Corporate finance:
In good company
In diesem Test geht es um die Finanzen eines Unternehmens. Finden Sie mit unseren Übungen heraus, wie gut Sie auf Englisch bei Ein- und
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1. In the money (6 points)
The first thing the consultants do is to determine the company’s most important sources of income. Fill in the missing vowels.
The most important source of income is the (A) s l sr v n s — the money LeSuScho receives from selling its chocolate products. The company also allows other products, such as children’s toys and games, to use its name and logo. This brings in money, in the form of (B) c mm ss ns and (C) l c nc f s.
The founder of LeSuScho invented several unique processes that are still used today. So the company earns money from (D) p t nts that it has registered.
LeSuScho also sells its products in special shops. These are run by independent business people, with LeSuScho keeping overall control of products, quality and store design. It makes money from this by way of (E) fr nch s f s.
Last but not least, the company earns (F) nv stm nt nc m through its holdings of shares, commodities, real estate, etc.
2. Getting more (9 points)
LeSuScho’s owners want to raise additional funds. Complete the text using the words in the box.
corporate bond crowdfunding dividend floating go public shareholders shares subsidies stock exchange
dOne way of raising money is to (A) . This means offering (B) to investors, who would then become (C) in the company. In return for their investment, they would receive an annual (D) . However, (E) the company on the (F) is a very expensive process, so the owners could consider other, more modern forms of raising capital, such as (G) . The firm might also choose to issue a (H) , effectively asking investors to lend it money in exchange for a guaranteed return. Alternatively, if the firm opens a new plant in a region with high unemployment, they might qualify for government ment assistance assis in the form of (I) .
3. Where the money goes (8 points)
The consultants are now looking at the company’s expenses. The terms in bold are not where they should be. Put each one in the right place.
Wages and salaries paid to the staff — also called production costs (A)
— represent some of the company’s biggest expenses. There are also the senior managers’ pay, benefits and bonuses, otherwise referred to as corporate social responsibility
(B) .
The company also has high personnel costs (C) , as it uses a lot of machines to make the chocolate. It has to aside money for executive remuneration
(D) : the decrease in the value of its factories and equipment.
The owners have chosen to fleet
(E) most of their profits into the depreciation (F) . Because it has to deliver its products nationwide, LeSuScho also keeps and maintains a plough back (G) of lorries and vans.
Finally, in an attempt to create goodwill among its customers and boost its image, the company has decided to invest in business operations (H) initiatives such as sponsorship, charity work and supporting other good causes.
4. Keeping control (10 points)
Carol Lynch works as a credit controller for LeSuScho. She is taking one of the consultants through a typical day at work. Choose the correct words.
“First of all, I access all our bank accounts to check what payments we have received overnight from individuals and companies. If the payments have been made as expected, I (A) allocate / transfer the money to the appropriate account and inform my colleagues elsewhere in the finance department about these (B) transitions / transactions.
Next, I respond to any correspondence. When it comes to inquiries from suppliers or new customers, I have to check their (C) credibility / creditworthiness before I can authorize setting up any new accounts. I also have to chase up clients who haven’t settled their (D) debts / orders. I make sure that the team in the operations and sales departments know about any clients we need to take action against because of consistent (E) wrong payment / non-payment. We call these people (F) failures / defaulters.
However, we like to maintain good relations with all our business partners, so before taking any action, we first send out polite (G) reminders / remains if accounts are (H) overhead / overdue or (I) outstanding / outdated. But if worst comes to worst, I have to hand the debt over to a (J) credit institution / collection agency and they will chase it up.”
5. Making a statement (4 points)
Before LeSuScho can report its results, the accountants in the finance division have to prepare the annual financial statements. Choose the right definition for each document.
A. First of all, the accountants prepare the income statement. This is...
1. the account in which the annual net
profit and loss of a business is presented. 2. the account of all the company’s revenues
during the business year.
B. Then they have to prepare the balance sheet. This document is...
1. a summary of the success or failure of strategies adopted by the company in the preceding business year.
2. a statement of what a business owns
(its “assets”) and what it owes (its “liabilities”) on a particular date.
C. The third document that is prepared is the statement of cash flows. This is...
1. a summary of the inward and outward movement of cash in a business during the period covered by the income statement.
2. an overview of invoices paid in cash during the period covered by the income statement.
D. LeSuScho’s financial statements have to be audited by external auditors. They issue their opinion of the financial statements and include an auditor’s letter. This... 1. documents the independent verification
of the figures in the financial statements. 2. comments on the success or failure of the
company to meet its financial targets.
6. A question of balance (6 points)
LeSuScho’s balance sheet includes the following positions. Assign them to the correct side of the balance sheet: assets or liabilities.
accounts payable accrued wages goodwill inventory property, plant and equipment retained earnings
7. The end of the road (7 points)
LeSuScho’s owners are keen to avoid the fate of SweetTooth, one of their competitors who went bankrupt. Choose the right option from the words in bold.
Some years ago, SweetTooth ended up so far (A) in the red / in red figures that it had to (B) leave / cease trading and could no longer operate as a (C) going concern / working business. For years, it had been living beyond its means. Consequently, it (D) went bust / bump and had to call in the (E) administrators / debtors. Its (F) creditors / suppliers lost most of their money when the company’s assets were eventually sold off at a very low price in a (G) bargain / fire sale.