Нина Пусенкова - Английский язык. Практический курс для решения бизнес-задач
For a longer horizon, financial projections permit you to make estimates about future sales levels, expansion costs, or general business conditions and see how such conditions would affect your company’s financial results in the years to come.
The preparation of pro formas and projections is a complex exercise that requires a sound knowledge of financial accounting. The pro forma statements show how an expected sales increase will change the company’s profit and loss statement and balance sheet forecast for next year.
Source: www.newyorkfed.org
Essential Vocabulary
1. pilot program – пилотная программа
2. credit union – кредитный союз
3. targeted funds – целевые средства
4. application n – заявка, заявление
applicant n– заявитель
5. sole proprietorship – единоличное владение
6. short-term (current) assets – текущие (краткосрочные) активы
7. long-term (fixed) assets – долгосрочные (внеоборотные) активы
8. seasonal commercial loan – сезонный коммерческий кредит
9. installment loan – кредит с погашением в рассрочку
10. collateralized loan – обеспеченный кредит
11. credit card advance – аванс по кредитной карте
12. lump sum – единая сумма
13. compensating balance – компенсационный остаток
14. deposit account (DA) – депозитный счет
15. executive summary – резюме
16. five Cs (capacity to repay, capital, collateral, conditions, character) – пять аспектов оценки при предоставлении кредита
17. pledge n – залог, обеспечение, заклад; дар; обет; обещание
pledge v – закладывать, связывать обещанием, заверять
18. reference n – ссылка; справочник; упоминание; рекомендация; отношение; полномочие
19. net worth – чистая ценность
20. profit and loss statement (P&L) – отчет о прибылях и убытках
21. ratio analysis – анализ коэффициентов
22. gross profit margin – маржа валовой прибыли
23. operating profit margin – маржа операционной прибыли
24. extraordinary items – экстраординарные события (чрезвычайные обстоятельства)
25. quick ratio (acid test ratio) – коэффициент быстрой ликвидности
26. checking account – чековый (текущий) счет
27. current ratio – коэффициент текущей ликвидности
28. debt ratio – отношение заемного капитала к собственному
29. turnover ratio – коэффициент оборачиваемости
30. collection period ratio – средний срок инкассации поступлений
31. days to sell inventory ratio – средний срок продажи запасов
32. days purchases in accounts payable ratio – средний срок оплаты поставщиков
33. pro forma – гипотетический
Exercise 1*. Find synonyms to the following terms and make sentences of your own using these synonyms.
quick ratio; long-term assets; preferred stock; leverage; margin trading; face value; inventory; all-equity financed firm; income statement; strike price
Exercise 2. Make a dialogue between an entrepreneur who needs to raise funds for his business and a commercial banker. As a banker, you should decide whether you are going to extend credit to this business and explain why you consider reasons for viewing this enterprise an attractive credit opportunity.
Exercise 3. Write a loan application for your business. Invent a bank’s response denying a loan and supplying reasons for a denial.
Exercise 4. Write a business plan for your company using the following outline.
Sample Business Plan
Title Page
Name of Company, Date, Contact Information, etc.
Table of Contents
Executive Summary
Business Concept
Company
Market Potential
Management Team
Distinct Competencies
Required Funding and its Use
Exit Strategy
Main Sections
I. Company Description
Mission Statement
Summary of Activity to Date
Current Stage of Development
Competencies
Product or Service
Description
Benefits to Customer
Differences from Current Offerings
Objectives
Keys to Success
Location and Facilities
II. Industry Analysis
Entry Barriers
Supply and Distribution
Technological Factors
Seasonality
Economic Influences
Regulatory Issues
III. Market Analysis
Definition of Overall Market
Market Size and Growth
Market Trends
Market Segments
Targeted Segments
Customer Characteristics
Customer Needs
Purchasing Decision Process
Product Positioning
IV. Competition
Profiles of Primary Competitors
Competitors’ Products/Services & Market Share
Competitive Evaluation of Product
Distinct Competitive Advantage
Competitive Weaknesses
Future Competitors
V. Marketing and Sales
Products Offered
Pricing
Distribution
Promotion
Advertising and Publicity
Trade Shows
Partnerships
Discounts and Incentives
Sales Force
Sales Forecasts
VI. Operations
Product Development
Development Team
Development Costs
Development Risks
Manufacturing (if applicable)
Production Processes
Production Equipment
Quality Assurance
Administration
Key Suppliers
Product / Service Delivery
Customer Service and Support
Human Resource Plan
Facilities
VII. Management and Organization
Management Team
Open Positions
Board of Directors
Key Personnel
Organizational Chart
VIII. Capitalization and Structure
Legal Structure of Company
Present Equity Positions
Deal Structure
Exit Strategy
IX. Development and Milestones
Milestones May Include Some or All of the Following:
Financing Commitments
Product Development Milestones
Prototype
Testing
Launch
Signing of Significant Contracts
Achievment of Break-even Performance
Expansion
Additional Funding
Any Other Significant Milestones
X. Risks and Contingencies
Some Common Risks Include:
Increased Competition
Loss of a Key Employee
Suppliers’ Failure to Meet Deadlines
Regulatory Changes
Change in Business Conditions
XI. Financial Projections
Assumptions (Start Date, Commissions, Tax Rates, Average Inventory, Sales
Forecasts, etc.)
Financial Statements (Balance Sheet, Income Statement, Cash Flow Statement)
Break Even Analysis
Key Ratio Projections (Quick Ratio, Current Ratio, D/E, D/A, ROE, ROA, Working
Capital)
Financial Resources
Financial Strategy
XII. Summary and Conclusions
Lesson 38
Business Law
Read and translate the texts and learn terms from the Essential Vocabulary.
Business Law
Business law is the body of rules, whether by convention, agreement, or national or international legislation, governing the dealings between persons in commercial matters.
Business law falls into two distinctive areas: (1) the regulation of commercial entities by the laws of company, partnership, agency, and bankruptcy and (2) the regulation of commercial transactions by the laws of contract and related fields.
In civil law countries, company law consists of statute law; in common law countries it consists partly of the ordinary rules of common law and equity and partly statute law. Two fundamental legal concepts underlie the whole of company law: the concept of legal personality and the theory of limited liability. Nearly all statutory rules are intended to protect either creditors or investors.
There are various forms of legal business entities ranging from the sole proprietor, who alone bears the risk and responsibility of running a business, taking the profits, but as such not forming any association in law and thus not regulated by special rules of law, to the registered company with limited liability and to multinational corporations. In a partnership, members «associate,» forming collectively an association in which they all participate in management and sharing profits, bearing the liability for the firm’s debts and being sued jointly and severally in relation to the firm’s contracts or tortious acts. All partners are agents for each other and as such are in a fiduciary relationship with one another. An agent is a person who is employed to bring his principal into contractual relations with third parties.
It is inevitable that in certain circumstances business entities might be unable to perform their financial obligations. With the development of the laws surrounding commercial enterprises, a body of rules developed relating to bankruptcy when a person or company is insolvent (i.e., unable to pay debts as and when they fall due), either he or his creditors may petition the court to take over the administration of his estate and its distribution among creditors. Three principles emerge: to secure fair and equal distribution of available property among the creditors, to free the debtor from his debts, and to enquire into the reasons for his insolvency.
Business law touches everyday lives through every contractual dealing undertaken. A contract, usually in the form of a commercial bargain involving some form of exchange of goods or services for a price, is a legally binding agreement made by two or more persons, enforceable by the courts. As such they may be written or oral, and to be binding the following must exist: an offer and unqualified acceptance thereof, intention to create legal relations, valuable consideration, and genuine consent (i.e., an absence of fraud). The terms must be legal, certain, and possible of performance.
Contractual relations, as the cornerstone of all commercial transactions, have resulted in the development of specific bodies of law within the scope of business law regulating (1) sale of goods, i.e., implied terms and conditions, the effects of performance, and breach of such contracts and remedies available to the parties; (2) the carriage of goods, including both national and international rules governing insurance, bills of lading, charter parties, and arbitrations; (3) consumer credit agreements; and (4) labour relations determining contractual rights and obligations between employers and employees and the regulation of trade unions.
Business law, on national and international levels, is continually evolving with new areas of law developing in relation to consumer protection, competition, and computers.
Source: Encyclopedia Britannica
The American Legal System
Sources of Law.
Constitutional Law is based on a formal document that defines broad powers. Federal constitutional law originates from the U.S. constitution. State constitutional law originates from the individual state constitutions.
Statutes and Ordinances are legislation passed on the federal, state, or local levels.
Common Law is based on the concept of precedence – on how the courts have interpreted the law. Under common law, the facts of a particular case are determined and compared to previous cases having similar facts in order to reach a decision by analogy. Common law applies mostly at the state level. It originated in the 13th century when royal judges began recording their decisions and the reasoning behind their decisions.
Administrative Law – federal, state and local level. Administrative law is made by administrative agencies that define the intent of the legislative body that passed the law.
The sources of law have both vertical and horizontal dimensions. Vertical dimensions include federal authority, state authority, and concurrent authority. Federalism refers to this form of government, in which there is national and local authority. Federal authority covers laws related to patents, pensions and profit sharing, and labor issues. State authority covers business association, contracts, and trade secrets. Concurrent authority covers security law, tax law and employment law. Note that employment law refers to non-union relationships; labor law refers to union relationships.
The horizontal dimension is related to the separation of power between the executive branch, which creates administrative law, the legislative branch, which creates statutes, and the judicial branch, which creates common law. The judicial system in the U.S. has a pyramid structure consisting of fewer higher level courts and more lower level courts:
