1. TASK: Insert the appropriate word in the text below:
exceed - efficiency - health - pay off - owe
bankruptcy - red flag - receivables - measure
tied up - meet - comparing - underlying
A _________ of both a company's efficiency and its short-term financial _________. The working capital ratio is calculated as:
Working Capital = Current Assets - Current Liabilities
Positive working capital means that the company is able to _________its short-term liabilities. Negative working capital means that a company currently is unable to _________ its short-term liabilities with its current assets (cash, accounts receivable and inventory).
Also known as "net working capital".
If a company's current assets do not _________ its current liabilities, then it may run into trouble paying back creditors in the short term. The worst-case scenario is _________. A declining working capital ratio over a longer time period could also be a _________ that warrants further analysis. For example, it could be that the company's sales volumes are decreasing and, as a result, its accounts _________ number continues to get smaller and smaller.
Working capital also gives investors an idea of the company's underlying operational _________. Money that is _________ in inventory or money that customers still _________to the company cannot be used to pay off any of the company's obligations. So, if a company is not operating in the most efficient manner (slow collection), it will show up as an increase in the working capital. This can be seen by _________ the working capital from one period to another; slow collection may signal an _________ problem in the company's operations.
2. CHECK YOUR SPEAKING
|
bankruptcy |
ˈbæŋ.krəpt.si |
банкротство |
|
to compare |
kəmˈpeər |
сравнивать |
|
efficiency |
ɪˈfɪʃ.ən.si |
эффективность |
|
to exceed |
ɪkˈsiːd |
превышать |
|
health |
helθ |
здоровье |
|
measure |
ˈmeʒə(r) |
измерение |
|
to meet |
miːt |
выполнять |
|
owe |
əʊ |
быть должным |
|
to pay off |
peɪ ɒf |
погасить |
|
receivables |
rɪˈsiːvəblz |
дебиторская задолженность |
|
red flag |
redflæɡ |
сигнал опасности |
|
to tie up |
taɪ ʌp |
замораживать (деньги) |
|
underlying |
ˌʌn.dəˈlaɪ.ɪŋ |
базовый, лежащий в основе |
3. SEE CORRECT ANSWER
A measure of both a company's efficiency and its short-term financial health. The working capital ratio is calculated as:
Working Capital = Current Assets - Current Liabilities
Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).
Also known as "net working capital".
If a company's current assets do not exceed its current liabilities, then it may run into trouble paying back creditors in the short term. The worst-case scenario is bankruptcy. A declining working capital ratio over a longer time period could also be a red flag that warrants further analysis. For example, it could be that the company's sales volumes are decreasing and, as a result, its accounts receivables number continues to get smaller and smaller.
Working capital also gives investors an idea of the company's underlying operational efficiency. Money that is tied up in inventory or money that customers still owe to the company cannot be used to pay off any of the company's obligations. So, if a company is not operating in the most efficient manner (slow collection), it will show up as an increase in the working capital. This can be seen by comparing the working capital from one period to another; slow collection may signal an underlying problem in the company's operations.
Цей та багато інших цікавих матеріалів Ви знайдете в
підручнику “Practical Financial English”
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