Note- English for accounting & financial- Created by Triu Vn Vit

FINANCIAL RATIO 1

Liquidity: the ability to sell an asset for cash Efficiency: How well the business uses its assets Ratios: the relationship between two figures Solvency (kh nng thanh ton): How easily a business can play bills or debts when they are due. - Current ratio: it measures liquility and show how much of a companys assets will have to be converted into cash in the next year to pay debts. - Quick ratio or acid test (t s thanh ton nhanh): It measures short-term solvency. Quick ratio=
current assets inventory current liabilitie s

- Liquid assets (ti sn thanh khon): are current assets minus stocks or inventory
because this might be difficult or impossible to turn into cash. - EPS (earning per share: thu nhp mi c phn): It tells investors how much of a companys profit belong to each share EPS=
total earnings for the year the num ber of ordinary shares

- the dividend cover or times dividend covered: which show how many times the
companys total annual dividends could have been paid out of its avaliable annual earnings. the dividend cover =
O rdinary share dividend net profit

FINANCIAL RATIO 2 - Gross profit margin: It tells you the percentage of a company's sales that are left after cost of goods sold to cover payroll, rent, taxes, advertising, and other expenses. Gross profit margin =
S ales cost of good sold Sales (total revenue)
EBIT interest charges

- Interst cover: how easily the company can pay long-term debt costs.
Interst cover =

- Across borders: is a transaction of one country to another country - Conglomerate: a group of companies, operating in different fields, that have joined
together. - Collateral: some thing that acts as a security or a guarantee for a debt. - Repossess: to take back property that has not been completely paid for.

INTEREST RATES

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Note- English for accounting & financial- Created by Triu Vn Vit

Discount rate: the rate at which central banks make secured loans to commercial bank. Base rate: Commercial bankslending rate for their most secure customers. Mortgage: a loan to buy property (a house, flat, etc.) Overdraft: Occasionally borrowing money by spending more than you have in the bank. Leasing purchase: borrowing money to buy something like a car, spreading payment over 36 months. Depreciation: Reducing the value of a fixed asset, by charging it against profits. Tax heaven: A country offering very low tax rates to foreign businesses. Consumption: spending money to buy things, rather than saving it. TAX Income tax: the tax people pay on their wages and salaries. Direct tax is a tax on wages and salaries or onn company profits. Indirect tax is a tax pay on property, sales transactions, imports, and so on. Value-added tax is a tax colleted at each stage of production, excluding the already-taxed costs from previous stages. Wealth tax is the annual tax imposed on peoples fortunes (in some countries); Gifts and inheritances over a certain value are often liable to a wealth tax. Making false declarations to the tax authorities is called Tax Evasion. Reducing the amount of tax you pay to a legal minimum is called Tax Avoidance. BANKING Overdraft: an arrangement by which a customer can withdraw more from a bank account than has been deposited in it, up to an agreed limit; interest on the debt is calculated daily. Credit card: a card which guarantees payment for goods and services purchased by the cardholder, who pays back the bank or finance company at a later date. Cash card: is a plastic card issued to bank customers for use in cash dispensers. Current account or checking account is an account which allows customers to withdraw money with no restrictions, the bank pays little or no more interest. Standing order or direct debit is an instruction to a bank to pay fixed sums of money to certain people or organizations at stated times. Automated Teller Machine (ATM) is a computerized machine that allows bank customers to withdraw money, check their balance, and so on. CENTRAL BANKING What are the main functions of central bank? Most countries have a central bank that provides financial services to the government and to the bank system. Central bank are responsible for monetary policy trying to control the rate of inflation to maintain financial stability. In many countries, the central bank supervises and regulates the banking system. The central bank prints and issues currency. ACCOUNTING AND FINANCIAL STATEMENT

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Note- English for accounting & financial- Created by Triu Vn Vit

Accounting is keeping financial records, recording income and expenditure, valuing assets and liabilities, and so on. Auditing: inspection and evaluation of accounts by a second set of accountants. Stock (GB) or inventory is the value of raw materials, work in progress, and finished products stored ready for sale. Companies record their fixed assets at historical cost because the current maket value is not important if the bussiness is a going concern. Historical cost accounting usually underestimates. Countries with a regularly hight rate of Company profit usually split to the government in taxation, to shareholders as a dividend, and to retained earning. Double-entry bookkeeping requires that . A companys fix assets consist of.. The balance sheet shows a companys financial situation on a particular date, generally the last day of the financial year. PRICING Manufacturers pricing strategies Mark up or cost-plus pricing: calculate the unit cost and add a percentage. Most companies consider other factors, like demand, competitorsprices, sales targets and profit targets. Market penetration pricing: some companies launch products at a price that only gives them a very small profit, because they want a big market share. Market skimming: we launch our products at hight prices, and then reduce them afew months later to get more customers (for a new hi-tech product). Prestige pricing or image pricing: because of famous brand name and reputation for quality, we can charge a very hight price. Going-rate pricing: demand isnt very elastic, so we charge the same price as our main competitors. Retail pricing strategies Loss- leader pricing Odd pricing or Odd even pricing ECONOMIC Fiscal policy: government or central bank measures concerning the rate of growth of the money supply (the mount of money in circulation). Monetary policy: government measures concerning taxation, public expenditure, and so on. Equilibrium: a state of balance, for example when supply meets demand.

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