Balance Sheet - раздел Философия, Учебно-методическое пособие «Economics and Plant Management» Purpose: To Show The Firm’S Financial Position.
Contents: Assets (It...
Purpose: To show the firm’s financial position.
Contents: Assets (items owned by the firm) and Liabilities (items owed by the firm): capital expenditure.
Accountants also produce cash flow statements which analyze the movements in the cash and bank balances and summarize the firm’s liquidity that is its ability to meet its debts as they fall due.
Accounting ratios are used to analyze financial information. Two major profitability ratios are:
ROCE (return on capital employed) = Net Profit x 100 / Capital Employed
This shows the rate of return on capital, and can be compared with the rate an investor could receive elsewhere, for example by investing in a safer fixed-interest source such as a building society account.
Net Profit Margin = Net Profit x 100 / Sales
This shows how many pence in each ₤’s worth of sales is represented by net profit. This gives information on whether the selling price could be dropped (by cutting this margin) in an attempt to increase sales.
The main liquidity ratio is the Current Ratio:
Current Ratio = Current Assets / Current Liabilities
A ratio of 2:1 tells us that there is Ј2 cash or “near-cash” available to pay short-term debts. The difference between the current assets (stock, debtors and cash) and current liabilities (creditors and bank overdraft) is called Working Capital. In practice, many large firms, especially in the retail sector, have a negative working capital, a ratio less than 1:1, but still survive financially.
Accountants also remove stock from the Current Assets total to calculate the Liquid Assets (also known as the Acid Test) ratio. This informs them whether the firm’s cash and debtor resources are sufficient to meet its own short-term debts, without having to sell any stock.
Efficiency ratios are also used by accountants. These include “debtor days” and “creditor days” which show how many days’ credit the firm allows and takes respectively. This is important information for credit control purposes.
Debtor Days = Debtors x 365 / Sales
Creditor Days = Creditors x 365 / Purchases
Another efficiency ratio is the Rate of Stock Turnover (“Stockturn”) which calculates the number of times the firm’s average stock is sold or “turned over” during the period.
Rate of Stock Turnover = Cost of Sales / Average Stock
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Balance Sheet
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Text study
A basic understanding of economics is essential if we are to be well informed citizens.
It is characteristic of any society that while wants of people are growing constantl
Language practice
I. Mind the use of the words: economy, economics, economic, economical, economize.
1. 5,3 million people contribute to the economy of Belarus. Britain’s economy
Word list
Tertiary – третий, в-третьих; community services – коммунальные службы, услуги; emergency services – экстренные службы (полиция, пожарные); to result from - вытекать, происходить в результате, быть
Text study
Organizations in the economy are classified according to what they produce or provide:
– primary: extractive industries such as the “3 Fs” − f
II. Complete the sentences below using the information of the text
1. Organizations that manufacture products or construct roads, buildings are called … . 2. Private … firms are owned by individuals who hope to make a profit. 3. Land, …, … and enterprise are facto
IV. Answer the following questions
1. According to what are organizations in the economy classified? 2. What can you say about primary organizations? 3. What do secondary organizations do? 4. What kind of services do tertiary organi
II. Complete the blanks
1. An economist cannot … what will happen in future in the economic domain. 2. Economic laws are true under certain given … . 3. Economic laws tell the direction of … which is expected. 4. Complex
Language practice
I. Mind the following words and phrases.
1. Сoin, credit, currency, purchasing power, constant store of value, measure, commodity, inflation, transaction, rapidity, pr
Language practice
I. Mind the use of the words: requirements, deposit, check clearing, reserves, assets.
1. Central bank imposes reserverequirements. 2. Commercial banks promise to p
Language practice
I. Mind the use of the words: vary, variable, varied, various, variety, variation.
1. Conditions on that market are stable and do not vary very much from year t
Language Practice
I. Mind the following words and phrase.
Exhibit, exhibition, exposition, exhibitor, exposure, display, attendance, showcase, show, dedicate, agent, examine, hold, merc
Language Practice
I. Mind the following words advertising, advertisement, publicity, public relations, ads, brand, promote, trademark.
1. Advertising means making a product or service known to
Word list
Legal structure – правовая, законодательная структура; objective – цель, задача; to be associated with – быть связанным с, относиться к; profit – прибыль, доход, польза; profit motive – стимул к по
Text study
Organizations in the UK economy can be classified according to their choice of legal structure, the sector in which they operate, and their business objectives.
Two key con
Language practice
I. Match the words their definitions.
a) liability 1) one who shares something with another
b) business 2) a general inclination, direction or
Word list
Profit – прибыль, доход, польза, выгода; turnover – товарооборот, оборачиваемость; market share – доля рынка; expansion – увеличение, рост, развитие; reinvesting – реинвестирование;
Text study
The size of a firm can be measured in different ways. Popular bases are:
– profit;
– t
Language practice
I. Match the words their definitions.
a) profit
1) material wealth in the form of money or property
Word list
Production costs – заводская себестоимость, издержки производства; fixed costs – фиксированные расходы; output – выпуск, объём производства, выработка, производительность; rent – арендная плата; sa
Text study
One important way to classify production costs is to divide them into fixed and variable. Fixed costs do not change as output changes: examples include facto
Word list
Accounting – бухгалтерское дело, учёт, расчёт, начисление; account – счёт, учёт; accountant – бухгалтер, счетовод, учётчик; ledger – бухгалтерская книга, регистрационный журнал; sal
Language practice
IMatch the words to their definitions.
a) Sales Ledger
1) it is the main liquidity ratio
Word list
Human relations – взаимоотношения между членами коллектива; efficient – эффективный, умелый, квалифицированный; workforce – рабочая сила, трудовые ресурсы; recruit – нанимать на раб
Text study
All firms depend for their survival on a contented and efficient workforce: its human resource. A firm’s Personnel function manages its human resources.
I. Match the words to their definitions.
a) staff
1) a formal agreement between two or more parties
b) vacancy
2) one in charge of managing an enterprise or busin
Word list
Marketing function – маркетинговая функция; consumer – потребитель; to promote – продвигать, раскручивать, содействовать продаже; market research – изучение возможностей рынка; fiel
Text study
The marketing function has two key roles to play in a firm.
– It collects and analyses data from the firm’s markets and from its consumers.
– It promotes and suppo
Language practice
I. Match the words to their definitions.
a) market
1) a person who buys services or goods
IV. Answer the following questions
1. How many key roles does the marketing function have? 2. What does collecting and analyzing data involve? 3. How are data collected? 4. What research collects original data exclusively for this r
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