashioned sense of the word. Discussion These are some useful word combinations in addition to the glossary that you should translate, memorize, and use while discussing the questions: to make a sound judgment, to follow procedure, to exercise control, to cast votes on one’s behalf, to effect the outcome, to make an intelligent decision, to elect directors, to mail material, to record in articles of association, to take effect, to provide a forum, to be entitled, to devolve powers to, to retain an ultimate say, to override wishes, to follow the lead, to give effect, to issue orders, to enter/abandon markets, to thin the ranks, to bridge levels of organization, to supervise the work, to hire/maintain/discharge employees, to design compensation and benefits system, to formulate performance appraisal systems, to have basic familiarity with smth, to provide specialized expert advice. Overall strategy, operating policy, external environment, inventory management, significant source, primary duties, a show of hands, low-performing worker.
1. Explain the mechanism of control concentration in a big company. 2. Compare positions of the stockholders and the board of directors? What are their relations if there are any? 3. Speak about the board of directors and its functions. What traits of character must directors possess to manage a corporation? Use the word-lists from your notebooks. 4. How are major decisions taken in a corporation? 5. Speak on how the majority rule works. 6. What is the relationship between the general meeting and the board? 7. A corporation’s board of directors is supposed to represent the interests of the shareholders. The chief executive officer (CEO) is often a member of the board, perhaps its chairperson. Futhermore, members of the CEO`s top management team are often inside directors. Is there a conflict of interest here? Explain. 8. Draw a chart of texts 4, 5 and 6 to make management system clear. 9. Draw the structure of some successful company. Describe it taking advantage of text 8 as a sample. Use the following word-combinations: to run a company, to be accountable to smb., to be responsible for, to take care of, to work closely with, to be in charge of, to assist/ to be assisted, to support/to be supported, to work closely with. 10. Do you agree with the following statement? Suggest how to avoid disorder and malperfomance in a company. “The only things that evolve by themselves in an organization are disorder, friction and malperformance”. Peter Drucker
Glossary minority меньшинство, меньшая часть mining горная промышленность, горное дело to can консервировать output выпуск, продукция, общий объем производства to elaborate детально разрабатывать, вырабатывать, развивать, дополнять performance зд.: характеристика работы, работа purchasing закупка in terms of (numbers) языком (цифр), с точки зрения (цифр)
Ex. 1 Translate the following sentences. Explain the difference in using the word “can”. 1. The engineering efficiency of the plant can be high with innovative staff. 2. Much could be said about shortage of people with the combination of ability, imagination, energy, discipline required for effective enterprise. 3. To can a poor quality of fruit, or to pack it in cans of the wrong size, or to can too much or too little can destroy the market. 4. Somebody must keep in constant touch with the many markets for canned fruit. 5. Another special advantage of size is that a large firm can employ nationwide advertising in radio, television, and other media.
Ex. 2 Read and translate the following sentences paying attention to use of the verb “to keep". 1. The complex organization of a modern firm makes it important to keep systematic record of the claims of different classes of people against it. 2. Somebody must keep track of crops in different areas and know when and where it will go. 3. Division of labor necessary for most effective use of management ability requires a workload large enough to keep manager employed in their fields. 4. Full-time staffs of any efficient company can be easily kept busy in a large productive operation. 5. Somebody must keep in touch with prospective clients. 6. Differences in the type of business organisation are in keeping with the requirements of efficient production.
Ex. 3 Consult a dictionary, translate the sentences paying attention to the underlined word. 1. The law now enables holders of securities to act intelligently on the matters involved. 2. The stockholders must vote on the policy matters. 3. Engineering efficiency and production line economy are not all that matter s. 4. All matter may be classified as either solid, liquid or gas. 5. The principle of classification is the thing that matters. 6. Organized stock exchanges permit the transfer of the stocks of many corporations in a matter of hours.
Ex.4 Translate the following sentences using the model. Model: It takes an _hour to get to my house. Чтобы добраться до дома, мне требуется час. 1) It may take months to find the right man. 2) It takes more enterprising talent and organising skill to start a successful business than it does to keep one going after it has been set up. 3) It takes a large firm to give full employment to the talents of such people. · Make up your own sentences using the model.
Assignments to text 1: 1. Read the text. Scan for figures in the text. Say why the text is rich in figures. 2. Read the text and write down the topic of each paragraph. 3. Read the text and identify the sentences and words which signal contrast or comparison. 4. What are the things that are compared or contrasted? Give a headline to every paragraph. Don’t you think that the text needs editing? Try to rearrange the sentences.
Text 1 The Number of Corporations In terms of numbers, corporations represent a small minority of U.S. business firms. In fact, 80 percent of the 11 million business firms now active in the U.S. are sole proprietorships, and another 8 percent are partnerships. Proprietorships are especially numerous in the farming, retailing, and service industries, where there are many family-sized firms. Even in mining and manufacturing, however, there are more sole proprietorships and partnerships than corporations.
The Size of Corporations However, when we look at size and economic importance rather than numbers, we find that the 12 percent of all firms that are corporations receive nearly 80 percent of total sales revenue. Even in retail trade, where many small stores are operated by their proprietors, corporations do 50 percent more business than partnerships and proprietorships combined. The biggest contrast between numbers and sales appears in transportation and public utilities. While 84 percent of the firms in this industry are sole proprietorships and partnerships, these are mostly owner-operated taxis and trucks. Corporate truck and bus lines, railroads, airlines, and telephone, gas, and power utilities sell more than 90 percent of the total output. Only in agriculture is the total volume of corporate sales relatively small. Even so, while only 1 percent of agricultural firms are incorporated, these corporations account for 14 percent of the value of agricultural product sold. Differences in the type of business organization that predominate in different industries are in keeping with the requirements of efficient production. Sole proprietorships predominate where technology permits economic operation with no more capital than a single enterpriser can command; corporate organization is found where the scale of production requires the combined capital of many people.
Assignments to text 2: 1. Read the text and explain why it is necessary to distinguish between the size of a firm and the size of a plant. Identify the key sentences which help to understand it. 2. Read the text once more and answer if giant corporations are economical. 3. Translate the paragraph which provides an example. What statement does it support? 4. Read the first sentence of the last paragraph and formulate the point which “is increased”. 5. Write down a concluding paragraph of 2-3 sentences which would make the text completed.
Text 2 Size of Firm vs Size of Plant In evaluating giant firms, it is necessary to distinguish carefully between the size of the firm and the size of the individual physical factories, plants, or establishments that the firm owns and operates. Efficient production requires individual plants large enough to use expensive specialized equipment and to employ specialized workers. This means that firms must be large enough to own and operate these large plants. Once the firm is operating the most economical plant, however, there is no increase in engineering efficiency when the firm grows large enough to own and operate several plants, all equally efficient. For example, fruit can be canned in a plant costing less than $100, 000 (or, for that matter, in an ordinary household kitchen). With hand labor and simple equipment, however, the cost per can is very high. A larger cannery, operating on a production-line basis with automatic cooking, canning, and conveying equipment may require an investment of $ 1 million, but the production cost per can is a fraction of what it is in the smaller plant. If the output can be sold, a $ 1 million corporation with one big plant is more economical than ten $ 100, 000 corporations, each operating a small, inefficient plant. But a $ 10 million corporation, operating ten efficient plants, achieves no greater production economy than ten $ 1 million corporations operating only one plant each. The force of this point is increased when we realize that giant corporations not only operate many plants but also usually operate plants in many different industries. Thus, an automobile company not only has many plants producing automobiles, it also has plants producing trucks, locomotives, refrigerators, air-conditioning equipment, radios, television sets, and electrical generating equipment. The world's largest " steel" company is also, among other things, one of the world's largest cement producers. A large “food processing” firm also makes electric iron and other household appliances.
Assignments to text 3: 1. Read the text and find the sentences explaining the notion and function of specialized management. 2. Translate the text and indicate advantages/disadvantages that specialized management provides for any enterprise. 3. Read the text once more and try to understand if the author stands for or against large firms. 4. Identify and read out the sentences for or against large firms. 5. Do you agree that “people with combination of ability, imagination, energy, discipline, and drive required for effective enterprise are probably our scarcest economic resource”. Give your reasons focusing on Russian realities. Text 3 Specialized Management If engineering efficiency and production-line economy were all that mattered, much could be said for a public policy designed to put severe limits to corporate size. But there is more to productivity than engineering. To return to the example of the fruit cannery, the assembly of raw materials requires specialized knowledge of different kinds of fruit and their canning properties, moreover, somebody must keep track of crops in different areas and know when and where to buy, and in what amounts. Somebody must keep in constant touch with many markets for canned fruit to decide how much output will be needed and where it will go. If these decisions are not properly made, the engineering efficiency of the plant can’t be more than offset by marketing losses. To can a poor quality of fruit, or a kind that few people really want, or to pack it in cans of the wrong size or of poor design, is just as wasteful of resources as operating a plant that is too small to be efficient. Careful attention to such details is the function of specialised management; but the elaborate division of labor necessary for most effective use of management ability requires a workload large enough to keep manager employed at their specialities. A company large enough to operate only one plant of the most economical size is often too small to specialize its management effectively. Full-time staffs devoted exclusively to production, marketing, purchasing, personnel, finance, and accounting can be kept busy only as adjuncts to a large productive operation that is spread over many plants. Even more important is the great advantage of providing as wide a field as possible for the skill, imagination, and initiative of enterprisers. Steady rise in productivity and improvement of quality are the results of conscious human effort. Somebody must perceive the advantages of each specific change in a method of production, decide to adopt it, and be able to put the decision into effect. People with combination of ability, imagination, energy, discipline, and drive required for effective enterprise are probably our scarcest economic resource. It takes a large firm to give full employment to the talents of such people.
Assignments to text 4: 1. Read the text and enumerate all reasons for large firms. 2. Write down these reasons into your notebook. 3. Look through the previous three texts and identify the facts for or against large firms. Write down the sentences into your notebook. 4. Write a concluding paragraph with your judgement on the importance of a corporation taking advantage of the sentences that you’ve written down. Text 4 Other Reasons For Large Firms Beyond productive efficiency and enterprise, however, there are other reasons why firms grow large. The larger a firm becomes, the easier it is to grow still larger by trading on its reputation. Reputation is especially important when prospective buyers are unable to experiment. For example, a firm offering standardised nation-wide service seldom does a better job in any given place than the best local firms, but many travellers prefer to patronize filling stations, stores, motels, or restaurants with familiar names and reliable reputations, rather than risk disappointment by an unknown firm. It is easier for an established firm with a good reputation to bring out a new product than it is for a new and unknown firm, even when the new product is completely unrelated to the old ones. Some large firms grow merely because it is easier for customers to get service for products that are widely used and familiar to mechanics and maintenance men. Another special advantage of size is that a large firm can employ nationwide advertising in radio, television and other media at costs that would be impossible for a firm with a small local market. A large successful firm is also in an advantageous position when raising capital for still further expansion. An established firm enjoys the advantage that many people prefer to buy new securities in a company whose reputation and performance are well known, rather than to invest in a new and untried venture. Also, borrowing money is facilitated when bankers and other lenders already know the company.
Assignments to text 5: 1. Look through the text and say what alternative means of organizing a business are discussed. 2. Read the text and find the topic sentences for each paragraph. 3. Scan for sentences which would help to give definitions to alternative means of organizing a business. 4. Give definitions of all types of businesses. 5. What are the main advantages of the types of business discussed in the text? 6. Explain the following: · synergy · reduction in the interactive “size” of the world economy · customized relationship · stakeholder vs. shareholder · identity theft · typical alignment Text 5 Alternative Means of Organizing a Business In organizing an emerging business the typical alignment is either to have a sole proprietorship, a partnership (limited or general), or possibly a corporation. Recently though, with the reduction in the interactive “size” of the world economy and the increasing speed of transactions it is apparent that there may be adaptations of the three basic organizational structures that would fit entrepreneurs better. Two organizational formats that are talked about slightly in text books are the joint venture and the consortium/cooperative. In a recent article in Business Week magazine, Dallas based Dresser Industries joined together as joint venture partners with Komatsu Ltd. of Japan to build construction equipment and engineering facilities in the United States, Latin America, and Canada. This joint venture was to merge their manufacturing, engineering, and finance operations to reduce cost, yet retain distinct product lines that would be sold through their existing dealership networks. The joint venture allows for a customized relationship for a specified duration with each principal member having explicit rights and responsibilities. It also includes the means to dissolve the joint venture. The power of the joint venture lies in the synergy which two or more companies bring to bear on specific detailed activities which both are involved. For instance, in Normal, Illinois, the Diamond Star motors Corporation is a joint venture between Mitsubishi of Japan and Chrysler Corporation of America. They cooperatively planned, designed, and laid out an automobile plant in this Midwest community that can produce up to 250 000 cars a year, while hiring fewer than 3, 000 employees. The technology, engineering, and management style have lead to the production of remarkably high quality of automobiles that have received many automobile awards. Unfortunately, due to Chrysler’s poor financial health, Chrysler is seeking Mitsubishi’s purchase of more of the joint venture’s financial responsibilities to create some cash flow for Chrysler Corporation. Although this may appear to be negative news, it’s one of the strengths or the joint venture style of organization. It provides flexibility for partners to move in and out to varying degrees. The other organization format is the cooperative or consortium based organizational pattern. In this form of organization, several companies come together to work on projects of common interest and to support these projects with their expertise and their power base. An excellent example of this is the Airbus consortium of government agencies in Europe which includes France, Germany, Britain, and Spain. Once thought of as a little plane manufacturing and marketing concern that holds 30 percent market share in the airline industry. This is still far behind the 53 percent held by Boeing, but orders are soaring and it has made tremendous strides in acquiring major contracts by worldwide airline companies. It is currently seeking major orders from United, American, or Delta Airlines. Although they have been receiving significant notoriety of their successes, the politics of operating and managing consortium based activities is troublesome. Each firm has a variety of stakeholders with varying objectives that need to be accomplished. This hinders the path of least resistance in the market place; and hence, many times the politics or interrelationships of consortiums or cooperatives may cause its collapse. In this era of pace change, consortiums/ cooperatives and joint ventures are means of taking advantage of new market niches that are developing or to redefine and reinvent products to better serve current customers.
Discussion: UNIT IX REVIEW
Ex. 1: Vocabulary fills-in. In the following sentences supply the correct verb or noun from the box below. Differ continue equip bankrupt difference continuity equipment bankruptcy own decide satisfy owner ownership decision satisfaction
1. The sole proprietor can _____ for himself if he wants to set up a new business. 2. The _____ can keep all of the profits of the business. 3. The proprietor made a _____ to purchase some new _______. 4. The sole proprietorship, partnership, and corporation ______ in the manner in which they raise capital. 5. If the owner makes the wrong decision, it may _____ the business. 6. The proprietor doesn’t wish to _____ his enterprise, because he has been unsuccessful and he doesn’t get any ______ from his efforts. 7. It takes capital to purchase inventory and ______ the workship with the necessary tools. 8. We try to_____ the customers so that they will _____ to shop here.
Ex. 2 Building your business vocabulary is very important. The new business terms are printed below, along with definitions. Please match each with its proper definition. a) sole proprietorship b) unlimited liability c)partnership d) partnership agreement e) corporation f) shareholders (or stockholders) g) corporate charter. 1) A contract between the incorporators and the state that authorizes the formation of the corporation. 2) An association of two or more persons to carry on as co-owners of a business for profit. 3) An oral or written contract between the owners of a partnership that identifies the business and states the partners' respective rights and duties. 4) A legally chartered organization that is a separate and legal entity apart from its owners. 5) A business owned by one person. 6) The owners of a corporation. 7) The concept that the business owner is responsible for Ex. 3 Building your business vocabulary is very important. The business terms are given below, along with definitions. Please, match each with its proper definition. accounting bond entrepreneur loss policy profit venture creditor capital bankrupt production service stock 1. Any of the equal parts that the ownership of a corporation is divided into. 2. Money or property and equipment used for production. 3. A person who starts, manages, and takes the risks of running a business. 4. The amount by which income exceeds costs. 5. One to whom the business owes money. 6. Unable to pay one’s debts and legally freed from the responsibility of paying them. 7. Business activity related to providing help, repair or assistance as opposed to selling or producing. 8. A principle, method or rule which determines how an organization is operated. 9. A system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results. 10. The amount by which the cost and expenses exceed the income. 11. An interest-bearing certificate of public or private indebtedness. 12. The action of making goods for human wants 13. Total output.
Assignment to text 1: 1. Complete the text using the words in the box:
losses financial corporations partnership premises creditors issue liability registered shares sole trader capital prospectus files bankruptcy
Text 1 T ypes of Business The simplest form of business is the individual proprietorship or- (1)………….: for example, a shop (US = store) or a taxi owned by a single person. If several individuals wish to go into business together they can form a (2)………..; partners generally contribute equal capital, have equal authority in management, and share profits or (3)………... In many countries, lawyers, doctors and accountants are not allowed to form companies, but only partnerships with unlimited (4) ……….. for debts - which should make them act responsibly. But a partnership is not a legal entity separate from its owners; like sole traders, partners have unlimited liability: in the case of (5) ……….., a partner with a personal fortune can lose it all. Consequently, the majority of businesses are limited companies (US = (6) ………..), in which investors are only liable for the amount of capital they have invested. If a limited company goes bankrupt, its assets are sold (liquidated) to pay the debts; if the assets do not cover the debts, they remain unpaid (i.e. (7) ……….. do not get their money back.) In Britain, most smaller enterprises are private limited companies which cannot offer (8)………..to the public; their owners can only raise capital from friends or from banks and other venture capital institutions. A successful, growing British business can apply to the Stock Exchange to become a public limited company; if accepted, it can publish a (9) ……….. and offer its shares for sale on the open stock market. In America, there is no legal distinction between private and public limited corporations, but the equivalent of a public limited company is one (10) ……….. by the Securities and Exchange Commission. Founding a Company Founders of companies have to write a Memorandum of Association (in the US, a Certificate of Incorporation), which states the company's name, purpose, registered office or premises and authorised share (11) ……….. (12) ……….. (always with an У at the end) - is the technical term for the place in which a company does its business: an office, a shop, a workshop, a factory, a warehouse, etc. Authorised share capital means the maximum amount of a particular type of share the company can (13) ……….. Founders also write Articles of Association (US = Bylaws), which set out the rights and duties of directors and different classes of shareholders. Companies' memoranda arid articles of association, and annual (14) ……….. statements are sent to the registrar of companies, where they may be inspected by the public. (A company that (15) ……….. its financial statements late is almost certainly in trouble.) In Britain, founders can buy a ready-made " off-the-shelf company from an agent, that is, a company formed and held specifically for later resale; the buyer then changes the name, memorandum, and so on.
Assignment to text 2: 1. Read the following text and then decide whether the statements following are TRUE or FALSE. · A company can only be floated once. · Banks underwrite share issues when they want to buy the shares. · It is easier for a company to be quoted on an unlisted securities market than on a major stock exchange. · Unlisted companies do not publish annual reports. · The market price of a share is never the same as its nominal value. · On the London Stock Exchange it is possible to make a profit. · without ever paying anyone any money. · If a company issues new shares, it has to offer them to existing shareholders at a reduced price. · A scrip issue can be an alternative to paying a dividend. · American corporations with large amounts of cash can spend it by buying their own shares. · Companies do not have to sell their shares at their nominal value. Text 2 Stocks and Shares The act of issuing shares (GB) or stocks (US) - i.e. offering them for sale to the public - for the first time, is known as floating a company or making a flotation. Companies generally use a bank to underwrite the issue. In return for a fee, the bank guarantees to purchase the security issue at an agreed price on a certain day, although it hopes to sell it to the public. Newer and smaller companies trade on " over-the-counter" markets, such as the Unlisted Securities Market in London. Successful companies can apply to have their shares traded on the major stock exchanges, but in order to be quoted (GB) or listed (US) there, they have to fulfil a large number of requirements. One of these is to send their shareholders independently-audited annual reports, including the year's trading results and a statement of the company's financial position. Buying a share gives its holder part of the ownership of a company. Shares generally entitle their owners to vote at companies' General Meetings, to elect company directors, and to receive a proportion of distributed profits in the form of a dividend (or to receive part of the company's residual value if it goes into bankruptcy). Shareholders can sell their shares at any time on the secondary market, but the market price of a share - the price quoted at any given time on the stock exchange, which reflects how well or badly the company is doing - may differ radically from its nominal face, or par value. At the London Stock Exchange, share transactions do not have to be settled until the account day or settlement day at the end of a two-week accounting period. This allows speculators to buy shares hoping to resell them at a higher price before they actually pay for them, or to sell shares, hoping to buy them back at a lower price. If a company wishes to raise more money for expansion it can issue new shares. These are frequently offered to existing shareholders at less than their market price: this is known as a rights issue. Companies may also turn part of their profit into capital by issuing new shares to shareholders instead of paying dividends. This is known as a bonus issue or scrip issue or capitalisation issue in Britain, and as a stock dividend or stock split in the US. American corporations are also permitted to reduce the amount of their capital by buying back their own shares, which are then known as treasury stock; in Britain this is generally not allowed, in order to protect companies' creditors. If a company sells shares at above their par value, this amount is recorded in financial statements as share premium (GB) or paid-in surplus (US). The Financial Times-Stock Exchange (FT-SE) 100 Share Index (known as the " Footsie" ) records the average value of the 100 leading British shares, and is updated every minute during trading. The most important US index is the Dow Jones Industrial Average.
Assignment to text 3: 1. Match the responses in part B with the questions in part A. Text 3 Bonds A 1. So what exactly are bonds? 2. And how do they work? 3. So you have to keep them for a long time? 4. Why should that happen? 5. Oh, I see. Is that what they mean by below par? 6. But the bond's interest rate doesn't change? 7. How's that? 8. And people talk about AAA and AAB bonds, and things like that. 9. And what about gilts? 10. Not Treasury Bilk? 11. And James Bond? B a. Because of changes in interest rates. For example, no-one will pay the full price for a 6% bond if new bonds are paying 10%. b. Exactly. And the opposite, a bond whose market value is higher than its face value, is above par. c. I knew you'd finish by saying that! d. No, not at all. Bonds are very liquid. They can be sold on the secondary market until they mature. But of course, the price might have changed. e. No, not unless it's a floating rate bond. The coupon, the amount of interest a bond pays, remains the same. But the yield will change. f. No, those are short-term (three-month) instruments which the government sells to and buys from the commercial banks, to regulate the money supply. g. That's the name they use in Britain for long-term government bonds - gilts or gilt-edged securities. In the States they call them Treasury Bonds. h. They're securities issued by companies, governments and financial institutions when they need to borrow money. i. Well, a bond's yield is its coupon payment expressed as a percentage of its price on the secondary market, so the yield changes if you buy or sell above or below par. j. Well, they usually pay a fixed rate of interest and are repaid after a fixed period, known as their maturity, for example five, seven, or ten years. k. Yes. Bond-issuing companies are given an investment grade by private ratings companies such as Standard & Poors, according to their financial situation and performance.
Assignment to text 4: 1. Read the title. What do you expect to read in this text? 2. Read and translate the subtitle. 3. Read the text and divide it into parts (logically). Justify your division. 4. Mark all pros and cons of any off-the-shelf company. 5. Translate the text. Ensure that you haven’t missed any information. 6. The author writes: “I would think twice before becoming a General Director of a company that is being sold to a new owner”. Explain, why. 7. Is the situation described similar to American realities that you have come to know from the previous units?
Text 4 Starting Your Own Business in Russia: Демченкова О.А., Якушева И.В.
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