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Vocabulary

Business terms and roles

1 Match the financial terms (a-k) with the correct definition (1-11).

a creditor

1 A person of organization that owes money to the company.

b revenue

2 A person of organization that the company owes money to.

c overheads

3 To legally stop doing business and close a company because of financial losses.

d to go bankrupt

4 The money that a company earns from its sales.

e to break even

5 To earn enough money to pay for the costs of running the company but no more (no profit is made).

f debtor

6 How much a company earns before certain costs and taxes are deducted.

g net profit

7 The total amount of money that an organization spends on something.

h to overspend

8 How much a company earns after all the costs and taxes are deducted.

i gross profit

9 To spend more than you originally planned in your budget.

j operating profit

10 The profit which comes from a company’s usual activities of providing goods or services.

k expenditure

11 The costs of running the company e.g. rent, electricity and water bills, etc.

2 The words in the box below have similar meanings to three of the words from Exercise 1. Write the word with the similar meaning next to the one in the box.

t o cover costs ……….

to go into liquidation ………

turnover ………

3 Choose the correct expression from the box below to complete the definitions (1-3). You need to put the verbs in the correct form.

t o chase payment to pay off a debt to write off a bebt

1. If a company pays the money that it owes to someone, then it ………… .

2. If a company tries to make a person of organization pay it the money that they owe (e.g. by sending out letters to remind them), then it ………… .

3. If a company decides to stop trying to get the money that a person of organization owes it (because, for example, the company no longer exists) then it ……… .

4. In the following sentences (1-5), TWO of the alternatives (A-C) are possible and ONE is not. Circle the two alternatives which are possible.

1. I don’t think we will make a profit next year, but we hope to at least…

A break even

B go bankrupt

C cover costs

2. Operating profits fell last year but the company managed to save some money be reducing…

A expenditure

B overheads

C revenue

3. The company budgeted for €120,000 but the project cost them nearly €200,000. They … by nearly €80,000.

A covered costs

B overspent

C exceeded their budget

4. The company was very successful last year and increased their … from €29,000 to over €32,000.

A debts

B revenue

C turnover

5 A great many people lost their jobs when the company …

A went bankrupt

B broke even

C went into liquidation

5. In the following sentences (1-4) one word does not make sense. Identify the word and change it for another from Exercise 4 to make a logical sentence.

1. The company was not a success and finally went bankrupt last year. Some

creditors

debtors are still waiting for payouts.

2. The company has begun to write off its debts in instilments under a new agreement with the creditors.

3 A Profit last year was £42,000

B Do you mean gross or net?

A Oh no, I mean gross. After the production costs and overheads were deducted.

4. That company has gone into liquidation. I’m afraid we’re just going to have to pay off the money that they owe us.