The information contained in these two financial statements becomes more important when it is compared with corresponding information for previous years, for competitors, and for the industry in which the firm operates. A number of financial ratios can also be computed from this information. These ratios provide a picture of the firm's profitability, its short-term financial position, its activity in the area of accounts receivables and inventory, and its long-term debt financing. Like the information on the firm's financial statements, the ratios can and should be compared with those of past accounting periods, those of competitors, and those representing the average of the industry as a whole.
Exercises
I. Translate into Russian,
Accounting; bookkeeping; accounting information; lender; stock; stockholder; financial statement; balance sheet; income statement; assets; liabilities; owners' equity; bond; debt; annual report; profitability; accounting period; return on investment; soundness of investment; issue of stocks and bonds; revenue; profit; account receivable; transaction; amount; own; owner; relay on; report; borrow; deal with; confirm; approve; provide; compare.
II. Find the English equivalents.
(); ; ; ; (); (); ; ; ; (); ; (); (); ; ; ; (); ; ( ); ; ; (); ; ; ; ; ; ; ( ); ().
III. Fill in the blanks.
1. Managers, lenders, suppliers and government agencies relay on the information contained in two .
2. These two reports the balance sheet and... are summaries of a firm's activities during a specific time period.
3. The basis for the accounting process is ..
4. Assets are the... that a firm owns.
5. Liabilities are the firm's debts and....
6. Owners' equity is the difference between a firm's... and its liabilities.
7. A balance sheet is... of a firm's assets, liabilities, and owners' equity accounts at a particular time.
8. A balance sheet must demonstrate that the accounting, does indeed balance.
9. An income statement is a summary of a firm's revenues and.... during a specific accounting period.
10. The information in these two financial statements becomes more important when it is... with corresponding information for previous years or past.....periods.
IV. Translate into English.
1. .
2. .
3. ( ) , .
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4. .
5. - .
6. ( ) .
7. .
8. , .
9. .
10. , , .
V. Questions and assignments.
1. What is accounting? Give a short definition.
2. Is it possible to manage a business operation without accurate and timely accounting information?
3. Who needs accounting information? Explain why.
4. What is the basis for accounting process?
5. State () the standard form of the accounting equation.
6. What is a balance sheet? Give a short definition.
7. What must a balance sheet show?
8. What is an income statement?
9. What can be computed from the information contained in a balance sheet and an income statement?
10. Do the ratios computed from this information provide a picture of a firm's profitability and its financial position?
11. Is this information for competitors?
VI. Read and translate this newspaper advertisement.
Investment Banking
