UNIT 8
FINANCE
Europe’s Enron
Page 70
Adjectivitas and adverbs
Page 72
Career skills : Revering to visuals
Page 73
Dilemma : Counting the costs
Page 74
The bottom line
Keynotes
Huge losses experienced by investors and employees due to missmanagement and
iregularities in financial reporting have led to a demand for stricter corporate governance.
Independent auditors such as the SEC (Securities and Exchange Commision) in the US have
been checking balance sheets, which show the overall performance of companies and income
statements (AmE) or profit and loss accounts (BrE) which show the difference between total
income and outgoings for a given period.
Preview The Profit and Loss Account (P&L)
Study the incomplete P&L below. complete the document with the followingheadings.
Use a dictionary to help you.
Reseach and development costs
Interest receivable
Costs of materials
Turnover
Gross profit
Dividend
Consolidated Profit and Loss
_____________________________________________________________________
For the year ended Dec 31 in $m
____________________________________________________________________________
Forecast
700
1 Turnover (sales revenue)
Other earnings
Gains on fixed assets and operations
2 Interst receivable on investsment
2012
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Bahasa Inggris II
Marifa Retno Gayatri
Pusat Bahan Ajar dan eLearning
http://www.mercubuana.ac.id
Actual
704
250
175
244
162
Listen to two investors talk about what happened to them when they invested in two
media companies. Which of the above methods were used to drive up share prices in
each case?
2
Listen again and complete the graphs
NavTEch Stock price Euros (€) 1998-2001
60
50
40
30
20
10
0
×
1998
1999
2000
2001
2002
Com. TV
Stock price Euros (€) 1999-2003
140
120
80
60
20
0
×
1999
2000
Speaking
Reading
2001
2002
2003
Can you think of any other famous financial scandal?
Corporate governance
1
Read the text about corporate governance. What accounting irregularities are
mentioned? Who was responsible?
Corporate governance
Europe’s Enron
The Ahold financial scandal should shock Europe into accounting and corporate
governance reform, just as the Enron scandal did in the USA.
2012
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Bahasa Inggris II
Marifa Retno Gayatri
Pusat Bahan Ajar dan eLearning
http://www.mercubuana.ac.id
It may seen an exaggeration to describe that scandal overwhelming Royal Ahold as “Europe’s
Enron” – but in many ways it is true enough. Certainly, the world’s third-biggest food retailer,
after Wal-Mart and Carrefour, presents none of the financial risks of Enron, which was both
deeply in debt and the world’s largest electricity giant. That apart, the similarities between
Speaking Do you think CEOs who falsify accounts are criminals and should go to the jail
or it is an acceptable risk to falsify accounts if it helps to safeguard the company’s future
and jobs?
Vocabulary Choose the best words to fill each gap in the sentences below
1. Sales are the good way for _________to get rid of surplus stock
a. Retailers b. sellers
c. dealers
d. wholesalers
2. The company was in fact seriously __________ even though they claimed to be making
profit.
a. At a loss b. in debt
c. in the black d. broken
3. Some companies __________ their earnings to drive up shares prices.
a. Overdo
b. overflow
c. overstate d. oversee
4. The Financial Service Authority was set up in the UK to deal with __________ such as
fraud and insider trading.
a. Issues
b. ideas
c. reasons
d. purposes
5. When the CEO should have been cost cutting, he was pending huge sums on
__________ that turned out to be unprofitable.
a. Increases b .investors c. growth
d. acquisition
6. When you buy in bulk you can obtain __________ or rebates.
a. Discounts b. sales
c .decreases d. interest
7. Shareholders lost money when the company declared itself __________
a. Redundantb. sold out
c. broken down
d. bankrupt
8. When they heard about our financial difficulties our __________ asked to be paid in
advance.
a. Service
b. deliveries c. suppliers d. orders
9. They didn’t lie – they simply tried to _________ the truth.
a. Conceal b. prevent
c. reduce
d. warn
Language check Adjective and adverbs
Look at the following uses of adjectives.
-before nouns
There was a dramatic fall in profits last year.
-after stative verbs such as be, become, seem, appear, look, etc.
The similarities between Ahold and Enron are striking.
Look at the following uses of adverbs.
-after verbs
Shares fell sharply on the news.
2012
3
Bahasa Inggris II
Marifa Retno Gayatri
Pusat Bahan Ajar dan eLearning
http://www.mercubuana.ac.id