Making ethical decisions.

Text 16

Retell the text.

Put special questions to the text.

Make up sentences with the following word combinations.

Give the Definitions.

Complete the sentences.

Match the following word combinations.

1) Financial management is essential to businesses because…2) If tax payments are due on the 15th of the month…3) The challenge of sound financial management is to see that…4) Financial managers often try to keep cash expenditures at a minimum free funds…

Cash Management, tax payments.

Personal financial needs, financial requirements, business loan, investment potential, investment potential, efficient cash management, small firms.

You are a department manager for a major consumer products firm. Each year your supervisor asks that you prepare a short-term financial forecast and operating bud­get for the coming fiscal year. Your department's appropri­ations are determined and funds allocated from the forecast and budget you present. Preliminary analysis indi­cates that your department could survive the next year's operations with exactly the same budget that was allocated to you last year.

The problem is, you wonder if you don't request additional funds for this year, will the firm expect you to keep your departmental costs down each and every year? You realize your supervisor would certainly approve a 10 percent increase in your budget appropriations just on the trust he has in you. You might even be able to get a 15 percent increase with questioning of actual need. What would you do? What could be the result of your decision?

Cash budgets can be important guidelines that assist managers in anticipating borrowing, debt repayment, cash disbursements, and short-term investment expectations. Cash budgets are often the last budgets that are prepared.

The master budget ties in all the above mentioned budgets and summarizes the proposed financial activities of the firm.

At this point, it should be obvious to you that financial managers play an important role in the operations of the firm. These managers often determine what long-term investments to make, when specific funds will be needed. Once a company has projected its short-term and long-financial needs and established budgets to show how funds will be allocated, final step in financial planning is to establish financial controls.

Financial control means that the actual revenues, costs, and expenses (including financial control, cash flow projections) are periodically reviewed and compared with the projected process that periodically happens. Deviations can thus be determined and corrective action taken. Such controls help reveal which accounts, which departments are varying from the financial plans. In either case, some financial adjustments to the plan may be made.

1. Find Russian equivalents for the following words:

Consumer, product, supervisor, short-term, forecast, appropri­ation, determine, allocate, exactly, preliminary, indi­cate, survive, debt, repayment, disbursement, guideline, expectation, establish, obvious, long-financial, adjustment, deviation.