INGLS EMPRESARIAL

UD 1: Banca y Finanzas

UNIDAD 1: BANCA Y FINANZAS

1.1 THE DEVELOPMENT AND EVOLUTION OF A COMPANY
1.1.1 The development and evolution of a company
1.1.1.1
1.1.1.2
1.1.1.3
1.1.1.4

Different types of company

The links between companies
The structure of a company
The cycle of a company

1.1.2 Analysing the financial results of a company

1.2.1.1 The Accounts
1.2.1.2 The results: profits, losses, etc.
1.2 THE ACTIVITY OF A COMPANY
1.2.1 The main activity of a company
1.2.1.1Activities of the Company
1.2.2 The Internal Activity of a company
1.2.2.1 The organisation of a company
1.2.2.2 Internal Processes
1.2.2.3 Relationships with third-parties
1.3 BANK SERVICES
1.3.1 The Bank
1.3.1.1 Types of Bank
1.3.1.2 Banking Services
1.3.2 The Capital
1.3.2.1 Finance and Investment
1.3.2.2 Financial transactions in the Company
1.4 STOCK EXCHANGE
1.4.1 Financial environment of the company
1.4.1.1 The financial health of a company
1.4.1.2 Shares and Ownership
1.4.2 Financial Movements
1.4.2.1 The Markets
1.4.2.2 Newspapers: The share page

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1.1 THE DEVELOPMENT AND EVOLUTION OF A COMPANY

Introduction
In this unit we will examine themes related to the structure and development of a
company.
Firstly, we will look at the most important legal forms that a company can have and
the links and relationships between companies, reviewing terms such as: branch
subsidiary and franchise
Well then examine the hierarchy within public companies and the names of the
most senior positions. Moving on well show you the English that you will need to
talk about the typical lifecycle of a company: foundation, merger etc.
In part two our attention turns to basic accounting terms. How can we discuss the
financial health of companies? What are the basic financial documents, and how
can we describe their contents in English?

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1.1.1 The development and evolution of a company

1.1.1.1 Different types of Company

a) Limited Liabilty Companies. Sociedad de responsabilidad limitada
This is by far the most common structure for a company in both the English and
Spanish-speaking worlds. The owners set up the company with a sum of company
(the capital) and their financial liability is limited to this initial investment. There
are two main types:
Private Limited Companies (Ltd)
A Private Limited Company (in the UK) or Limited Liability Company (USA) is a
company whose capital is divided up into shares, but which is not listed on the
stock markets.
Public Limited Company (PLC)
A Public limited company (in the UK) or Listed company (USA) is a limited liability
company whose shares are bought and sold on the Stock markets.
The bank was originally set up as a private limited company over a hundred years
ago, but is now a public limited company.
El banco fue creado hace ms de cien aos, como sociedad limitada, pero en la
actualidad es una sociedad annima.

b) Partnerships Sociedad colectiva / sociedad civil

A type of organisation owned and managed by two or more partners. A partnership
does not have share capital and the partners are normally personally liable for all of
the debts. In the United Kingdom and the USA it is common for professionals such
as lawyers, architects, accountants or consultants to form partnerships rather than
limited liability companies.
Managing Partner The Partner who manages the company on a day-to-day
basis.
Silent Partner A partner who is not actively involved in the day-to-day work of
the partnership but who retains a financial interest.
The partnership collapsed as a result of the criminal activities of one of the
partners.
La sociedad fracas debido a los delitos cometidos por uno de los socios.

c) Co-operative Cooperativa
A type of commercial enterprise which is jointly owned by a large number of
smaller organisations or individuals and which is run for the mutual benefit of all
the owners.

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Co-operatives are very common in the agricultural sector, where they give small
farmers the economies of scale (greater bargaining power etc) normally only
associated with large companies.
The largest co-operative in the country was set up in 1989 to enable its members
to buy paper in large quantities at low prices.
La mayor cooperativa del pas fue creada en 1989 con el objetivo de facilitar a sus
miembros la compra de papel en grandes cantidades a precios reducidos.
d) Franchise Franquicia
A type of commercial agreement whereby one company (Franchisee) does business
using the name, brands and products of another larger company (Franchisor). This
form of company is very common in the fast-food sector, where companies such as
MacDonalds make franchise agreements with smaller companies to open and run
MacDonalds restaurants.

In a franchise agreement, the Franchisee is responsible for the success of the

business in the short-term but the Franchisor is responsible for the long-term
success.
En una relacin de franquicia, el franquiciado es el responsable de que su negocio
vaya bien en el da de hoy, pero el franquiciador es el responsable de que el
negocio vaya bien en a largo plazo.

e) Other types of Organisations

Non-Governmental Organisation (NGO) Organizaciones no gubernamentales
Non-Governmental Organisations were originally set up to raise money and carry
out work for causes such as the elimination of poverty or the protection of the
environment. Nowadays many NGOs have a commercial arm which contributes
funds to the main organisation, often via the sale of fair-trade products
(productos de comercio justo). Well known NGOs include Greenpeace and Intermon
Oxfam.

Liablity
The word liability means legal responsibility for debts or financial penalties. The
associated verb is liable. We use both the verb and the noun with the preposition
for:
-

In a partnership, the partners are personally liable for all debts of the
organisation.

Pronunciation: PLC and Ltd

Notice that in written English we use capitals for all the letters of PLC whereas we
only capitalise the L of Ltd. This change is also reflected in the pronunciation.
For PLC we pronounce the three letters separately: P-L-C but for Ltd we say
the entire word: Limited. We do not pronounce the letters separately. L-T-D.

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1.1.1.2 The links between companies

a) Group
A Collection of companies which belong to a larger enterprise (The parent
company) and whose activities are normally coordinated in some way or another.
Our firm is part of a group whose parent company is based in Hong Kong.
Nuestra empresa pertenece a un grupo cuya sociedad matriz es de Hong Kong.

b) Subsidiary Subsidiaria / filial

A company which belongs partially or entirely to another larger enterprise.
The Chilean subsidiary of Micorsoft has signed an important contract with the
Government.
La filial en Chile de la empresa Microsoft ha firmado un contrato importante con el
Gobierno.

c) Holding Company Holding, Sociedad de Cartera

The parent company in a group. Normally a holding company does not carry out
commercial activities itself, but, instead, acts as the group administrator. The
commercial activities manufacturing, mining, retail etc are carried out by the
other companies in the group.
Philip Morris is a holding company which owns several major American companies
in the tobacco and food industries.
Philip Morris es un holding que posee varias empresas estadounidenses de gran
importancia en el sector tabacalero y en el alimentario.
FCC is structured as a holding, with 6 specialised companies which in turn control
smaller subsidiaries.
FCC est estructurada como unholding con seis empresas especializadas de las
que a su vez dependen otras compaas de menor entidad.

d) Multinational Multinacional
The general term is given to large (usually very large) corporations which have
business interests in many different countries.

e) Conglomerate Conglomerado
A type of group whose subsidiary companies are active in different sectors of the
economy, for example cement and agriculture. A conglomerate is normally formed
by the purchase over a period of time of many smaller companies, often in an effort
by the original company to expand into different sectors.

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To own and owned by

When we refer to the relationship between a parent company and its subsidiaries
we often use the verb own - which in Spanish translates as poseer or ser
dueo de either in the active or the passive:
-

FCC owns several companies in different sectors.

The company is owned by a large multinational.

Where one company (or individual) does not hold 100% of the share capital of
another we combine to own with the adverb partially:
-

The supermarket chain is partially owned by a Japanese bank.

1.1.1.3 The structure of a company

a) The Hierarchy of a Public Limited Company (PLC) (UK)
Board of Directors
Junta Directiva / Consejo de Administracin
Chairman of the Board
Presidente de la Junta / Consejo de Administracin
Managing Director (MD)
Director(a) Ejecutivo(a)
Deputy Managing Director (MD)
Director(a) Ejecutivo(a) Adjunto (a)
General Manager
Director(a) General

b) The Hierarchy of a Listed Company (USA)

Board of Directors
Junta Directiva / Consejo de Administracin
President
Presidente(a)
Chief Executive Officer (CEO)
Gerente General ((check))
Senior Vice President
Vicepresidente(a) Primero(a)

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Director
Director(a)
Manager
Gerente
The Board of Directors of the Airline has agreed today to appoint Jose Pascual as
the new president of the group, replacing Barbara Castano.
El consejo de administracin de la aerolnea ha acordado hoy nombrar a Jos
Pascual nuevo presidente del grupo, en sustitucin de Brbara Castano.

Appoint and Employ

In English there are many verbs related to employment and recruitment. To hire
and To employ are perhaps the two most common in the USA and UK
respectively. However with senior positions we normally use the verb to appoint
or, occasionally, to name:
-

The company has appointed a new Chief Executive

The firm has named John Stevens as the new Managing Director.

Notice the word order in the second sentence and the use of the preposition as.

1.1.1.4 The cycle of a Company

a) The beginning
Set up fundar / crear
Establish - fundar / crear
Found - fundar
The company was set up in 1972
La compaa fue creada en 1972
Her grandfather established a small business at the end of the war.
Su abuelo abri un pequeo negocio al finalizar la Guerra.
Rolls Royce was founded by Henry Royce and Charles Stewart Rolls in 1904
Rolls-Royce fue fundado por Henry Royce y Charles Stewart Rolls en 1904.
Telefonica set up its subsidiary, Movistar, as a move into the mobile phone market.
Telefnica cre su subsidiaria, Movistar, para introducirse en el Mercado de
telefona mvil.

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b) Expansion and Changes
Expand Expandir
Specialize Especializar
Diversify Diversificar
Branch out - Diversificar
Set up Iniciar
Enter - Introducir
Centre/Concentrate Centrar/Concentrar
Focus - Enfocar
The firm specializes in youth travel and adventure holidays.
La empresa se especializa en viajes para jvenes y turismo de aventura.
The company set up its China Division in 1982.
La empresa estableci su divisin china en 1982.

c) The end financial problems

Just as companies are continually being created, so they continually cease to
operate. As you would expect for a language so closely related to business and
trade, English has developed a rich and varied vocabulary to describe the death of a
company.

Bankruptcy Quiebra, bancarrota

Insolvent Insolvente
Voluntary Administration Disolucin voluntario, liquidacin voluntaria
Voluntary Liquidation Liquidacin voluntaria
Creditor Acreedor
Receiver, Administrator Administrador judicial, sndico
To
To
To
To
To
To

go out of business - Quebrar / ir a la bancarrota

go bust - Quebrar / ir a la bancarrota
go bankrupt Quebrar / ir a la bancarrota
be wound up Entrar en liquidacin
be declared bankrupt Ser declarado en quiebra
file for bankruptcy Presentar una solicitud de declaracin de quiebra

Lloyds Ltd went into voluntary administration in June 2004.

Lloyds Ltd entr en la administracin voluntaria en junio de 2004.
The receivers have been called in at Janeway Trading Inc.
En Janeway Trading Inc. han llamado a los sindicatos.
Unable to pay its many creditors, Maguire & Patterson went into liquidation.
Al no poder pagar a sus numerosos acreedores, Maguire & Patterson entr en
suspensin de pagos.
Many small shops have gone out of business since the arrival of large supermarket
chains
Con la llegada de las grandes cadenas de supermercados muchas tiendas pequeas
han tenido que cerrar.

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The company filed for bankruptcy at the end of July.
La empresa present una solicitud de declaracin de quiebra en el final de Julio.
The company was formally declared bankrupt in March
La empresa fue declarada en bancarrota en marzo.

Merger and takeover

We use takeover when one company buys another company (normally smaller).
We use merger when two companies (normally of a similar size) agree to combine
and become a single entity.
Note that the verb merge (fusionar) can be both transitive and intransitive,
although the latter use is more common.
Intransitive
The two companies merged in 2002.
Las dos empresas (se) fusionaron en 2002.
Transitive
Santander Bank plans to merge its Brazilian and Argentinean divisions.
El Banco Santander planea fusionar su divisin brasilea con su divisin argentina.

Practical English
Two employees of Wise Instruments discuss a newspaper report about the possible
takeover of their company by the Italian firm Zola.
Marcel Robben: Whats this about a takeover then?
Sarah Dixon: Well, the article says that our board of directors are considering a
takeover bid from a company called Zola.
Marcel Robben: Ive never heard of them.
Sarah Dixon: Neither had I. They are Italian, and apparently they are like a
holding company. They have interests in many companies, across a range of
sectors. They were established in 1850, so they must be doing something right to
have been in business so long!
Marcel Robben: Sounds promising. We need better financial management. I
heard weve been considering filing for voluntary liquidation. Our finances are that
bad!
Sarah Dixon: Yes. I know there were rumours that we could go bust. Still, if the
takeover goes ahead I suppose they might merge our company with another and
that will mean job losses.

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Marcel Robben: Thats right, I hadnt thought of that.

Sarah Dixon: Anyway, nothings official yet. Lets wait and see if the MD says
anything at the staff meeting on Friday.
Marcel Robben: Yes, Im sure hell have something to say!

1.1.2 Analysing the financial results of a company

1.1.2.1 The Accounts

a) Financial Documents
The Accounts or Company accounts ( Las cuentas) are the general terms used
to refer to the combination of all a companys financial documents.

b) The Profit and Loss (P&L) Account Cuenta de resultados, Cuenta de prdidas y
ganancias
The profit and Loss Account (UK), or Income Statement (USA) contains the
following information:
Revenue - Beneficios, ganancias
Expenditure Gastos
Turnover Facturacin, volumen de negocio
Overheads Gastos generales, costes indirectos
The profit and loss account shows a trading profit of $86,000.
La cuenta de resultados indica unos beneficios comerciales de $86,000.
Could you give me a breakdown of our overheads please?
Podras darme un desglose de los gastos indirectos?

c) The Balance Sheet Balance general, estado contable

The Balance Sheet shows the overall financial situation of a company on a specific
date (usually the end of the year). The Balance Sheet lists:
Assets Activos
An asset is normally defined as any item of economic value owned by an individual
or corporation, especially that which could be converted to cash.
Liabilities Pasivos, Obligaciones
All the money that a company will have to pay, in terms of taxes, mortgages and
money owed to suppliers.
The companys balance sheet showed a sharp rise in borrowings.

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El balance de la compaa indicaba una brusca subida en la suscripcin de
prstamos.
All their assets had to be sold to pay their debts.
Tuvieron que vender todos sus activos para pagar.

d) Depreciation - Depreciacin
Machinery and other assets on the balance sheet are usually subject to
Depreciation, this is the accounting term used to describe the reduction in value
of an asset over time.

Creative Accounting
Creative Accounting or Creative Accountancy is a relatively new word which
refers to the organisation and presentation of company accounts in a way that
gives a favourable impression, of its financial situation by employing a liberal and
unorthodox interpretation of general accountancy procedures. Nowadays, in most
situations the term creative accountancy is used as a criticism.
-

The company has used creative accountancy to conceal problems in its South
American operations.

1.1.2.2 The results: profits, losses etc

a) Reporting
All companies are required by law to produce formal reports on their financial
situation. Typically, a companys accountants (contables) will compile the financial
information and this will then be officially verified by independent auditors
(auditores independientes).
Those companies which are listed on the stock market are subject to a more rigid
regime of financial management and reporting so as to ensure maximum
transparency and are obliged to publish their results on a quarterly basis (four
times a year).

b) Types of Profit
Operating Profits
Profit (or loss), on the principal activities of a company, calculated before tax and
interest.
Pre-tax Profits

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Pre-tax profits or net profits are the profits of a company after all money costs
have been deducted.
I.E Sales Revenue minus salaries, rent, fuel, raw materials, loan interest payments
and depreciation.
Gross Profits
Gross Profits are Net Profits before depreciation and interest.
The company made a loss of $35million last year.
La empresa tena perdidas de $35 millones el ao pasado.
In the fourth Quarter of the 2007 financial year Apples profit was 67% more than
in the corresponding period of the year before.
Apple gan en el cuarto trimestre del ejercicio fiscal de 2007 un 67% ms que en el
mismo periodo del ao anterior.
Apple has just published its fourth quarter results, showing an increase in both
revenue and profits.
Apple acaba de publicar sus resultados fiscales de su ltimo cuarto del ao, que
indica que tanto sus ingresos como sus ganancias crecieron.
The company has obtained pre-tax profits of 356.8 million.
La empresa ha obtenido un resultado neto atribuible de 356,8 millones de euros.

to make + profit/loss
Remember that we use the verb make not do when we refer to profits and
losses. It is also possible to use the verb generate with profits, although it is
less common with the word losses
Quarter and Quarterly
We use quarter to refer to the four periods, of three months each, which make up
the financial year.
The appropriate adjective is quarterly, which is most commonly seen in
conjunction with reports profits and sales
-

The quarterly report shows a decline in profitability.

New products have helped Microsoft's quarterly profits rise 23 per cent.

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A financial analyst quizzes a company director about his firms quarterly results.

Analyst How would you sum up the results for this quarter?
Director Well, we are very happy with the quarterly results as weve seen a rise
in both turnover and profits.
Analyst Thats true, but your pre-tax profits were well below market
expectations. How do you explain that?
Director Obviously, Im sorry if shareholders feel disappointed, but we cant
control external analysts. Our profits are in line with the forecasts which we
presented earlier in the year.
Analyst Granted. But, what about costs? Your expenditure has risen beyond
even your own expectations. Isnt this a damaging situation?

Director No one likes to see a rise in expenditure, but the main cause has been
our expansion into other markets and particularly a big investment in our South
American subsidiary.
Analyst So, your predictions for the next quarter?
Director Im happy to say that we expect a rise of 2.5% in turnover and a 5%
rise, year-on-year in pre-tax profits. Overall the company is in very good shape!

Vocabulary
Private Limited Company
Public Limited Company (PLC)
Partnership
Cooperative
Franchise
Group
Subsidiary
Holding Company
Multinational
Conglomerate
Bankruptcy
Creditor
Receiver
Company Accounts
Profit and Loss Account
Balance Sheet
Assets
Depreciation

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1.2 THE ACTIVITY OF A COMPANY

Introduction
This unit covers the actions undertaken by a company in two basic areas. Firstly,
what is a companys principal activity and what are the phrases that we can use to
describe it in English? We review the main sectors of the economy and related
vocabulary, such as the different rolls that companies can have within the same
sector. Special attention is paid to manufacturing and construction and new
technologies.
Youll also want to know how to talk about the internal processes of your company,
so in the second chapter we look at company departments and the main activities
that they are involved in, from purchasing to logistics.

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1.2.1 The main activity of a company

1.2.1.1 Activities of the Company

a) Sectors of the Economy
Banking Banca
Telecommunications - Telecomunicaciones
Biotechnology - Biotecnologa
Insurance - Seguros
Advertising & Marketing Publicidad y Marketing
Food - Alimentacin
Leisure Industry - Industria del ocio
Information Technology - Informtica
Transport - Transporte
Health - Salud
Consulting Consultora
Investment - Inversin
Media Medios de comunicacin (prensa, radio, Internet)
Financial Services - Servicios Financieros
Property - Inmobiliaria
Automobile - Automviles
Textile Textil
Shipbuilding - Construccin naval
Steel - Acero
Mining Minera
Pharmaceutical - Farmacutica
Petrochemical - Petroqumica
Architecture - Arquitectura
Engineering Ingeniera
Civil Engineering Ingeniera Civil
Agriculture - Agricultura
Utilities Servicios Pblicos

b) Talking about Sectors and specialisations

GSK is a company dedicated to the research and development of medicines.
GSK es una empresa dedicada a la investigacin y desarrollo de medicamentos.
XYP Vending specialises in the installation and maintenance of vending machines.
XYP Vending se dedica a la instalacin, y reparacin de mquinas vending.
The company concentrates on two main business areas: Petroleum and
Petrochemicals.
La compaa concentra su actividad en 2 grandes reas de negocio: la de petrleo y
la de petroqumica.
The group has acquired a small Spanish construction company.
El grupo ha adquirido una pequea empresa constructora espaola.

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Founded in 1994, Bain has grown rapidly and is now one of the main strategic
consulting companies in Spain.
Fundada en 1994, Bain ha crecido rpidamente y es ya una de las principales
compaas de consultora estratgica en Espaa.
The Leisure industry in the UK continues to grow in importance.
Sigue en aumento la importancia de la Industria del ocio en el Reino Unido.

c) Types of Company
Wholesaler - Mayorista
Distributor - Distribuidor
Retailer - Minorista
Dot Com Punto com
SME (UK) Small and mdium-sized enterprises PYME
Agency - Agencia
A family company Una empresa familiar
Market leaders Lderes en el Mercado

Our company is market leader in the financial services sector.

Nuestra empresa es lder en el mercado de los servicios financieros.
Babel is a wholesaler of beauty products.
Babel es distribuidor mayorista de productos de esttica.

d)

Premises

Plant - Planta
Factory - Fbrica
Laboratory - Laboratorio
Installation - Instalacin
Offices - Oficinas
Headquarters Oficina central
Depot - Depsito
Warehouse - Almacn
Refinery - Refinera
Distribution Centre Centro de distribucin

e) Principal Sectors Heavy industries and manufacturing

To
To
To
To
To

produce Producir
manufacture Fabricar
extract Extraer
process Procesar/ Transformar
refine Refinar

Raw materials Materia prima

Assembly Line Cadena de montaje
Shift Turno
Mine - Mina
Quarry - Cantera
Energy - Energa

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Since 1995 the firm has been manufacturing toys for the US market.
Desde 1995 la empresa fabrica juguete para el Mercado estadounidense.
As well as extracting it, the corporation processes and markets the petroleum.
Adems de extraer petrleo, la empresa lo procesa y lo comercializa.
Weve begun the process of expanding capacity in our Mexico refinery.
Se ha puesto en marcha la ampliacin de capacidad de la refinera de Mxico.
BP has interests in renewable energy through its solar power subsidiary.
BP tiene intereses en el campo de las energas renovables a travs de su filial de
energa solar.

f) Principal Sectors New Technologies

Web design Diseo Web
Web Hosting Alojamiento Web
Network -Red
Solution - Solucin
Platform Plataforma
Systems Integration Integracin de sistemas
Microelectronics - Microelectrnica
Telecomunications Telecomunicaciones
R&D (Research and Development) I+D (Investigacin y Desarrollo)
To Implement - Implementar
To Develop - Desarrollar
To Research Investigar
At the beginning of the 1960s IBM transformed itself into a company dedicated
exclusively to information technology.
A comienzos de los aos 1960, IBM se transform en una empresa dedicada
exclusivamente a la informtica.
In Hardware, IBM has a wide range of solutions, with 5 basic platforms.
En Hardware. IBM dispone de un amplio abanico de soluciones con 5 plataformas
bsicas.
Microsoft is a company which manufactures and markets tools, programmes and
services related to Information Technology.
Microsoft es una empresa que fabrica y comercializa herramientas, programas y
servicios relacionados con la informtica.
It is an internet company which provides services such as hosting and domain
name registration.
Es una empresa que provee servicios de Internet, tales como alojamiento y registro
de dominios.

g) Principal Sectors Construction

Construction Company - Constructor
Engineer - Ingeniero
Architect - Archiquecto
Architecture - Arquitectura
Estate Agent - Inmobiliaria

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Real Estate Agent - Inmboliaria
Planning permission- Permiso de obras
Plot / Parcel - Solar/ Terreno
Building Site Obra / Terreno
To Build Construir
To Construct - Construir
The new stadium will be built on the same site as the old one.
El nuevo estadio se construir en el mismo terreno del antiguo.
On a 35 hectare site the construction company plans to build a new 55,000-seater
stadium with a retractable roof.
En una superficie de 35 hectreas la constructora ha proyectado construir un nuevo
estadio con 55.000 plazas y techo retrctil.
The Town Council gave two reasons for denying planning permission.
El Ayuntamiento aleg dos motivos para negar el permiso de obras.

Utility Companies
In the UK, a utility company or utility is a type of enterprise which provides
essential public services, in particular electricity, gas, telecommunications and
water supply. Most of these services require a huge infrastructure and were
originally provided by state-owned companies, until the privatisations of the 1980s.

Dot coms
The word dot com began life in the 1990s as the internet grew in popularity. Dot
com refers to any company whose principal area of business is focused on the
internet. The word is derived from the standard ending for a web address .com.
Famous dotcoms include the book retailer Amazon and the online auction company
Ebay.

Conversation 1
Claire and Simon discuss problems in the US property market:
Claire Simon, what do you think of these problems with the housing market in
the USA?
Simon Well, I think a lot of the problems are caused by over-supply in the
housing market. The constructors have been building too many new homes.
Claire Im not sure thats the root of the problem. I think that it has been too
easy for the constructors to get planning permission, and thats the fault of the
local authorities.

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Simon Yes, Youre probably right.

Claire - It must be a difficult time for estate agents (or real estate agents as they
say in the US) because houses just arent selling, and house prices are falling.
Simon - True, and if prices are decreasing it means fewer new homes will be
constructed and thats bad news for architects too.
Claire Thats right, Im sure everyone involved in the construction industry will be
relieved when the crisis is over! Im glad I work in TV!

1.2.2 The internal activity of a company

1.2.2.1 The organisation of a company

a) The Structure
An individual company is usually divided up into smaller sections.
Use of
terminology is not uniform. However, the most common terms are as follows:
Business Groups - Grupos de negocio
Division - Delegacin
Department - Departamento
Unit - Unidad
Group Grupo
Team - Equipo
Branch Delegacion / Sucursal
Sales Offices - Oficinas Comerciales
working groups Grupos de trabajo

BAAs armaments division was sold in 1989.

La divisin de BAA fue vendida en 1989.
The Finnish company Nokia is made up of three business groups: Mobile Phones,
Multimedia and Business Solutions.
La empresa finlandesa Nokia abarca tres grupos de negocio: Telfonos Celulares,
Multimedia y Soluciones Empresariales.
The German company has branches in 5 of Spains autonomous regions.
La Empresa alemana tiene delegaciones en 5 comunidades autnomas espaolas.
Danzas has 50 sales offices worldwide, of which 30 are in Europe.
Danzas posee 50 oficinas comerciales en todo el mundo, de las cuales 30 estn en
Europa.

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b) Typical Departments in a Company

Marketing department - Marketing
Accounting department Contabilidad
Accounts Contabilidad (less formal)
Human Resources / Personnel Recursos Humanos
Public Relations Relaciones Pblicas
Purchasing Compra
Sales Ventas (check)
Market Research Investigacin de mercados
Product Development Desarrollo del producto
Sales Promotion Promocion de ventas
Logistics Logstica (Transportes/Almacenamiento)
Training - Formacin

To be made up of
When we refer to the way in which a larger entity is divided, we often use the
phrasal verb made up with the preposition of:
-

The company is made up of three business groups.

Each business group is made up of four units.
A unit is made up of 4 people.

1.2.2.2 Internal Processes

a) The Management of a company - gestin
Management Los dirigentes
Middle management Mando intermedio
To manage Dirigir / Gestionar
To run Dirigir / Gestionar
To own Poseer
The same family has run this successful whisky distillery for more than fifty years.
Esta prspera destilera de whisky lleve ms de cincuenta aos en manos de la
misma familia.
The company is owned by a wealthy German family.
La empresa es propiedad de una rica familia alemana.
Three generations of the same family have run the company since its foundation in
1926.
Tres generaciones de la misma familia han dirigido la empresa desde su fundacin
en 1926.

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b) Quality Control - Control de calidad

Defects - Defectos
Product recall Pedido de devolucin de producto
Testing Pruebas
Regulations Regulacin
Guidelines - Directrices
Defective - Defectuoso
To withdraw Retirar del mercado
To recall (products) Retirar del mercado
The ISO 9000 regulations are made up of requirements and guidelines which enable
companies to set up and run a quality control system.
La serie de normas de ISO 9000 consta de requisitos y directrices que permiten
establecer y mantener un sistema de control calidad en la compaa.
In the summer Mattel recalled 12 million Chinese-made toys
En el verano Mattel retiro 12 millones de juguetes de fabricacin china.
A serious defect was discovered in the product during testing.
Un defecto serio fue descubierto en el producto durante las pruebas.

c) Purchasing Compras
Supplier Proveedor
Order Pedido
Purchase Compra
Supplies - Suministros
To
To
To
To
To

buy - Comprar
order - Pedir
purchase - Comprar
bill Facturar / Cobrar
Supply Suministar

Purchasing departments must closely control negotiations with Suppliers.

Los departamentos de compras tienen que controlar de cerca los procesos de
negociacin con sus proveedores.
The purchasing department has decided to buy from foreign suppliers in an effort to
reduce costs.
El departamento adquisitivo ha decidido comprar de proveedores extranjeros en un
esfuerzo para reducir gastos.
We supply and install all types of doors, kitchens and wardrobes.
Suministramos e instalamos todo tipo de puertas, cocinas y armarios.

d) Customer Service - Atencin al cliente

Call Centre Call Center
Complaints Reclamaciones

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After-sale Posventa
Customer Service Agents Agente de atencin al cliente
Toll-free (US)
To Assist - Atender
To make (a complaint) Hacer (una reclamacin)
To make a complaint please contact our Customer Services Department.
Para presentar quejas o reclamaciones dirjase al Departamento de Atencin al
cliente.
Telefonica and Tele 2 provide toll-free telephone lines for customer complaints.
Telfonica y Tele2 tienen telfonos gratuitos para atender reclamaciones de sus
clientes.
We offer the sectors best after-sales service.
Ofrecemos un servicio postventa lder en el sector.

e) Stock and distribution

Logistics - Logstica
Inventory - Inventario
stock Inventario /productos
Stock management Gestin de inventario
Delivery Lorry/Van Camin/furgoneta de reparto
Fleet Flota
Warehouse Almacn
Distribution Centre Centro de distribucin
Storage Almacenaje
To store - Almacenar
To distribute - Distribuir
Good Inventory management by the company has helped to reduce losses.
El buen manejo del inventario por parte de la empresa ha ayudado a reducir
perdidas.
The firm has its own fleet of 15 delivery lorries.
La firma cuenta con una flota propia de 15 camiones de reparto.
From the central warehouse in Madrid we distribute to the whole of Spain.
Desde el depsito central en Madrid distribuimos a toda Espaa.

f) Getting Clients
Quote Presupuesto
Proposal Propuesta
Pitch Concurso
Tender Concurso
To
To
To
To
To

pitch - Lanzar
win (business) - Ganar
gain (clients) - Adelantar
tender - Ofrecerse
put out to tender Salir a la oferta

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We gave the client a detailed proposal last week but we still havent received a
response.
Dimos al cliente una oferta detallada la semana pasada pero nosotros todava
no hemos recibido una respuesta.
Medi Telecom, a subsidiary of Telefonica in Marroco has won a licence for fixed-line
telephony
Medi Telecom, filial de Telefnica en Marruecos, se ha adjudicado una licencia de
telefona fija.
The proposals which were received were not considered acceptable.
Las propuestas recibidas no se consideran aceptables.
Brown Kitchens asked various agencies to pitch before giving their advertising
account to BBH.
Brown Kitchens convoc a concurso a varias agencias para finalmente adjudicar la
creacin de campaas de publicidad a BBH.
Focsa won the first competitive tender for cleaning services in the city of Barcelona.
Focsa gan el primer concurso que se convoca para la limpieza de la ciudad de
Barcelona.

The flexible, and constantly changing, language of business

Trying to learn business English can be complicated at the best of times and this
task is made more difficult by the fact that different sectors use different
vocabulary for essentially identical concepts; and even within the same sector,
individual corporations will adopt certain words and phrases which are not used by
their competitors. In an effort to help their employees some companies even go so
far as to issue staff with reference books on the language used in the company and
how to employ it.
A further complication is that business experts and analysts, particularly in the
USA, are continually creating new words to describe business concepts and
processes.
Our advice is to continually immerse yourself in business English and not wait until
that vital meeting or presentation. Try to read the financial press and websites in
English, review trade magazines in your sector and watch business-related
television programmes in English as frequently as possible.

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1.2.2.3 Relationships with third-parties

a) Agreements with third parties
Agreement Acuerdo
Contract - Contrato
Customer - Cliente
Client - Cliente
Aliance - Alianza
Consortium Consortia
Cartel Cartel
Sub contractor - Subcontratista
Licencee - Licenciado / matriculado
To
To
To
To
To
To

Sign Firmar
Agree Acordar
Outsource Externalizar (tarea)
Sub contract - Subcontratar
licence Licenciar / matricular
reach (an agreement) Llegar a un acuerdo

The video Games company Electronic Arts signed a contract to produce a video
game of The Simpsons
La empresa de videojuegos Electronic Arts firm un contrato para hacer un
videojuego de "Los Simpsons"
FCC has won a contract worth 75 million for the management of waste/sewage.
FCC se adjudica un contrato de gestin de aguas residuales por 75 millones de
euros.
The customer is always right!
El cliente siempre tiene la razon!
To reduce costs, the airline has decided to outsource its IT services.
Para reducir gastos, la lnea area ha decidido subcontratar sus servicios de
informacin y tecnologa.

b) Disputes
Arbitration - Arbitraje
Legal proceedings Procedimientos legales
Breach of contract Incumplimiento de contrato
Damages - Daos
Injunction - Prescripcin
Dispute - Discusin
To sue Demandar
Audiovisual Sport is suing Mediapro for breach of contract.
Audiovisual Sport demanda a Mediapro por incumplimiento del contrato.

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The singer has been granted an injunction to stop his former manager publishing
private photos.
Han concedido al cantante una prescripcin para parar a su antiguo representante a
que publique fotos privadas.
After the failure to reach an agreement in arbitration, BP has initiated legal
proceedings against its largest supplier.
Despus del fracaso para alcanzar un acuerdo en el arbitraje, BP ha iniciado la
causa contra su proveedor ms grande.

Clients and Customers

The terms clients and customers both mean clientes in Spanish. In English,
there is very little difference in meaning, however it is more common to use
clients when we refer to the provision of services, whereas we use customers
when referring to the selling of products.
-

We provide advertising services to our clients.

We sell electronic components to our customers.

Claire and Simon discuss

manufacturing firm.

the

problems

in

their

own

company,

large

Claire: Another year of losses! I really think they need to change the way this
company is run.
Simon: I agree. The management doesnt seem to know what to do. Personally, I
think the main problem is with custiomer service. They have the worst record in
the sector, did you know?
Claire: Yes, I read that too. The call centre came bottom for efficiency. The report
said they dont even respond to 50% of complaints!
Simon: They dont have enough customer service agents I suppose. Typical!
Claire: Mind you, you have to ask yourself why the call centre receives so many
complains. Why are we producing so many defective products?
Simon: There is definitely a problem with quality control here. May be they dont
do enough testing? Or perhaps its related to our delivery fleet, and products are
getting damaged during transport.
Claire: Its probably a combination of all those factors. I think we should outsource
Quality Control, and Logitics.
Simon: And Customer Service! Shall we propose it to the board?

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Vocabulary
Marketing department - Marketing
Accounting department Contabilidad
Accounts Contabilidad (less formal)
Human Resources / Personnel Recursos Humanos
Public Relations Relaciones Pblicas
Purchasing Compras
Sales Ventas (check)
Market Research Investigacin de mercados
Product Development Desarrollo del producto
Sales Promotion Promocion de ventas
Logistics Logstica
Training Formacin
Stock - Reserva
Warehouse Almacn
Defects - Defectos
Product recall Pedido de devolucin del producto
Testing Pruebas
Quote Presupuesto
Proposal Propuesta
Pitch Concurso
Tender Concurso
Supplier Proveedor
Order Pedido
Purchase Compra

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1.3 BANK SERVICES

Introduction
In this unit we will examine vocabulary related to banking and financial
transactions. In the first section we describe the different types of banks, from
Central Banks to Retail Banks, and their main functions. We look at the basic terms
related to money and then go on to talk about the different types of services which
banks offer, particularly accounts and loans.
In the second section we look at banking from a companies point-of view and we
examine in detail how to describe the everyday financial transactions which take
place within a company.

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1.3.1 The bank

1.3.1.1 Types of bank

a) The Central Bank Banco Central
This is the Government bank whose responsibilities include issuing money (notes
and coins), controlling the national banking system and setting interest rates. In
the UK the central bank is the Bank of England while in the USA it is the Federal
Reserve, often known simply as The Fed.
The Federal Reserve has raised interest rates by one point.
La Reserva Federal ha levantado tasas de intereses de un punto.

The Bank of England has been criticised for failing to intervene in the current
banking crisis.
El Banco de Inglaterra ha sido criticado por no lograr intervenir en la actual crisis
bancaria.

b) Retail Banks or High Street Banks

These are banks which offer services principally to the general public. In the United
Kingdom, some of the largest retail banks are Barclays, RBS (Royal Bank of
Scotland) and HSBC.
The retail banks are closing down unprofitable branches and concentrating on
providing more banking services on the internet.
Los bancos de venta al pblico cierran acuerdos no rentables y se concentran en el
suministro de servicios bancarios e Internet.
The retail banking sector is dominated by a small number of very large banking
groups.
Un pequeo nmero de grandes grupos bancarios domina la adquisicin bancaria
en el sector.

c) Investment Banks or Merchant Banks

Investment banks are those institutions which deal with operations in the financial
markets, advise organisations on investment issues and organise share matters and
other forms of funding for major companies. In the United Kingdom, these were
formally known as Merchant Banks but this term has now been replaced by the
American term Investment Bank. Well known banks in this category include
Goldman Sachs and JP Morgan.
The acquisition was backed by a consortium of investment banks, headed by Merrill
Lynch.
La adquisicin fue desestimada por un consorcio de bancos de inversin, dirigido
por Merrill Lynch.

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In the 1980s many investment banks made huge amounts of money advising
governments on the privatisation of state industries.
En los aos 80 muchos bancos de inversin hicieron enormes cantidades de dinero,
que aconsejaban gobiernos en la privatizacin de las industrias del estado.

Front Office and Back Office

The world of investment banking has developed a special vocabulary all of its own.
To describe the two major areas of responsibility in a bank, the terms front office
and back office are used. Front office refers to all the work which is carried out
either directly on the financial markets or directly with clients: buying shares,
arranging finance and debt issues etc. Back Office refers to all the administrative
work which is needed to ensure that the work of the front office is completed
satisfactorily. Back office work is predominantly, but not exclusively, related to
accounting.

1.3.1.2 Banking Services

a) Money basic concepts
Cash Dinero efectivo
Bank Notes Billetes (dinero)
Bills Billetes (dinero)
Coins Moneda
Credit card Tarjeta de crdito
Debit card - Tarjeta de dbito
Currency Divisa
Loan Prstamo, crdito
Debt Deuda
Id like to pay in cash please.
Quisiera pagar en efectivo.
The pound sterling remained strong against other major currencies today.
La libra esterlina hoy se ha mantenido fuerte con respecto a otras divisas
importantes.
The bank agreed to give the company a loan of $50,000.
El banco ha aprobado un crdito para la compaa de 50.000 libras esterlinas.

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b) Basic Bank Services
Current Account (UK) Cuenta corriente
Checking Account (USA) Cuenta corriente
Loans Prstamos
Mortgages - Hipotecas
Deposit Account Cuenta de ahorro
Could you let me know the balance of my current account please?
Me podra dar el saldo de mi cuenta corriente, por favor?
Joses dilemma is whether to use the 30,000 from the sale of the land to pay his
mortgage off early.
La duda de Jos ahora es si amortizar anticipadamente parte de la hipoteca con los
30.000 de la venta de los terrenos.

c) Bank Accounts
Cheque (UK) Cheque
Check (USA) - Cheque
Cheque book (UK) Talonario
Check book (USA) Talonario
Withdrawal - Reintegros
Deposit Depsito
Interest - Inters
Rate of interest / Interest rate Tipo de inters
Statement - Declaracin
Transfer -Transferencia
Overdraft - Crdito
Overdraft limit Lmite de crdito
Overdrawn Girar en descubierto
To
To
To
To

Deposit Depositar
Transfer - Transferir
withdraw Retirar / sacar
take out - Retirar / sacar

Caja Madrids current account for businesses gives you the best rate of interest with
immediate access to funds via a cheque book.
La cuenta corriente de empresas de Caja Madrid le da el mejor tipo de inters con
liquidez inmediata a travs de un talonario.
We were unable to make the transfer as we had already reached our overdraft
limit.
Nosotros ramos incapaces de hacer la transferencia ya que habamos alcanzado
nuestro lmite de descubierto.
I was surprise when I looked at the statement as Id withdrawn more money than I
thought.
Me sorprendi cuando vi el extracto que yo haba retirado ms dinero que
deba.

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d) Loans
Lender Prestamista
Borrower - Prestatario
Debtor Deudor
Security Aval
Capital - Capital
Collateral Aval
Guarantee Aval
Guarantor - Avalador
Installments Cuotas
Schedule of Repayments- Plazo de devolucin
Administration costs Gastos de tramitacin
Administration Fee - Gastos de tramitacin
Maturity - Vencimiento
To
To
To
To
To
To
To

loan Prestar
borrow Tomar prestado
owe Deber
secure - Asegurar
pay back Pagar (una deuda)
repay a debt Liquidar una deuda
take out (a loan) Sacar un prstamo

The bank offers a loan for the financing of long term business investments, with
competitive rates of interest.
La banca ofrece un prstamo para la financiacin de inversiones empresariales a
largo plazo con tipos de inters competitivos.
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or
property) as collateral for the loan.
Un prstamo asegurado es un prstamo en el que el prestatario promete algn
activo (por ejemplo un coche o (propiedad)) como la fianza para el prstamo.

The company promises to return the stated amount and to pay the interest set,
according to the agreed schedule.
La empresa se compromete a la devolucin de la mencionada cantidad as como al
abono de los intereses pactados, en los plazos acordados.
The Finance Director thinks that we need to take out a loan to cover the costs of
restructuring.
El Director de Finanzas piensa que tenemos que sacar un prstamo para cubrir
los gastos de reestructuracin.

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To Borrow and to lend

The verbs borrow and lend are used to describe the same action, but from
different points of view. Lend translates as prestar in Spanish. If I give money
to my friend John with the condition that he returns it to me at a later date, we say
I lend John the money or I lend the money to John. Notice the different word
order in the two sentences.
To describe the action from Johns perspective we say: John borrows money from
me. Remember that the correct preposition is from not to. In this example
John is the borrower and I am the lender.

The finance director and managing director of a small company discuss their credit
arrangements.
Alex Lampard, managing director: Hows the financial situation Phillip?
Phillip Wright, finance director: Well Alex, Im currently looking into our credit
arrangements to see what options are available.
Alex Lampard, md: What are the issues?
Phillip Wright, fd: Up till now weve been using our overdraft facility on the bank
account as our main source of credit, but because of the cash flow problems weve
been having weve been going over the limit.
Alex Lampard, md: And then they charge us a big rate of interest?
Phillip Wright, fd:
taking out a loan.

Exactly.

So Im looking at extending our overdraft limit or

Alex Lampard, md: Is it a good idea to be borrowing money?

Phillip Wright, fd: Looking at what is on offer, I think it will save us money. The
interest rates are lower than what we have been paying on the overdraft, and
theres a lot of flexibility on paying back the loan.
Alex Lampard, md: So we can vary instalment payments?
Phillip Wright, fd: Certainly. And as we dont need a huge amount we should be
able to get a loan without having to put up any collateral.
Alex Lampard, md: Sounds promising. Let me know when youve got something
specific in mind.
Phillip Wright, fd: No worries Alex. Ill let you know as soon as I make a decision.

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1.3.2 The capital

1.3.2.1 Finance and Investment

a) Basic Concepts
Investor - Inversor
Investment Inversin
Funding Financiamiento
Finance - Finanzas
Return on Investment Retorno de inversin
To
To
To
To
To

invest - Invertir
finance - Financiar
fund Patrocinar / financiar
receive Recibir
make an investment Hacer una inversin

Our company has just received an investment of 5 million from an American

company.
Nuestra empresa acaba de recibir 5 millones de euros de inversin por parte de una
compaa estadounidense.
Yesterday the board of directors of the German car consortium, Volkswagen
approved an investment of 4,000 million euros in its subsidiary SEAT.
El consejo de supervisin del consorcio automovilstico alemn Volkswagen aprob
ayer una inversin de 4.000 millones de euros para su filial SEAT.

b) Types of investment and Investors

Long-term Largo plazo
Short-term Corto plazo
Venture capital Capital Riesgo
Bond/debt issues Emision de bonos
Subsidies - Ayudas
Government Subsidies - Ayudas estatales
Grants - Subvenciones
State Aid - Ayuda estatal
For the company to remain competitive its essential to make long-term
investments.
Para que la empresa siga siendo competitiva es imprescindible Invertir a largo
plazo.
The European Commission has proposed new laws to make it easier for companies
involved in R&D to apply for Government subsidies.
La Comisin Europea ha propuesto nuevas reglas para que las empresas que
realizan I+D puedan recibir ms facilidades para solicitar ayudas estatales.

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Both Spanish and Latin American companies have chosen to issue bonds instead of
shares.
Tanto las empresas espaolas como las latinoamericanas han optado en emitir
bonos en vez de acciones.
RBS will issue bonds to fund the takeover of Natwest.
RBS emitir bonos para financiar la compra de Natwest.

Start ups The special case

The noun Start-up describes a new or recently formed company with certain
characteristics. It is used to refer to companies in the sector of new technologies,
and the internet in particular, which have a very high potential for growth. Startups often receive money from Angel Investors and Incubator Funds, specialists in
helping new high-tech businesses. As you might expect, the word originated in the
USA during the internet boom of the 1990s, although it is derived from the phrasal
verb to start up (arrancar).

1.3.2.2 Financial Transactions in the Company

a) The movement of money in a company
Liquidity - Liquidez
Expenditure Gastos
Expenses Gastos
Costs - Gastos
Income Ingresos
Outgoings Gastos
Cash flow Flujo de caja, flujo de fondos
To charge - Cobrar
To invoice Emitir una factura / cobrar
The company has decided to modernise and reduce costs by outsourcing.
La empresa ha decidido modernizarse y reducir gastos mediante el externalizacion
de servicios.
The Banking sector is suffering a lack of liquidity due to the mortgage crisis in the
USA.
Existe una falta de liquidez en las entidades bancarias por la crisis hipotecaria en
EEUU.
In finance, cash flow refers to the expenditure and the income of a company in a
given period.
En finanzas se entiende por flujo de caja los flujos de entradas y salidas de caja o
efectivo, en un perodo dado.

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b) Payment
Invoice Factura
Pro-bono invoice Factura pro-bono
Credit note Factura de abono
Receipt - Recibo
Bill of Exchange - Letra de cambio
Trade Bill Letra de cambio
VAT (Value Added Tax) (UK) IVA
Sales Tax (USA) IVA
To
To
To
To

pay Pagar
overcharge - Aumentar
undercharge Reducir
issue - Emitir

Electronic invoices now have the same validity as paper invoices.

Las facturas electrnicas ya tienen la misma validez que las facturas emitidos en
papel.
The policy of the company is to send all invoices with the goods.
La poltica de la empresa es enviar todas las facturas con las mercancas.
In our original invoice we overcharged the client so we have had to issue a credit
note.
En nuestra factura original sobrecargamos al cliente con lo que hemos tenido
que emitir una nota de abono.

c) Problems with payments & debtors

Late Payment Pago retrasado
Non-payment Impago
Non-payments Impagos
Legal Advice - Asesora Jurdica
Legal Action Proceso
Credit Agency Institucin de crdito
Debt Collection Cobro de impagos
Debt Collection Agency - Empresa para el cobro de impagos
Write off / Write down Amortizar
The majority of companies offer discounts for prompt payment.
La mayora de los negocios ofrecen descuentos por pronto pago.
The film star must pay $2.5 million for non-payment of taxes.
La estrella de cine deber pagar 2,5 millones de dlares por impago de impuestos.
Due to the continual non-payment by the client, the company decided to put the
matter in the hands of a debt collection agency.
Debido a los impagos reiterados del cliente la compaa decidi poner el asunto en
manos de una empresa para el cobro de impagos.

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The International Monetary Fund agrees to write off $3.3bn owed to it by 19 of the
world's poorest nations
El Fondo Monetario Internacional acuerda en amortizar $3.3bn debido por 19 de
las naciones ms pobres del mundo.

To pay: with preposition or without?

It often happens that non-native speakers make mistakes when using the verb to
pay, even though it is one of the most common actions when referring to
commercial transactions.
There are basically three different situations which
students need to be aware of:
We use pay for when we refer to the product or thing which we are buying.
- We have paid for the new computers
When we refer to the person with whom we are transacting, we use no preposition.
- I paid James.
- I paid the manager.
Combining the two types of sentence, we use the order: person then object.
- I paid James for the new computers.
As you might expect from English, there is a further complication. With certain
kinds of documents mainly those which solicit payment for one reason or another
we use no prepositions:
- I paid the invoice
- I paid the fine.

The finance director of a medium-sized company and one of his staff discuss
problems with clients payments.
Sam Cole, Finance Director: Hi Claire, How are we doing with payments this
month?
Claire Terry: Well, as usual, the majority of clients have paid us on time, but we
have serious non-payment issues with a few of our biggest clients, particularly with
Frys & Co.
Sam Cole, Finance Director: Whats the problem with Frys?
Claire Terry: Well, we have five invoices which are currently unpaid, of which two
are more than five months overdue. So they now owe us a total of $123, 200.
Sam Cole, Finance Director: That doesnt sound very good. These problems with
late payment dont help our cash flow at all.
Claire Terry: Do you think we should call in our debt collection agency?

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Sam Cole, Finance Director: Im not sure thats a good idea. Frys are our most
important client, and we need to maintain a good relationship with them. But we
definitely cant afford to write off these debts.
Claire Terry: What else can we do?
Sam Cole, Finance Director: Ill send a polite, but firm, letter to their finance
director asking for payment. Hopefully that will do the trick. Can you let me have
copies of the invoices which are pending?
Claire Terry: Certainly, give me 5 minutes and Ill get them for you.
Sam Cole, Finance Director: Thanks Claire.

Vocabulary
Central Bank
Retail Bank
Investment Bank
Cash Dinero efectivo
Bank Notes Billetes (dinero)
Bills Billetes (dinero)
Coins Moneda
Credit card Tarjeta de crdito
Debit card - Tarjeta de dbito
Currency Divisa
Loan Prstamo, crdito
Debt Deuda

Cheque (UK) Cheque

Check (USA) - Cheque
Withdrawal - Reintegros
Deposit Depsito
Interest - Inters

Lender Prestamista
Borrower - Prestatario
Debtor Deudor
Security Aval
Capital - Capital
Collateral Aval
Guarantee Aval
Guarantor Avalador

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1.4 STOCK EXCHANGE

Introduction
Even in our own language, it can sometimes be difficult to understand the language
of the financial markets and how to describe different concepts and activities. In a
second language, those difficulties are magnified and the likelihood of
misunderstanding is high.
In this unit we attempt to highlight the most important terms used to describe the
institutions and activities related to the financial markets, with particular reference
to the stock markets.
We also explain how to talk about the financial performance of a company from a
market viewpoint. What are the key indicators of success and failure and how can
we describe activities which affect corporate structure, such as mergers and
privatisations.

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1.4.1 Financial environment of the company

1.4.1.1 The financial health of a company

a) The Parameters
Forecast - previsin
Liquidity liquidez
Margins - margen
Sales - Ventas
Overheads gastos generales / gastos fijos
Repayments - pagos
Productivity - productividad
Value-added valor aadido
Turnover facturacin / volumen de ventas
Debt - endeudamiento
Profits ganancias / Beneficios
To balance accounts - mantener sus cuentas en equilibrio
To forecast pronosticar
This financial year will be one of record profits for the large companies.
Este ejercicio ser uno de ganancias rcord para las grandes empresas
At the end of the financial year 2006 the company had debts of 60 million.
La empresa tuvo un nivel de endeudamiento financiero al finalizar el ejercicio 2006
de 60 millones de euros.
In 2006 the company achieved a turnover of 12,158 million, making it the largest
supermarket chain in Spain.
Durante el 2006, alcanz una facturacin de 12.158 millones de euros, cifra que la
convierte en la primera cadena espaola de supermercados.

One of the best ways to improve productivity is to set objectives and achieve them.
Una de las mejores maneras de incentivar la productividad es trazando objetivos y
cumplirlos.

Forecast and prediction

The nouns forecast and prediction both refer to events which we believe will
happen in the future. In truth there is not too much difference between the two
words; however, forecast generally suggests that our idea of the future is the
result of a scientific process whereas Prediction is not so specific.

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This difference can be categorised as how we come to form our opinion. The
second main difference concerns the subject matter: We use forecast when we
refer to financial figures or complicated scientific processes, and our forecast
usually includes a detailed analysis of future trends.
The verbs to predict and to forecast follow the same rules as the nouns.

1.4.1.2 Shares and Ownership

a) Basic Concepts
Annual General Meeting AGM - Junta General de Accionistas
Extraordinary General Meeting - Juntas Extraordinarias de Accionistas
Annual report Cuentas anuales
Shareholding participacin de accionistas
Share (UK) Accin
Stock (USA) Accin
Share Capital Capital social
Shareholder - Accionista
Dividend - Dividendo
Share option (UK) / Stock option (USA) Opcin sobre acciones

The solar panel company had its worst week in the stock market with the sale of
10% of its share capital by its biggest shareholder
La empresa de paneles solares vivi su peor semana en bolsa con la venta de un
10% por parte de su mayor accionista.
The businessman has acquired 295,000 shares, representing 8% of the companys
capital.
El empresario ha adquirido 295.000 acciones representativas de un 8% del capital
de la compaa.
On the 22nd of July, the Shareholders AGM approved an expansion of the share
capital.
El 22 de julio, qued aprobada en Junta General de Accionistas, una ampliacin de
capital en la compaa.
For the first time in 21 years Commerzbank did not pay a dividend.
Commerzbank dej de pagar dividendos por primera vez en 21 aos.
b) Mergers and Acquisitions (M&A)
Merger Fusin
Acquisition - Adquisicin
Takeover bid - OPA
Monopoly - monopolio
Approval Aprobacin
Management Buyout - Adquisicin de una empresa por sus propios
directivos/ejecutivos

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A consortium lead by the Spanish venture capitalist Gala Capital has joined the
fight to control Iberia.
Un consorcio liderado por la sociedad de capital riesgo espaola Gala Capital se
suma a la puja por Iberia.
Gas Natural has launched a takeover bid, for the electricity generator Endesa,
valuing the company at 22,549 million.
Gas Natural ha lanzado una Oferta Pblica de Acciones (OPA) sobre la compaa
elctrica Endesa por valor de 22.549 millones de euros.
The CNMV has authorised Imperial Tobaccos takeover bid for Altadis.
La Comisin Nacional del Mercado de Valores (CNMV) ha autorizado la Oferta
Pblica de Adquisicin de acciones (OPA) de Imperial Tobacco sobre Altadis
The merger created the worlds largest aerospace company.
La fusin supuso la creacin de la compaa aerospacial ms grande del mundo.
The European Commission has declared its opposition to the merger.
La comisin europea ha declarado su oposicin frente a esta fusin.
The bank Morgan Stanley has financed a management buyout of the car maker
Aston Martin.
El banco Morgan Stanley ha respaldado la compra del fabricante de automviles,
Aston Martin, por parte de sus directivos.
Banco Santander was a member of the consortium which recently acquired ABN
Amro.
Banco Santander form parte de un consorcio que hace poco adquiri ABN Amro.

c) Going Public Salir a bolsa

IPO (Inicial Public Offering) oferta inicial de acciones
Privatisation Privatizacin
Prospectus prospecto/folleto
Flotation Salida a bolsa
To underwrite - suscribir
To place in the market colocar en el mercado
To flota Salir a bolsa
Criteria will float 20% of its capital on October 10th, in what will be the most
important flotation of the year.
Criteria colocar el 20% de su capital el prximo 10 de octubre en la que ser la
salida a bolsa ms importante del ao
Vocento will float on the stock market at an initial price of between 14.4 and 16.6
euros per share.
Vocento saldr a Bolsa a un precio de entre 14,4 y 16,8 euros por accin
The IPO represents 17.79% of the companys share capital, some 22.23 million
shares.
La oferta inicial de acciones representa el 17,79% del capital social de la empresa,
unas 22,23 millones de acciones.

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Going Public
Be careful when using the term to go public. In the context of the stock market,
as we have said above, it has the same meaning as to float or, for state
companies to be privatised. However, in other contexts to go public means to
make something public or to publish some type of information which was
previously private. It is often used in the context of scandals when one party
decides to reveal everything to the newspapers or television.

An analyst in an investment bank updates his boss on the main financial news of
the day.
Jane Johns, Manager: Hi Jose. Any important news I should be aware of?
Jose Benitez, Analyst: Hi Jane. Yes, there is one important piece of news. In the
manufacturing sector, Lloyds Brakes have announced a takeover bid for the tyre
producer Miretti.
Jane Johns, Manager: Really? I wonder how Lloyds are going to fund that.
Jose Benitez, Analyst: Well, the article says that Lloyds have big cash reserves
Jane Johns, Manager: Thats logical I suppose. Theyve been paying a good
dividend ever since they floated. What does it say about approval?
Jose Benitez, Analyst : Approval is expected from the board of Miretti, but the
journalist thinks that Lloyds may have problems getting the deal approved by their
own shareholders.
Jane Johns, Manager: Anything else on the takeover deal?
Jose Benitez, Analyst: Only that they arent expecting any problems with the
regulatory authorities, but thats logical I suppose as they are not in exactly the
same sector.
Jane Johns, Manager: I agree. Well, thanks for the information Jose. Keep me
updated on developments.

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1.4.2 FINANCIAL MOVEMENTS

1.4.2.1 The markets

a) Key Vocabulary
Securities ttulos, valores
Equities - ttulos, valores
Bonds Bonos
Treasury Bonds (UK) Bonos de estado
Fixed Income - Renta fija
The Equity markets mercado de valores
The Debt markets - mercado de la deuda
Foreign Exchange Divisas
Currency - Divisas
Derivatives Derivados
Commodities Materia primas
Market Capitalisation - capitalizacin burstil
Index ndice
Shares in the Kibazo Group fell back 95p to 667p.
Las acciones del grupo Kibazo retrocedieron 95 peniques, ubicndose en 667.
Wall Street manages to close up on the week.
Wall Street consigue terminar la semana en positivo
The FTSE Eurotop 100 index is made up of the main European companies, by
market capitalisation, in all sectors.
El ndice FTSE Eurotop 100 recoge a las principales compaas de Europa por
capitalizacin burstil de todos los sectores.
This year the Dollar is losing the battle against the other major currencies.
El dlar pierde la batalla contra todas las grandes divisas del mundo este ao.

b) Investment Terms
Investment Portfolios - carteras de inversiones
High risk - Alto riesgo
Low risk- Bajo riesgo
Long term Largo plazo
Short term Corto plazo
Blue chip (company/stock) (empresa/accin) de primera categora
Over-valued sobre-valorado
Under-valued infra-valorado
Speculation - especulacin

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Gain - ganancia
Loss perdida
Growth crecimiento
Returns - ganancias
To invest invertir
To speculate especular
The IMF has said that the dollar is over-valued and warns that it could fall in value
this year.
El FMI dice que el dlar est sobrevalorado y advierte de que podra caer este ao
It can be be very profitable to invest in shares in the long-term.
La inversin en acciones puede resultar muy rentable si se la plantea a largo plazo

c) Economic Indicators
Interest Rates tipo de inters
Gross Domestic Production Product(GDP): Producto Interior Bruto (PIB)
Manufacturing Output Fabricacin de salida
Balance of payments balanza de pagos
Balance of trade balanza comercial
The GDP of the eurozone grew by 0.7% in the third quarter.
El Producto Interior Bruto preliminar de la zona euro ha aumentado un 0,7% en el
tercer trimestre.

d) The players in the markets

Shareholders (UK) accionistas
Stockholders (USA) accionistas
Stockbroker Agente de bolsa, corredor de valores
Market maker Operador de mercados activos / Creador de Mercado.
Regulators - Regulador
Regulatory Body/Authority - Ente Regulador
Investment Funds - Fondos de inversin
Hedge Fund Hedge Fund
Financial Analysts Analista financiera
Institutional Investors Empresas inversoras.

e) Activity in the markets

Trade in negociar (comprar y vender)
Quoted (UK) que cotiza en bolsa
Listed (USA) que cotiza en bolsa
Opening price Precio de apertura
Closing price Cotizacion al cierre

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Blue Chip
We use the term blue chip to refer to large, stable companies which represent a
reliable investment opportunity. The Origin is said to be the Poker rooms of the
United States, where the most valuable chips (fichas) were coloured blue.

1.4.2.2 Newsapers: The share page

a) The share prices in the newspapers
Below is an excerpt from the financial pages of a newspaper with the market prices
of two companies (NB Airlines and Lawson Group) from the Transport sector:

Transport
Stock

Price

Chg

52-week
high
low

Mkt Cap ($M)

Yld

P/E

NB Airlines

222

+3

248

183

49.4

2.0

17.4

Lawson Grp

994

-1.0

1,010

453

76.7

1.8

27.5

Stock : The name of the company.

Price: The closing price of the shares (the price when the markets officially closed
for the day)
Chg (Change): The difference in price compared with the day before.
example the shares of NB Airlines have risen by 3 cents)

(In our

52-week high/low: The highest/lowest price reached by a share in the preceding

52 weeks
Mkt Cap (Market Capitalisation): The total value of all of companies shares
together, based on individual share price.
Yld (Yield): The dividend paid expressed as a percentage of share price.
P/E Ration (Price / Earnings ratio): The share price divided by the profits per
share over the last 12 months.

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b) Financial writing
In this section weve tried to cover the most important language related to the
financial markets. However, we can only really touch the top of the iceberg as there
is a huge amount of vocabulary used in this area and new words are being added
on a seemingly daily basis. At the same time, existing words can suddenly be used
with a different meaning.
One of the key motivation behind the coining (making) of new expressions is the
desire of certain individuals to hide or manipulate the truth. Key examples of this
trend are sub-prime and correction
Sub prime
In 2007 the sub-prime mortgage crisis hit the USA and its consequences were felt
around the world.
In English, the adjective Prime means the best or optimum therefore the
expression sub-prime seems to refer to everything except the best, a description
which includes anything which is good or average as well as anything which is
just bad. In reality, the sub-prime mortgages were the very worst type of
mortgages (from a banks point of view) and represented the very bottom of the
market.

Correction
The financial community make a big effort to avoid referring directly to downward
movements in the stock market. The noun correction, from the verb to correct
(corregir), gives the image of an alteration which has fixed some kind of anomaly.
In reality of course it is simply a euphemism for a drop in the value of the stock
markets.

Unofficial terms and slang

When learning English there is often a big difference between the vocabulary which
you need to know in order to understand texts, TV programmes, newspapers etc,
and the language which you yourself should use in everyday conversation and
written communications.
This is particularly the case with the vocabulary related to the financial markets. As
we saw above, financial journalists, and others, have developed a complex
vocabulary basically in order to avoid repeating the same terms over and over
again.
Our advice to students is not to try to replicate the language they see in financial
publications. Clarity should always be the main objective. Choose the simplest,
most obvious terms to use when you speak or write and dont be afraid to repeat
words.

An analyst in an investment bank and his boss discuss investment opportunities.

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Jane Johns, Manager: Hi Jose. We need to send our private clients a review on
investment opportunities. Whats our position on Lloyds Brakes?
Jose Benitez, Analyst : Well, our previous view was that the stock looked overvalued. They are profitable and always pay a dividend but their share price looked
high compared with similar companies in the sector.
Jane Johns, Manager: And now that theyve announced the takeover bid for
Miretti?
Jose Benitez, Analyst : Well, the market isnt impressed and the shares have
fallen since the bid was announced this morning. Theyre now 5% lower than the
opening price.
Jane Johns, Manager: And do you see any reason to change our evaluation?
Jose Benitez, Analyst : If the price remains low I think investing now for the
longer-term is definitely worth considering. If looked at Miretti in detail and I think
they are in better shape than the market believes.
Jane Johns, Manager: So you think Lloyds bid under-values them?
Jose Benitez, Analyst : Exactly, I think theyll be getting a bargain.
Jane Johns, Manager: Right, well lets recommend a buy.
Jose Benitez, Analyst : Fine Jane, Ill get that into the report.

Vocabulary
Forecast - previsin
Liquidity - Liquidez
Margin - margen
Sales - Ventas
Overheads gastos generales / gastos fijos
Profits - Beneficios
Debt - endeudamiento
Merger Fusin
Acquisition - Adquisicin
Takeover bid OPA
Stockbroker Agente de bolsa, corredor de valores
Market maker Operador de mercados activos / Creador de Mercado.
Regulators - Regulador
Securities ttulos, valores
Equities - ttulos, valores
Bonds Bonos
Foreign Exchange Divisas
Currency - Divisas

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