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Tiếng anh chuyên ngành kế toán bài 3
Unit 3: Financial statements FINANCIAL STATEMENTS In this unit, we will learn the language and knowledge related to main types of financial statements and their main characteristics Trong học học kiến thức ngôn ngữ kế toán liên quan đến loại báo cáo tài đặc điểm loại báo cáo tài UNIT OBJECTIVES - MỤC TIÊU • Provide students with the language and knowledge related to main types of financial statements Cung cấp cho sinh viên vốn ngôn ngữ kiến thức liên quan đến loại báo cáo tài • Provide students with the language of describing a graph Cung cấp cho sinh viên ngôn ngữ dùng để mô tả biểu đồ • At the end of this unit, students will be able to tell and write about main types of financial statements, the main characters of each type and the importance of studying them Sau kết thúc học này, sinh viên nói viết loại báo cáo tài bản, đặc điểm loại tầm quan trọng việc nghiên cứu báo cáo tài DURATION (9 periods) - THỜI LƯỢNG HỌC (9 TIẾT) 31 Unit 3: Financial statements Match the words or expressions in column A with their definitions in column B The suggested time to this exercise is 10 minutes Column A Column B A A description of the ways a new business hopes to make money, showing possible income and expenditure Balance sheet B Financial statement which shows a company’s financial condition (amount of debits and credits) on the last day of an accounting period Share certificate C The net profit or net income line on a profit and loss account or income statement Capital expenditure D Items of value which are not easily changed into cash but which the business needs Bottom line E Cash and other liquid assets in excess of current liabilities; the ease with which an asset can be spent or sold Business plan F Financial statement which shows the profit or loss made by a company during the accounting period Liquidity G A document which represents a part of the total stock value of a company and which shows who owns it Dividend H A share in the annual profits of a limited company, paid to shareholders Fixed assets I Those whose value can only be quantified or turned into cash with difficulty (e.g copyrights, trade marks) 10 Intangible assets 32 Profit and loss account J Major spending on large items necessary for the business, such as property or equipment Unit 3: Financial statements Text A: Read text A below and exercise 2.1 The suggested time for reading the text and completing the exercise is 30 minutes FINANCIAL STATEMENTS shareholders over time to launch a new product, rent The followings will look for use of a building, money f you can read a nutrition into details of the first three owed to suppliers for materials, label or a baseball box financial statements payroll a company owes to score, you can learn to read its employees, environmental basic financial statements If Balance Sheets cleanup costs, or taxes owed to you can follow a recipe or balance sheet provides the government Liabilities also apply for a loan, you can learn detailed information about include obligations to provide basic accounting The basics a company’s assets, liabilities goods or services to customers aren’t difficult and they aren’t in the future and shareholders’ equity science Assets are things that a com- Shareholders’ equity is somepany owns that have value times called capital or net This typically means they can worth It’s the money that either be sold or used by the would be left if a company sold company to make products or all of its assets and paid off all provide services that can be of its liabilities sold Assets include physical This leftover money belongs to property, such as plants, trucks, the shareholders, or the owners, of the company There are four main financial equipment and inventory It statements They are: (1) balance also includes things that can’t A company’s balance sheet is sheets; (2) income statements; be touched but nevertheless set up like the basic accounting (3) cash flow statements; and exist and have value, such as equation On the left side of the (4) statements of shareholders’ trademarks and patents And balance sheet, companies list equity Balance sheets show cash itself is an asset So are their assets On the right side, what a company owns and investments a company makes they list their liabilities and what it owes at a fixed point in Liabilities are amounts of shareholders’ equity Sometime Income statements show money that a company owes to times balance sheets show how much money a company others This can include all assets at the top, followed by made and spent over a period kinds of obligations, like liabilities, with shareholders’ of time Cash flow statements money borrowed from a bank equity at the bottom show the exchange of money A balance sheet shows a snapbetween a company and the shot of a company’s assets, outside world also over a liabilities and shareholders’ period of time The fourth equity at the end of the reportfinancial statement, called ing period It does not show the a “statement of shareholders’ flows into and out of the equity,” shows changes in the accounts during the period interests of the company’s Financial statements I A 33 Unit 3: Financial statements Income Statements A n income statement is a report that shows how much revenue a company earned over a specific time period (usually for a year or some portion of a year) An income statement also shows the costs and expenses associated with earning that revenue The literal “bottom line” of the statement usually shows the company’s net earnings or losses This tells you how much the company earned or lost over the period Income statements also report earnings per share (or “EPS”) This calculation tells you how much money shareholders would receive if the company decided to distribute all of the net earnings for the period (Companies almost never distribute all of their earnings Usually they reinvest them in the business.) To understand how income statements are set up, think of them as a set of stairs You start at the top with the total amount of sales made during the accounting period Then you go down, one step at a time At each step, you make a deduction for certain costs reviews the cash flow from one of three types of activities: (1) operating activities analyzes a company’s cash flow from net income or losses; (2) investing activities shows the cash flow from all investing activities, which generally include purchases or sales of long-term assets; and (3) financing activCash Flow Statements ities statement shows the ash flow statements report cash flow from all financing a company’s inflows and activities outflows of cash This is im- Although this article discusses portant because a company each financial statement sepaneeds to have enough cash on rately, keep in mind that they hand to pay its expenses and are all related The changes in purchase assets While an in- assets and liabilities that you come statement can tell you see on the balance sheet are whether a company made a also reflected in the revenues profit, a cash flow statement and expenses that you see on can tell you whether the com- the income statement, which pany generated cash result in the company’s gains or or other operating expenses associated with earning the revenue At the bottom of the stairs, after deducting all of the expenses, you learn how much the company actually earned or lost during the accounting period People often call this “the bottom line.” C A cash flow statement shows changes over time rather than absolute dollar amounts at a point in time It uses and reorders the information from a company’s balance sheet and income statement losses Cash flows provide more information about cash assets listed on a balance sheet and are related, but not equivalent, to net income shown on the income statement And so on No financial statement tells the complete story But combined, they provide very powerful information for investors And information is the investor’s best tool when it comes to investing wisely The bottom line of the cash flow statement shows the net increase or decrease in cash for the period Generally, cash flow statements are divided into three main parts Each part Source: Text A: From Beginners' Guide to Financial Statements, US Securities and Exchange Commission, http://www.sec.gov/investor/pubs/begfinstmtguide.htm 34 Unit 3: Financial statements 2.1 According to text A, which of the following sentences are true (T) or false (F) Questions T/F Financial statements show financial information of a company from the establishment to the present Assets includes visible and invisible valuable things that a company owns Liabilities are amount of money that a company owns from others A balance sheet gives an overview of accounting equation Looking at the income statement, investors can estimate how much money they might receive The income statements are set up from the bottom to the top A cash flow statement shows how the company generates cash A cash flow statement is set up separately from the balance sheet and the income statement A cash flow statement often analyzes the cash flow from three angles 10 The financial statement, balance sheet and cash flow statement have no relationship with each other 2.2 In which kind of financial statements can you find the information about the followings? Put them in the correct box assets expenses inflows of cash liabilities outflows of cash revenue cost investing activities ESP shareholders’ equity Balance sheet 2.3 Income statement Cash flow statement Below you will find answers to five different questions Read the text again and try to supply the missing questions Example: What are the four main financial statements? They are balance sheets, income statements, cash flow statements, and statements of shareholders’ equity ………………………………………………………………………………? They can either sell or use them to make products or provide services for profit 35 Unit 3: Financial statements ………………………………………………………………………………? Trademarks are intangible assets ………………………………………………………………………………? It shows information about a company’s assets, liabilities and shareholders’ equity at the end of the reporting period ………………………………………………………………………………? The “bottom line” ………………………………………………………………………………? To know whether it has enough cash on hand to pay its expenses and purchase asset Text B: Read text B and exercices 2.4 and 2.5 below The suggested time for reading the text and completing the exercise is 30 minutes THE INS AND OUTS OF CASH FLOW STATEMENTS U nderstanding your cash flow statement is key to tracking your business's financial health Cash is what keeps your business functioning You obviously need profit, but equally as critical is your cash flow It's important to know the financial health of your business, which is why you need to understand the purposes of your different financial statements Your traditional financial statements include a balance sheet, profit and loss statement, and cash flow statement What does the cash flow statement tell you that the others don't? There's a difference between profitability and cash flow You may be profitable and still have a negative cash flow, which is a difficult concept to understand for most business owners Why? There are things that take cash out of the business that don't classify as expenses and therefore don't appear on your profit and loss statement These include: • Payment of loan principal • Payment of credit card principal • Owner's draws These transactions take cash out of the business and therefore show up on your cash flow statement, but not on your profit and loss statement When you borrow money from a lender or credit card vendor, you don't count it as income Therefore, when you pay it back, you don't count it as an expense The interest or finance charges you incur on borrowing that money are an expense and will appear as an expense and use of cash Similarly, when you invest money in your own business as an owner's investment, it's not counted as income So when you take money out as an owner's draw, it doesn't count as an expense Owner's transactions affect your equity, not your revenue or expense accounts When looking at a cash flow statement, you have three main breakdowns that show where cash is coming from and going to: • Operations 36 • Investing • Financing Unit 3: Financial statements Operating activities include your day-to-day operations Increases and decreases in receivables and payables are accounted for on your cash flow statement, as are other activities from operating your business and selling your products and services The operating section is where your main cash flow should be generated Long-term business health comes from having a good net profit and positive cash flow from your operating activities Investing activities include the purchase and sale of your long-term fixed assets, such as property, plant and equipment Financing activities include the borrowing and repayment of long-term liabilities Understanding what your cash flow statement is telling you about your business is critical All three of your main financial statements - balance sheet, profit and loss statement, and cash flow statement - relay a different view of your business, and each is critical to the overall health of your business Source: From The Ins and Outs of Cash Flow Statements, By Pam Newman, May 15, 2007 http://entrepreneur.com 2.4 Match the column A with column B to make meaningful statements A but they are not classified as expenses There are some transactions that take cash out of the business, B nor is it counted as expense when paid back Money borrowed from a lender is not considered income, C and each is important to the overall health of the business Interest paid for loans is counted as expense, D they may still have a negative cash flow 2.5 Although investors are making profit All the three main financial statements give different angles of the business, E and it will appear as an expense and use of cash Fill in the blanks with the following words assets and debts business plans expenses movement on the left on the right records revenue in the middle whether or not Financial statements are _(1) _ that provide an indication of an individual’s, organization’s, or business’ financial status There are three basic types of financial statements: balance sheet, income statement, and cash-flow statement Typically, financial statements are used in relation to business endeavors Balance sheet are used to provide insight into a company’s (2) at a particular point in time Information about the company’s shareholder equity is included as well Typically, a company lists its assets (3) side of the balance sheet and its debts 37 Unit 3: Financial statements and liabilities (4) Sometimes, however, a balance sheet has assets listed at the top, debts _(5) _, and shareholders’ equity at the bottom Income statement present information concerning the (6) earned by a company in a specified time period Income statements also show the company’s (7) in attaining the income and shareholder earnings per share At the bottom of the income statement, a total of the amount earned or lost is included Often, income statements provide a record of revenue over a year’s time Cash-flow statements provide a look at the _(8) _ of cash in and out of a company These financial statements include information from operating, investing, and financing activities The cash-flow statement can be important in determining _(9) _ a company has enough cash to pay its bills, handle expenses, and acquire assets At the bottom of a cash-flow statement, the net cash increase or decrease can be found The average individual does not typically have a use for financial statements However, sole proprietors may use them in the same manner as other businesses High-net-worth individuals may also use them for obtaining loans, participating in investment deals, and developing financial, tax, and (10) In some cases, personal financial statements may be used when running for a government office 3.1 Listening Listen to a lecture about the Financial statements TWICE and decide if the statements below are TRUE (T) or FALSE (F) Questions T/F The users of financial statements are quite various In order to use financial statements, users must know everything about accounting Financial statements are classified into four main types The balance sheet shows assets and liabilities of a company In a typical balance sheet, assets are listed on the right, and liabilities on the left 3.2 Listening Listen to a lecture ONCE again and fill ONE word into each blank below Now, let’s move on to the income statement Income statement present (1) _ concerning the (2) _ earned by a company in a (3) _ time period Income statement also show the company’s (4) _ in attaining the income and shareholder (5) _ per share At the bottom of the income statement, a total of 38 Unit 3: Financial statements the amount (6) _ or lost is included Often, income statements provide a record of revenue over a year’s time Ok, right And next is the cash flow statement Cash-flow statement provide the (7) _ of cash in and out of a company These financial statements include information from (8) _, investing, and financing activities The cash-flow statement can be important in determining whether or not a company has enough cash to pay its bills, handle (9) _, and acquire assets At the (10) _ of a cash-flow statement, the net cash increase or decrease can be found And finally, I will give you the overview of the last basic type of financial statement Shareholders’ equity show (11) _ in a company's or organization’s retained earnings over a specific period of time These statements show the beginning and final balance of retained earnings, as well as any adjustments to the (12) _ that occur during the reporting period This information is sometimes included as part of the balance sheet, or it may be (13) _ with an income statement However, it is frequently provided as a completely separate statement The average individual does not typically have a use for financial statements However, sole proprietors may use them in the same manner as other businesses High-net-worth individuals may also use them for the purpose of obtaining loans, participating in (14) _ deals, and developing financial, tax, and business plans In some cases, personal financial statements may be used when running for a (15) office 4.1 Select the correct choice to complete each sentence The suggested time for completing the exercise is minutes The income received by someone who lends money is called _ a dividends b interest c loan Last year we issued bonus shares and $2 million a raised b rose c arose Assets are what you _, liabilities are what you _ a owe – own b own – owe c own - owl A preference share receives a dividend _ the other classes of share a before b when c after ESP is a company’s distributable profit divided by the number of _ a shareholders b dividends c shares 39 Unit 3: Financial statements 4.2 Fill in each gap with ONE word from the word list below The suggested time for doing this exercise is minutes balance sheet earning per share payroll cash flow statement profit and loss account accounting period business plan dividend A shows a company’s financial condition at the end of an accounting period You can know how much the profit or loss of a company during a given period by looking at the A reports a company’s inflows and outflows of cash The is caculated by dividing a company’s distributable profit by the number of shares The payments to a company’s employees are listed in a The period of time reflected in financial statements, usually either the calendar year or a quarter is called an Before setting up a company, the entrepreneur is expected to make a which shows the company’s possible income and expenditure All shareholders look forward to a high as a return of their investment in shares 5.1 Based on the information in the two texts above, answer the following questions with your own words What does a balance sheet provide? …… .………… What does an income statement show? …… .………… What are reported in a cash flow statement? Why? …… .………… How the financial statements relate to each other? …… .………… 5.1 Case study Foward Investments (FI) has headquarter in Singapore It is run by a group of rich people who invest money in companies It is willing to take risks by buying shares of start-up or small companies, but also puts money into larger companies which have good prospects for growth 40 Unit 3: Financial statements At present, it has $10 million to spend and it has chosen three companies as potential investments TECHNOPRINT Technoprint is a manufacture of office equipment, based in Warsaw, Poland Its main products are inkjet and laser printers Present share price: $4.14 High (last year): $5.42 Low (last year): $3.59 Turnover ($ million) Pre-tax profit ($ million) Earning per share (cents) Dividend per share (cents) Last year 90.8 10.9 51 5.7 years ago 88.3 9.9 42 3.9 years ago 69.4 4.8 24 0.6 Turnover for the first months of this year: $64.5 million UNIBRAND Unibrand is a fashion retailer based in Amsterdam selling a variety of international brands Present share price: $5.72 High (last year): $8.58 Low (last year): $3.88 Turnover ($ million) Pre-tax profit ($ million) Earning per share (cents) Dividend per share (cents) Last year 370 52.7 19.5 2.2 years ago 208 30.1 12.9 1.8 years ago 283 27.86 11.14 1.65 Turnover for the first months of this year: $ 204 million ONLINE FASHIONS OLF is based on its website www.OLF.com Its target audience is fashion-concious women aged between 30 and 45 who want to keep up with the lastest trends in clothing and accessories Present share price: $5.73 High (last year): $8.96 Turnover ($ million) Last year Pre-tax profit ($ million) Low (last year): $2.71 Earning per share (cents) Dividend per share (cents) 19.3 2.1 0.38 nil years ago 9.1 -2.561 3.8 nil years ago 4.9 -2.862 -5.6 nil Turnover for the first months of this year: $ 204 million And here are the comments of the three companies’ CEOs to investors 41 Unit 3: Financial statements Technoprint It’s been another excellent year for our inkjet sales They increased fourteen percent worldwide, even though prices generally for inkjets have fallen because of competition Our sales of cartridges increased by over twelve percent Our sales of laser printers remained steady Our new laser printer has great potential We expect it to dominate the market as it has several unique features We will continue to reduce costs by sourcing components from low cost countries Unibrand We plan to increase sales by at least ten percent this year We have excellent sales opportunities in South America and Asia We are opening twenty new sales offices in those areas and increasing our marketing effort We have already launched a new perfume and we expect it to be very successful Olf I am delighted to report another outstanding performance Visits to our website have increased to 82,000 daily We now have over 400,000 regular users We are launching a multimedia advertising campaign to promote our new ranges of jewellery and travel accessories We expect to increase our sales target by at least fifty percent and become the leading online designer clothing company Task You are a financial executive of FI Study all the statistics in the reports above and make a short presentation to your Director about which company/ companies FI should invest in and/or what proportion of $10 million FI will invest in each company Compare your decisions with your partner(s) 42 Unit 3: Financial statements 6.1 Describing a Graph Overview of a graph A graph is a diagram, usually a line or curve, which shows how two or more sets of numbers or measurements are related The names of the axes on a graph are the vertical axis and the horizontal axis The vertical axis is sometimes called the y axis, and the horizontal axis is sometimes called the x axis There are some types of lines used to present information on a graph _: solid line ……………………….: dotted line - - - - - - - - - - - - - - - -: broken line Language of writing Here are some useful expressions for you to describe the graph Expressing movement: verbs and nouns Verbs (past tense) Rose (to) increased to went up to climbed to boomed fell (to) declined (to) decreased (to) decreased to zero dipped (to) dropped (to) went down (to) reduced (to) Nouns a rise an increase growth an upward trend a boom (a dramatic rise) a fall a decline a decrease a drop a slump (a dramatic fall) a reduction 43 Unit 3: Financial statements Verbs (past tense) levelled out (at) did not change remained stable (at) remained steady (at) stayed (at) stayed constant (at) maintained the same level fluctuated (around) peaked (at) stood (at)* Nouns a levelling out no change a fluctuation reached a peak (of) * stood at (use this phrase to focus on a particular point, before we mention the movement, for example: In the first year, unemployment stood at ) Describing the movement dramatic dramatically huge steep steeply considerable considerably marked markedly slight slighty minimal minimally Adjectives and adverbs sharp sharply enormous enormously substantial substantially significant significantly moderate moderately small Describing the speed of change Adjective rapid quick swift sudden steady gradual slow 44 Adverbs rapidly quickly swiftly suddenly steadily gradually slowly Unit 3: Financial statements 6.2 Writing Practice Write a report for a university lecturer describing the information in the graph below The suggested time for completing the exercise is 40 minutes PROFITS OF AFC FROM 1990 TO 2005 Unit: billion dollars 45 Unit 3: Financial statements English temps Vietnamese equivalents A - Accounting period - Kỳ kế toán B - Balance sheet - Bảng cân đối kế toán C - Cash flow statement - Báo cáo lưu chuyển tiền tệ - Cleanup cost - Chi phí lý E - Equation - Phương trình, cơng thức - Earnings per share - Lãi cổ phần F - Financial statement - Báo cáo tài I - Income statement - Báo cáo thu nhập - Intangble asset - Tài sản vơ hình P - Physical property - Tài sản hữu hình - Payroll - Bảng lương, tổng quỹ lương S - Shareholders’ equity 46 - Vốn chủ sở hữu ... Unit: billion dollars 45 Unit 3: Financial statements English temps Vietnamese equivalents A - Accounting period - Kỳ kế toán B - Balance sheet - Bảng cân đối kế toán C - Cash flow statement -... year): $3. 88 Turnover ($ million) Pre-tax profit ($ million) Earning per share (cents) Dividend per share (cents) Last year 37 0 52.7 19.5 2.2 years ago 208 30 .1 12.9 1.8 years ago 2 83 27.86 11.14... (3) _ time period Income statement also show the company’s (4) _ in attaining the income and shareholder (5) _ per share At the bottom of the income statement, a total of 38 Unit 3:
