Пойгина Л.Б., Туринова Л.А. - English for Masters. Management Part 2 (1175657), страница 21
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Summarizing exercisea)b)Sum up the main points presented in Text 7. Write the plan of the text in the form ofstatements.Develop your plan into the summary.5. Discussing exercise Do you agree with the statement that contingent liabilities can pose a significant threat to the viability ofa company's operation? Why? Discuss the problem of legal commitments that can bankrupt a firm. The text states that amortization schedule is of prime analytical importance. Why? Provide yourreasoning. Discuss the advantages of a negative pledge.
Do you agree that this technique gives a borrow greaterfreedom? Why? Give reasoning.6. Translation exerciseTranslate from Russian into English. Try to use the following word-combinations:A company's balance sheet; gaining a thorough understanding; to be the first step in; financial statementanalysis; general managerial policies; liability repayment terms; the relationship between debt and equity;predict the consequences of...; to liquidate a substantial borrower; in terms of value and liquidity; the abilityto convert an asset to cash quickly; at or near market values; the company's debt repayment capability; theneed for collateral; to secure debt; an evaluation of each liability account; the current repaymentrequirements of the company; to compare the bank's overall risk as a creditor with...; book values; realvalues; the value of liabilities; to work diligently to protect equity; to repay the company's liabilities; torepresent ihe cushion between...; greater uncertainty in...; cushion to protect liabilities; absolutist statementsabout leverage; to be tempered with references to cash flow; assessment of risk in the business's operations;to spread a company's individual balance sheet accounts tender; the company's past balance sheets; absolutechanges in dollars; percentage change in the distribution of assets; a corporative analysis.1.
Полное понимание балансового отчета компании является первым шагом в анализе финансовойотчетности. Зная тип компании, промышленности и общей организаторской политики, аналитиккредита должен иметь общее представление, как выглядит балансовый отчет компании. Рассматриваястоимости активов, сроки выплаты обязательств и отношения между долгом и собственнымикапиталами, кредитные аналитики могут лучше предсказывать последствия необходимостиликвидации крупного заемщика, потерпевшего неудачу.552. Оценка каждого счета актива по их стоимости и ликвидности (способности быстроконвертировать актив в денежные средства по или около рыночной стоимости) помогает аналитикукредита в определении способности компании выплатить долг и потребности в имущественномзалоге, гарантирующем долг.
Кроме того, оценка каждого счета обязательств помогает определитьпотребности выплат текущих долгов компании в связи с возможностью возникновения новыхпотребностей финансирования. Оценка обязательств компании относительно счетов собственныхкапиталов позволяет аналитику кредита сравнить полный риск банка, как кредитора, с риском, передкоторым стоит инвестор.3. Следует осознавать, что, в то время как стоимость активов колеблется (что означает, что ихбалансовая стоимость не отражает реальной ценности), стоимость обязательств обычно не колеблетсятак сильно.
Собственные капиталы важны по двум причинам. Во-первых, чем большее суммысобственных капиталов, тем старательнее владельцы будут работать, чтобы защитить собственныекапиталы и возместить обязательства компании. Во вторых, собственные капиталы представляютсобой буфер между балансовой стоимостью активов компании и се обязательствами.4. Большая неуверенность в ценности активов может потребовать, чтобы больший буфер защищалобязательства. Однако, абсолютные показатели рычага должны быть соразмерены с потокомденежных средств и оценкой риска в действиях бизнеса.
Ясно, что большой рычаг работает на фирмусо стабильными денежными потоками, такую как коммунальные службы.5. Как только аналитик проанализировал и составит таблицы индивидуальных счетов балансовогоотчет; компании, кредитор может начинать делать сравнения с прошлыми балансовыми отчетамикомпании.
Анализируйте и абсолютные изменения в долларах, и процентные изменения враспределении активов обязательств и собственных капиталов. Сделать также сравнительный анализсчетов балансового отчета компании и временных тенденций со счетами других компаний.Text 8FINANCIAL STATEMENTS FOR CORPORATE FORMS OF BUSINESSORGANIZATIONS1.Pre-reading exercise.Skim through the text and identify which logical part deals with each of the following subjects.a)b)c)d)e)f)g)STOCKHOLDERS' EQUITYFINANCIAL STATEMENTS FOR A CORPORATIONCHARACTERISTICS OF THE CORPORATIONTYPES OF STOCKRECORDING STOCK TRANSACTIONSCORPORATE CAPITALSPECIAL FEATURES OF PREFERRED STOCK1 ________________________________________________________A corporation has been defined as "an artificial being, invisible, intangible, and existing only incontemplation of the law." Prior discussions have referred to the fact that certain forms of "personalservice" businesses are prohibited from adopting the corporate form of organization and thus mustorganize as either sole proprietorships or partnerships.
The reason for this prohibition relates to thefact that limitations are placed on the liability of the owners of a corporation. This aspect will bediscussed in greater detail shortly.56A corporation is a legal entity separate from its owners. A sole proprietorship and a partnership arerelatively unstable. A partnership has a limited life because of the dissolution that results from thedeath or retirement of a partner or a change in the composition of the partnership. A sole proprietorship can also be looked upon as having a limited life since the death of the proprietor may resultin dissolution and liquidation, especially if certain specific skills are not available to the proprietor'sheirs.With the exception of “personal service” businesses, practically any form of business may chooseto organize as a corporation Corporations may be classified as profit corporations or not-for-profitcorporations.
A profit corporation engages in business activities and depends on profitable operations in order to continue in existence. A not-for-profit corporation includes charitable,governmental, philanthropic, educational, and recreational organizations that depend on contributionsfrom their members or on gifts or grants from public and private sources.Profit corporations may be further classified as public corporations or close corporations. A publiccorporation is a profit corporation whose ownership is widely distributed among the public, such asthe General Motors Corporation.
A close corporation is a profit corporation in which the stock isheld by relatively few individuals, such as the immediate family of the individual or group ofindividuals who organized and operate the corporation.Corporations may consist of service businesses, retail businesses, manufacturing businesses, andwholesale businesses. With the exceptions noted previously, practically any type of business mayorganize as a corporation. Regardless of the nature or purpose of the corporations, they are created bycharter, in accordance with state statutes.The primary difference in accounting for a corporation involves the capital of the organization.
Thecapital section on the balance sheet of a corporation is known as stockholders' equity. Stockholder'sequity represents the ownership of the assets of the corporation as shown by transferable-shares ofstock. The owners of the corporation are called stockholders or shareholders. A corporation is saidto have an unlimited life because ownership in the corporation is in the form of shares of stock,which are easily transferable; thus, the death of a stockholder has no effect on the continuance of theorganization.Although the stockholders are the owners of the corporation, they have no direct duties orresponsibilities in the running of the organization.
This activity is the responsibility of a board ofdirectors elected to their positions by the stockholders. The directors then select a president andother corporate officers to carry on active management of the business.2____________________________________________________The primary source of corporate capital is the issuance of stock. The incorporators subscribe toshares of stock in the corporation. The articles of incorporation state the classes and the quantitiesof stock to be sold by the corporation. Sufficient stock is sold to permit the business to operate. Theshares of stock that the corporation is permitted to sell at the time of its incorporation and at futuredates are known as authorized stock. This is the maximum quantity of stock, of various classes, thatthe charter permits to be sold.Successful operation of the business should generate profits.
The profits, or income remaining,after the payment of corporate income taxes, may be retained in the business as an additional sourceof capital. A corporation will pay dividends (distribution of corporate profits to stockholders) out ofafter-tax dollars. These dividends will reduce the amount of earnings retained in the business.However, since a corporation is not obligated to pay dividends, all of the after-tax earnings may beretained by the business as a source of capital.3 ________________________________________________________As stated earlier, the capital section of the balance sheet is known as the stockholders' equity. Inregard to this section, the balance sheet of the corporation is quite different from that of the sole57proprietorship or partnership.
All income not taken out of the other forms of businesses by the owners is transferred to the respective owners' capital accounts. In a corporation, a distinction is madebetween the investment made by the stockholders and the income retained by the corporation.The following stockholders' equity section of a corporate balance sheet illustrates the difference:Stockholders' EquityCapital StockCommon StockRetained Earnings$180,00040,000Total Stockholders' Equity$220,000The capital stock section represents the investment made by the shareholders as a result ofpurchasing stock.
The retained earnings section represents the income, after corporate income tax,that was retained in the business. This retained earnings balance will increase each year that the corporation earns a profit and retains it in the business. If the corporation sustains a loss, a reduction inthe balance of the retained earnings account will result. The stockholders' equity section illustrated isin its simplest form. The capital stock section would have to be expanded if various classes of stockwere sold (see the next section) or if other factors relating to the price stockholders pay for the stockswere considered.4 _______________________________________________________The articles of incorporation stipulate the quantity and kind of capital stock that will be sold by thefirm. There are two principal kinds of stock that may be issued: (1) common stock and (2) preferredstock,When more than one class of stock is issued, one kind is usually railed common stock.
Commonstock gives the stockholders the rights in vote for the directors of the corporation, to maintain theirpercentages of ownership in the corporation, known as preemptive rights, and to share in dividends;also, in the event of liquidation they may share in the distribution of corporate assets. The term"common" refers to the fact that the stock traditionally is sold at a price that can be afforded bypractically all investors, at least when it is first issued by the corporation.Issued stock refers to stock that is sold by the corporation and is in the hands of the shareholders.When common stock is traded on the open market, the price of the stock will vary based on supplyand demand and other factors, such as the successful operation of the corporation. Common stock, aswell as other classes of stock, is usually assigned an arbitrary money value known as par value. Thispar value is printed on the stock certificate, but does not necessarily represent the price for which thestock was sold by the corporation, which may be higher or lower than the par value.
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