Spelling & Vocabulary Enrichment [ 40 ]

40- ]Spelling & Vocabulary Enrichment .

Business In Use .

Assets , liabilities and the balance sheet .

A-] Assets :

- 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 .

- If a company is sold as a ‘going concern’ , it has value as a profit-making operation ,or one that could make a profit .

B-] Depreciation :

- I am a head of IT [ Information Technology ] in a publishing company . Assets such as machinery and equipment lose value over time because they wear out , or are no longer up-to-date . This is called ‘depreciation’ or ‘amortization’ . For example , when we buy new computers ,we ‘depreciate’ them or ‘amortize’ them ‘over’ a very short period , usually three years and a ‘charge’ for this shown in the financial records : the value of the equipment is ‘written down’ each year and ‘written off’ completely at the end .

- The value of an asset at any one time is its ‘book value’ . This is not necessarily the amount that it could be sold for at that time . For example , land or buildings may be worth more than shown in the accounts because they have increased in value . But computers could only be sold for less than book value .

C-] Liabilities :

- ‘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 .

D-] Balance sheet :

- 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 .

The bottom line .

A-] Accounts :

- I am an accountant . I work for one of the big ‘accountancy firms’ . 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’ . I like my profession   accountancy. The profession is called ‘accountancy’ [Br E] or ‘accounting’ [Am E]. The activity is called ‘accounting’ .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’ .

B-] Results :

- A firm reports its performance in a particular period in its results . Results for a particular year are shown in the company’s ‘annual report’ . This contains , among other things a ‘profit and loss account’[  Br E / income statement ] .

- In theory , if a company makes more money than it spends , it ‘makes a profit’ . If not it ‘makes a loss’ . But it is possible for a company to show a profit for a particular period because of the way it presents its activities under the ‘accounting standards’ or ‘accounting rules’ of one country , and a loss under the rules of another .

- A ‘pre-tax profit’ or a ‘pre-tax loss’ is one before tax is calculated . An ‘exceptional profit’ or ‘loss’ is for something that is not normally repeated , for example the sale ‘gross profit’ is before charges like these are taken away ; its ‘net profit’ is afterwards . The final figure of profit or loss is what people call informally the ‘bottom line’ .

- If a company is making a loss , commentators may say that it is ‘in the red’. They may also use expressions with ‘red ink’ ,saying , for example , that a company is ‘bleeding red ink’ or ‘haemorrhaging red ink’ .

Share capital and debt .

A-] Capital :

‘Capital’ is the money that a company uses to operate and develop .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 .

B-] Share capital :

‘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’ .

- A ‘venture capitalist’ is someone who puts up money for a lot of new companies .

C-] Loan capital :

- 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 a 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 a 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 borrower , whether it has made a profit in the relevant period or not .

D-] Security :

- Lending to companies is often in the form of ‘bonds’ or ‘debentures’ , loans with special conditions . One condition is that the borrower must have ‘collateral’ or ‘security’ : that is , if the borrower cannot repay the loan , the lender can take equipment or property , and sell it in order to get their money back . This may be an asset which was bought with the loan .

E-] Leverage :

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 Br E . 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’ .

Success and failure .

A-] Cash mountains and surpluses :

The successful company has ‘distributed’ over the years some profits or ‘earnings’ to ‘shareholders’ , but it has also kept profits in the form of ‘retained earnings’ and built up its ‘cash reserves’ ; it is sitting on a ‘cash pile’ or ‘cash mountain’ . These reserves may be used for investment or to make ‘acquisitions’ : to buy other companies .

B-] Debt and debt problems :

Here are some expressions that can be used to talk about a company’s debts or a company’s

foreign debts :repayment servicing when a company repays its deb and / or invest on it .

 ‘debt repayment’ describes a particular amount repaid

                 ----------------------------------------------------------------------------------------------------

  burden :a company’s debt , especially when considered as a problem

                 ----------------------------------------------------------------------------------------------------

                 crisis : when a company as serious difficulty repaying its debt

                -----------------------------------------------------------------------------------------------------

  debt      rescheduling  :when a company persuades lenders to change

                restructuring  :  repayment dates and terms

                -----------------------------------------------------------------------------------------------------

                default   : when a company fails to make a debt repayment

                -----------------------------------------------------------------------------------------------------

 

- to     to reschedule a debt                           to  repay default on service

                                                                                          = a debt

           to  restructure a debt                                       

C-] Turnarounds and bailouts :

The company is in financial trouble and it is being described as ‘sick’ , ‘ailing’ and ‘troubled’.

They have called in a company doctor – an expert in ‘turning round’ companies . There may be a ‘turnaround’ and the company may recover . But if there is no ‘recovery’ , the company may ‘collapse’ completely . The owner is currently looking for another company to ‘bail out’

the company by buying it . This would be a ‘bailout’ .

D-] Bankruptcy :

--If a company is in financial difficulty , it has to take certain legal steps .

- In the US , it may ask to announce bankruptcy .

Spelling & Vocabulary Enrichment [ 39 ]

39- ] Spelling & Vocabulary Enrichment .

Business In Use .

Profitability and unprofitability .

A-] Profitable and unprofitable products :

A supermarket manager talks about the costs and prices for some of its products :

Product	Cost per unit [euros] ]	Sale price per unit	Result
A	10 euros	12 euros	We ‘make  a profit’ : the product is ‘profitable’ or ‘profit-making’ .
B	15 euros	15 euros	We ‘break even’ : we reach break-even point .
C	8 euros	7 euros	We ‘make a loss’ . The product is ‘loss-making’ , but we use Product ‘C’ as a ’loss leader’ to attract people to the store , as we know they will then also buy profitable products .
D	12 euros	22 euros	Product D is very profitable and we sell a lot of it . It is one of our ‘money-spinners’ or ‘cash cows’ , products that have very good profitability .

B-] Budgets and expenditure :

- All companies  have to ‘budget for’ , or plan their costs and have a ‘budget’ . The planned budgets are compared with ‘actual expenditure’ .

- When ‘actual expenditure’ is more than the planned budget , the companies go ‘over

budget’ and ‘overspend’ .

- When The ‘actual expenditure’ is less than the ‘budget’ , the companies ‘underspend’ by . They are ‘under budget’ .

C-] Economics of scale and the learning curve :

-Ford is one of the biggest car companies in the world .It benefits from ‘economics of scale’. For example ,the costs of developing a new car are enormous , but the company can spread them over a large number of cars produced and sold . In dealing with suppliers ,it can obtain lower prices because it buys in such large quantities.

- The company also benefits from the ‘experience curve’ or ‘learning curve’ : as it produces more , it learns how to do things more and more quickly and efficiently . This brings down the cost of each thing produced and the more they produce , the cheaper it gets .

Getting paid .

A-] Shipping and biling :

- When you ask to buy something , you ‘order’ it , or ‘place an order for it’ . When the goods are ready , they are ‘dispatched’ or ‘shipped’ to you .

- An ‘invoice’ is a document asking for payment and showing the amount to pay . The activity

of producing and sending invoices is ‘invoicing’ or ‘biling’ .

B-] Trade credit :

- I have a furniture business . We do not expect our business customers to pay immediately . They are given ‘trade credit’ , a period of time before they have to pay , usually 30 or 60 days.

If a customer orders a large quantity or pays within a particular time , we give them a ‘discount’ , a reduction in the amount they have to pay .

- With some customers , especially ones we have not dealt with before , we ask them to pay

‘upfront’ , before they receive the goods .

- Like all businesses , we have a ‘credit policy’ , with ‘payment terms’ : rules on when and how customers should pay . This is part of controlling ‘cash flow’ , the timing of payment coming into and going out of a business .

C-] Accounts :

- Jennifer is a businesswoman and has her own company in Britain . She is waiting to be paid by some of her customers . These are her ‘debtors’ . They owe her money . The suppliers and other organizations that she owes money to are her ‘creditors’. She must remember to pay tax to the ‘Inland Revenue’ on time .

- Kathleen is a businesswoman and has her own company in the US . The customers that she is waiting to be paid by are her ‘accounts receivable’ or ‘receivables’ . The suppliers and other organizations that she owes money to are her ‘accounts payable’ or ‘payables’ . She must remember to pay tax o the ‘Inland Revenue Service’ on time .

- The people and organizations they sell to are their customers or ‘accounts’ . The most important ones are ‘key accounts’ .

- There are some companies that they owe them money . They get the feeling they are never going to get paid : these are ‘bad debts’ and they have ‘written them off’ .

Assets , liabilities and the balance sheet .

A-] Assets :

- 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 .

- If a company is sold as a ‘going concern’ , it has value as a profit-making operation ,or one that could make a profit .

B-] Depreciation :

- I am a head of IT [ Information Technology ] in a publishing company . Assets such as machinery and equipment lose value over time because they wear out , or are no longer

up-to-date . This is called ‘depreciation’ or ‘amortization’ . For example , when we buy new computers ,we ‘depreciate’ them or ‘amortize’ them ‘over’ a very short period , usually three years and a ‘charge’ for this shown in the financial records : the value of the equipment is

‘written down’ each year and ‘written off’ completely at the end .

- The value of an asset at any one time is its ‘book value’ . This is not necessarily the amount that it could be sold for at that time . For example , land or buildings may be worth more than shown in the accounts because they have increased in value . But computers could only be sold for less than book value .

C-] Liabilities :
- ‘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 .

D-] Balance sheet :

- 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 .

Spelling & Vocabulary Enrichment [ 38 ]

38- ] Spelling & Vocabulary Enrichment .

Business In Use .

The Internet and e-commerce .

A-] The Internet service provider’ [ ISP ] is the organization that provides you with ‘Internet access’ . You ‘register’ and open an ‘account’ , then they give you an email address so that you can communicate by ‘email’ with other users . Some ISPs have their own ‘content’ – news , information and so on – but many do not . After you ‘log on’ by entering your ‘user name’ and ‘password’ , you can ‘surf’ to any ‘site’ on the ‘World Wide Web’ . If you are looking for a site about a particular subject , you can use a ‘search engine’ like ‘Google’ or ‘Yahoo’. When you have finished , remember to ‘log off’ for ‘security’ reasons .

B-] Clicks-and-mortar :

I own a chain of sports shops . Last year , I started an ‘e-commerce’ operation , selling goods over the Internet . We have done well . Visitors do not have trouble finding what they want , adding items to their ‘shopping cart’ and paying for them ‘securely’ by credit card . Last year we had two million ‘unique users’ [ different individual visitors ] who generated 35 million ‘hits’ or ‘page views’ . That means our web pages were viewed a total of 35 million times .

- E-commerce or ‘e-tailing’ has even acted as a form of advertising and increased levels of business in our traditional ‘bricks-and-mortar’ shops . Pure Internet commerce operations are very difficult . To succeed , I think you need a combination of ‘traditional retailing’ and e-commerce : ‘clicks-and-mortar’ . In our case , this has also helped us solve the ‘last mile problem’ , the ‘physical delivery’ of goods to Internet customers : we just deliver from our local stores .

C-] B2B, B2C  and B2G :

- Selling to the public on the Internet is ‘business-to-consumer’ or ‘B2C’ e-commerce . Some experts think that the real future of e-commerce is going to be ‘business-to-business’ or ‘B2B’, with firms ordering from supplies over the Internet . This is ‘e-procurement’ .

- Businesses can also use the Internet to communicate with government departments , apply  for government contracts and pay taxes : ‘business-to-government’ or ‘B2G’ .

Sales and costs .

A-] Sales 1 :

‘Sales’ describes what a business sells and the money it receives for it . The sales manager is having a ‘sales meeting’ with her ‘sales team’ . Their ‘sales figures’ and ‘turnover’ [ money received from sales ] in the last year were good , with ‘revenue’ [ money from sales ] of 14.5 million euros , on ‘volume’ of 49 boats . That was above their ‘target’ of 13 million euros . They estimate their ‘sales growth’ the following year at ten per cent , as the world economy looked good and there would be demand for products , so her ‘sales forecast’ was nearly 16 million euros for the following year .

B-] Sales 2 :

- Here are some more uses of the word ‘sale’ :

- make a sale : sell something .  – be on sale : be available to buy .  – unit sales : the number of things sold . –Sales : a company department . – A sale : a period when a shop is charging less than usual for goods . – The sales : a period when a lot of shops are having a sale .

C-] Costs :

The money that a business spends are its costs :

1-] ‘direct costs’ are directly related to providing the product [ e.g. salaries ] .2-] ‘fixed costs’ do not change when production goes up or down [ e.g. materials ] .3-] ‘variable’ costs change when production goes up or down [ e.g. materials ]. 4-] ‘cost of goods sold’ [ COGs ] : the variable costs in making particular goods [ e.g. materials and salaries ] . 5-] ‘indirect costs’ , ‘overhead costs’ or ‘overheads’ are not directly related to production [ e.g. administration ] .

- Some costs , especially indirect costs are also called ‘expenses’ .

- ‘Costing’ is the activity of calculating costs . Amounts calculated for particular things are ‘costings’ .

D-] Margins and mark-ups :

Here are the calculations of a boat :

1-] selling price = 50.000euros . 2-] direct production costs = 35.000 euros . 3-] selling price minus direct production costs = gross margin = 15, euros . 4-] total costs = 40,000 euros . 5-] selling price minus total costs = ‘net margin’ , ‘profit margin’ or ‘mark-up’ = 10,000euros.

- The net margin or profit margin is usually given as a percentage of the selling price , in this case 20 per cent .

The mark-up is usually given as a percentage of the total costs , in this case 25 per cent .

Spelling & Vocabulary Enrichment [ 37 ]

37- ] Spelling & Vocabulary Enrichment .

Business In Use .

 

Products and Brands .

A-] Word combinations with ‘product’ :

                       catalog [ Br E ] 

                      

                       catalog [ Am E ]

                        mix         :  a company’s products as a group

                      portfolio

Product        ----------------------------------------------------------------------------------------                            line

                                   a company’s products of a particular type

                        range

                      ---------------------------------------------------------------------------------------                      lifecycle : the stages in the life of a product and the number of

                                      people who buy it at each stage

                      ---------------------------------------------------------------------------------------                       positioning :  how a company would like a product to be seen in

                                      elation o its other products or to competing products

                       ---------------------------------------------------------------------------------------                            

                       placement   :  when a company pays for its products to be seen in

                                              films and TV programs .

B-] Goods :

- ‘Goods’ can refer to the materials and components used to make products or  the products that are made . Here are some of these different types of goods : 

1-] Consumer goods that last a long time such as cars and washing machines are ‘consumer durables’ .

 

2-] Consumer goods such as food products that sell quickly are ‘fast-moving consumer goods’ or ‘FMCG’ .

C-] Brands and branding :

- ‘A brand is a name a company gives to its products so they can be easily recognized . This may be the name of the company itself :the ‘make’ of the product .For products like cars , you refer to the make and ‘model’ , the particular type of car , for example , the Ford [ make ] Ka[ model ] .

- ‘Brand awareness or ‘brand recognition’ is how much people recognize a brand . The ideas people have about a brand is its ‘brand image’  . Many companies have a ‘brand manager’ .

- ‘Branding’ is creating brands and keeping them in customer’s minds through advertising , packaging etc. A brand should have a clear ‘brand identity’ so that people think of it in a particular way in relation to other brands .- A product with the retailer’s own name on it is an ‘own-brand product’ [ Br E ] or  ‘own-label product’ [ Am E ] .

- Products that are not ‘branded’ , those that do not have a ‘brand name’ are ‘generic products’ or ‘generics’ .

Price .

A-] Pricing :

The goods of our company are ‘low-priced’ . Permanently low ‘pricing’ means , it ‘charges’ low prices all the time .

- You mean ‘cheap’ : your goods are poor quality . Our goods are ‘high-priced’ , but we give customer service . A lot of our goods are ‘mid-priced’ : nor cheap and nor expensive .

- Your goods are ‘expensive’ . Customers do not need service .

- You must be selling some goods ‘at cost’ [ what you pay for them ] or ‘at a loss’ [ even less ].

- Yes . We have ‘loss leaders’ – cheap items to attract customers in . But it is all below the ‘official’ ‘list price’ or ‘recommended retail price’ .We have a policy of ‘discounting’ ; selling ‘at a discount’ to the list price .

- If he goes on ‘undercutting’ us , we cannot stay in business .

B-] Word combinations with ‘price’ :

                 

                      boom        :  a good period for sellers , when prices ae rising quickly

                     ----------------------------------------------------------------------------------------

price      controls   :  government efforts to limit price increases

                    ------------------------------------------------------------------------------------------

                cut     :   a reduction in price

                    ----------------------------------------------------------------------------------------

               hike    :   an increase in price

                     ----------------------------------------------------------------------------------------

               war: when competing companies reduce prices in response of each other

                     ----------------------------------------------------------------------------------------

                leader   :        a company that is first to reduce or increase prices

                     ----------------------------------------------------------------------------------------

                tag  :  a label attached to goods , showing the price ; also means ‘price’

                      ---------------------------------------------------------------------------------------

C-] Upmarket and down-market  [ Br E ] ; Upscale and downscale [ Am E ] :

- Products , for example ‘skis’ , exist in different ‘models’ . Some are ‘basic’ , some more ‘sophisticated’ . The cheapest skis are ‘low-end’ or ‘bottom-end’ . The most expensive one are ‘high-end’ or ‘top-end’ products , designed for experienced users [ or people with a lot of money ] . The cheapest ‘entry-level’ skis are for beginners who have never bought skis before. Those in between are ‘mid-range’ . If you buy sophisticated skis to replace basic ones, you ‘trade up’ and move ‘upmarket’. If you  cheaper skis after buying more expensive ones ,you ‘trade down’ and move ‘down-market’ .

- ‘Down-market’ can show disapproval . If a publisher ‘takes’ a newspaper ‘down-market’ ,they make it more popular , but less cultural to increase sales .

D-]Mass markets and niches :

‘Mass market’ describes goods that sell in large quantities and the people who buy them . For example , family cars are a mass market product . A ‘niche’ or ‘niche market’ is a small group of buyers with special needs which may be profitable to sell to . For example , sports cars are a niche in the car industry .

Place .

A- ] Distribution: wholesalers , retailers and customers :

A distribution network .

Producers                           Distributers .                                  Distribution channel

                               wholesalers        retailers                               customers

- A ‘wholesaler’ or shop selling a particular product , such as cars is a ‘dealer’ . A ‘reseller’ sells computers . Wholesalers and retailers are ‘distributors’ . Wholesalers are sometimes disapprovingly called ‘middlemen’ .

B-] Shops :

A ‘shop’ [Br E] or ‘store’ [Am E] is where people buy things . Companies may call it a

‘retail outlet’ or ‘sale outlet’ . Here are some types of shops :

1-] Chain store : part of a group of shops , all with the same name . 2-] Convenience store: small shop in a residential area and open long hours . 3-] Deep discounter : a supermarket with very low prices .

 4-] Department store : very large shop with a wide variety of goods , usually in a town center . 

5-] Drugstore :  shop in a town center in the US which sells medicines ; you can also have coffee and meals there . 

6-] Hypermarket :  very large shop with a wide variety of goods ,usually outside a town . 

7-] Supermarket : very large shop , selling mainly food .

- In Britain , a ‘shopping center’ or ‘shopping precinct’ is purpose-built area or building in a town center with a number of shops . Outside towns , there are ‘shopping malls’ , where it is easy to park .

- ‘Franchises’ are owned by the people that run them [ franchisees ] , but they only sell the goods of one company . That company [ the franchisor] provides goods , organizes advertising and offers help and support . In return it takes a percentage of the profits of each franchisee . Many restaurants are also run like this .

C-] Direct marketing :

I work in a ‘direct marketing’ company . We organize ‘mailings’ for many different products and services . This is ‘direct mail’ , but people often call it ‘junk mail’ . We ‘target’ our mailing lists very carefully ; for example , we do not send ‘mailshots’ for garden tools to people who live in apartments . - We also do ‘telemarketing’ , selling by telephone , including ‘cold calls’ to people who have had no contact with us before . People are often rude to the workers in our ‘call centers’ when they do this .

Promotion

A-] Advertising mediums [ media ]:
1-] Classified advertisements in newspapers and magazines etc. 
2- ]Open air hoardings [Br E] / billboards [ Am E ] .
 3-] Neon signs . 4-] Display advertisements . 5-] TV commercials .
6-] Special display . 

7-] The Internet .

- ‘Product endorsements’ are when famous people recommend a product .

- A series of advertisements for a particular company or product is an ‘advertising

campaign’ .

- A person or business that ‘advertises’ is an ‘advertiser’ . An organization that designs and manages advertising campaigns is an ‘advertising agency’ .

- ‘Sponsorship’ is where companies sponsor [ pay some of the costs of ] events like concerts

and sports events .

B-] The sales force :

A company’s ‘salespeople’ [ its ‘salesmen’ and ‘saleswomen’ ] visit customers and persuade them to buy its products . Each member of this ‘salesforce’ may be responsible for a particular region : his or her ‘sales area’ or ‘sales territory’ .

- The head of the sales force is the ‘sales manager’ .

C-] Promotional activities :

- ‘Promotion’ is all the activities supporting the sale of a product , including advertising . A ‘promotion’ describes : 

1-] a ‘special offer’ such as a ‘discount’ or reduced price .

 2-] a ‘free gift’ : given with the product . 3-] a ‘free sample’ : a small amount of the product to try or taste .

 4-] ‘competitions’ with ‘prizes’ .

- Supermarkets and airlines give ‘loyalty cards’ to customers : the more you spend , the more points you get and you can exchange these points for free goods or flights .

- ‘Cross-promotion’ is where you buy one product and you are recommended to buy another product that may go with it .