Financial Capital

Text 5.

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.

Find Russian equivalents for the following words.

Profit – seeking, not – for – profit, important, favourable, effectively, owner, share holder, price, manager, profitable, investment, equity, capital, cash, access, borrow, inventory, dividend, rate, variation, expose, management, receivable, responsible, short – term, decision, understanding, enterprise, disposal, asset, permanent, vehicle, debtor, bill, marketable, note, purchase, goods, security, balance, liability, obligation, debenture, source, bond, mortgage, loan, income, payable, expense, equity, paid-up, contribute, initial, amount, wealth, officer, treasurer.

1) Modern businesses have financial managers to look after…2) The first major component of the balance sheet of an enterprise is…3) Capital is the store of accumulated wealth contributed to…4) The finance function in a firm is usually headed by…

Financial manager, assets, current assets, the owners’ equity, paid-up capital, retained earnings, fixed capital.

Common stocks, cash management, raw materials, financial officer, balance sheet, current liabilities, major component, short-term bank credit, fixed capital, financial management, retained earnings, working capital.

Financial capital includes the liquid assets of a company as opposed to physical assets. Companies can have a variety of types of capital. The principal distribution is to share capital and loan or debenture capital.

The most usual classes of share according which the capital of a company can be divided are preference, ordinary, and deferred shares.

Preference shares have a fixed rate of dividend. The holders of preference shares do not usually have any voting rights. This means that they cannot vote at the general meetings of the company. But they do have an advantage of the holders of all other types of shares in that the dividends due to preference shares must be paid before any dividend is paid to the holders of ordinary or deferred shares.

Ordinary shares entitle their owners a vote at companies' general meetings. They also have a right to elect company directors, and to receive a proportion of distributed profits in the form of a dividend.

Companies may also turn part of their profit of capital by issuing new shares to shareholders instead of paying dividends. This is known as a bonus issue or scrip issue or capitalization issue. The source of equity is the securities market.

Loan capital is a long-term debt. Companies can raise this type of capital clearing banks, merchant banks and even pension funds.

The composition of a company's capital is called capital structure.

1. Find Russian equivalents for the following words:

Debenture, deffered, shares, preference, fixed, holder, voting, rights, ordinary, receive, issuance, expansion, bonus, scrip, type, merchant, issue, structure, composition,

source , equity, meeting, general, capital, scrip, asset.