INTRODUCTION 6
BASIC TERMS
Money and income 8
A Currency
B Personal finance
Business finance 10
A Capital
B Revenue
C Financial statements
ACCOUNTING
Accounting and accountancy 12
A Accounting
B Auditing
C Laws, rules and standards
Bookkeeping 14
A Double-entry bookkeeping
B Day books and ledgers
C Balancing the books
Company law 1 16
A Partnerships
B Limited liability
C Founding companies
Company law 2 18
A Private and public companies
B AGMs
Accounting policies and standards 20
A Valuation and measurement
B Historical cost and inflation accounting
Accounting assumptions and principles 22
A Assumptions
B Principles
Depreciation and amortization 24
A Fixed assets
B Valuation
C Depreciation systems
Auditing 26
A Internal auditing
B External auditing
C Irregularities
The balance sheet 1 28
A Assets, liabilities and capital
B Shareholders equity
The balance sheet 2: assets 30
A Fixed and current assets
B Valuation
C Tangible and intangible assets
The balance sheet 3: liabilities 32
A Liabilities
B Accrued expenses
C Shareholders equity on the balance sheet
The other financial statements 34
A The profit and loss account
B The cash flow statement
Financial ratios 1 36
A Types of financial ratio
B Liquidity and solvency ratios
C Earnings and dividends
Financial ratios 2 38
A Profitability
B Leverage
Cost accounting 40
A Direct and indirect costs
B Fixed and variable costs
C Breakeven analysis
Pricing 42
A Manufacturers pricing strategies
B Retail pricing strategies
18 BANKING
Personal banking 44
A Current accounts
B Banking products and services
C E-banking
Commercial and retail banking 46
A Commercial and retail banks
B Credit
C Loans and risks
Financial institutions 48
A Types of financial institution
B Deregulation
C Specialized banks
Investment banking 50
A Raising capital
B Mergers and acquisitions
C Consulting and research
Central banking 52
A The functions of central banks
B The central bank and the commercial banks
C Central banks and exchange rates
Interest rates 54
A Interest rates and monetary policy
B Different interest rates
Money markets 56
A The money markets
B Common money market instruments
C Repos
Islamic banking 58
A Interest-free banking
B Types of accounts
C Leasing and short-term loans
Money supply and control 60
A Measuring money
B Changing the money supply
C Monetarism
CORPORATE FINANCE
Venture capital 62
A Raising capital
B Return on capital
Stocks and shares 1 64
A Stocks, shares and equities
B Going public
C Ordinary and preference shares
Stocks and shares 2 66
A Buying and selling shares
B New share issues
C Categories of stocks and shares
Shareholders 68
A Investors
B Dividends and capital gains
C Speculators
Share prices 70
A Influences on share prices
B Predicting prices
C Types of risks
Bonds 72
A Government and corporate bonds
B Prices and yields
C Other types of bonds
Futures 74
A Commodity futures
B Financial futures
Derivatives 76
A Options
B In-the-money and out-of-the-money
C Warrants and swaps
Asset management 78
A Allocating and diversifying assets
B Types of investor
C Active and passive investment
Hedge funds and structured products 80
A Hedge funds
B Leverage, short-selling and arbitrage
C Structured products
Describing charts and graphs 82
A Increase and decrease
B Rate of change
C High points, low points, and staying the
same
Mergers and takeovers 84
A Mergers, takeovers and joint ventures
B Hostile or friendly?
C Integration
Leveraged buyouts 86
A Conglomerates
B Raiders
Financial planning 88
A Financing new investments
B Discounted cash flows
C Comparing investment returns
Financial regulation and supervision 90
A Government regulation
B Internal controls
C Sarbanes-Oxley
ECONOMICS AND TRADE
International trade 92
A Trade
B Balance of payments
C Protectionism
Exchange rates 94
A Why exchange rates change
B Fixed and floating rates
C Government intervention
Financing international trade 96
A Documentary credits
B Bills of exchange
C Export documents
Incoterms 98
A Transport and additional costs
B The E and F terms
C The C and D terms
46 Insurance 100
A Insuring against risks
B Life insurance and saving
C Insurance companies
The business cycle 102
A Expansion and contraction
B Fiscal policy
C Monetary policy
Taxation 104
A Direct taxes
B Indirect taxes
C Non-payment of tax
Business plans 106
A Market opportunities
B The company, the product and the market
C The financial analysis
Language reference 108
Market idioms
Numbers
Word stress
British and American vocabulary
Answer key 114
Index 132
Acknowledgements 140