SKILL UP! 9IN CONTEXTPhrase Bank
For a list of all the key phrases used in
the dialogues, see pages 12–13ASSETS AND LIABILITIES
Balance sheets show two
halves of a company: assets
and liabilities. The assets are
owned by the company and
contribute to creating revenue.
The liabilities are obligations
owed by the company, as well
as its capital or shareholders’
equity. Most firms have their
own categories for their assets
and liabilities. What categories
does your company use?The SiTuaTion:
Sue and Ron discuss the finan-
cial health of Craig’s company.- A good investment?
Sue: I’ve been through the ac-
counts with a fine-tooth comb.
Overall, I like what I’ve seen. There
are a few minor issues with their
reporting, but nothing serious.
They’re not a publicly traded or-
ganization, after all.
Ron: OK, talk me through it.
What is their annual turnover?
Sue: Just over €900,000.
Ron: What are their main finan-
cial liabilities?
Sue: They have a loan from their
bank and they can service the
debt easily. Unlike most start-ups,
the company is in good financial
health. It doesn’t have a problem
with inadequate cash reserves.
They won’t become insolvent any
time soon. But they don’t have the
resources to expand.
fine-tooth comb: go through sth. with a ~
, sich etw. genauestens ansehen
issue , Problem
overall , insgesamt, allgemein
publicly traded: be ~ , an der Börse notiert sein
- It’s working
Sue: If you subtract their current
liabilities from current assets, you
get the company’s net working
capital. A quick calculation shows
that Afoodable has enough net
working capital to tide it over for
the year. It’s a promising start-up.
Ron: What are the days sales out-
standing?
Sue: On average, they collect on
accounts receivable within 5 days.
But they have an agreement with
their suppliers to pay in 60 days.
Ron: So, they have a strong cash
flow from operations.
collect on sth. , etw. einziehen
days sales outstanding , Forderungslaufzeit
tide sth. over , etw. überbrücken