Raising Finance
All firms need capital to stay in business. Capital is the money that a company uses to operate and develop. As well as money for running costs such as wages, material and rent, companies need to have financial reserves. Extra capital may be needed to expand by buying new premises or developing new products. Firms may also need working capital to preserve cash flow through the business, for instance if there is tіme-lag between producing goods and services and getting paid for them. There are four main ways of obtaining capital: s retained profit s borrowing s share issues s government grants and loans Retained profit is the amount of profit after tax that directors of a business decide not to distribute to their shareholders, but to keep within the business. Borrowing money usually accounts for 20-30 percent of firms’ capital. There are several types of lenders to business: commercial banks, leasing, hire purchase, debt factoring, the Stock Exchange. When companies raise finance by selling shares for the first time they make share issues, share flotations or share offerings. The government has a variety of schemes which give grants or cheap loans to firms for certain purposes.
Exercises in Word Study
Ex.1. Form adjectives from the following nouns: finance, business, profit, government, commerce, work, reserve.
Ex.2. Give the English for: залучати фінанси; управляти витратами; мати фінансові резерви; додатковий капітал, купувати нові приміщення; потік готівки, виробництво товарів та послуг; здобувати капітал; нерозподілений прибуток; позика коштів; випуск акцій; урядові субсидії; податок; акціонери; кредитор; фондова біржа.
Ex.3. Match words from list A with words from list B that have a similar meaning:
Ex.4.Find suitable opposites to the following words: borrowing, profit, to sell, cheap, lender.
Ex.5. Match the nouns in the left hand column with the verbs in the right hand column:
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