Company performance

Any business is set up to make profit. But the founders sometimes do not have enough experience or make serious mistakes, which result in losses. The financial results of the company's operations can be seen from its financial reports.

There are a lot of reports submitted annually, semi-annually and quarterly. The most important one is the balance sheet, which describes the company's assets and liabilities as on the last date of each year.

If the liabilities are higher than the assets, the company has losses. In the latter case they say that the company is "in the red".

There are many other reports, letters, notes and messages, which a company has to submit. Some of them are very colorful, with photographs and illustrations and look like advertising material. But their contents are usually a summary of the above two documents and additional comments to them.

If we -deduct the company's expenses from its revenues, the result is gross profit before taxes. If we further deduct taxes from the gross profit, the result is net profit, which may be distributed among the shareholders as their dividends or may be reinvested. The shareholders adopt a resolution on this matter at their annual meet­ing.

Companies are usually reluctant (do not wish) to pay taxes and there are le­gal ways to avoid some of them. The company's ability to save on taxation de­pends on the professionalism of its accountants. The easiest way to avoid taxes is to

increase expenses through purchasing new machinery, investing m new technolo­gies, making money transfers to charity foundations.

The personal liability is on the chief executive officer (the board chairperson) and the chief financial officer who sign the reports. If the information contained in the documents is not correct and if the company tries to evade taxes, these persons may be fined or even jailed. Otherwise, they may escape to another country, which sometimes happens.

Vocabulary:

Proprietor-собственник

Intend-намереваться

Fraud-обманщик, мошенник

Supervise-наблюдать

Appointment-назначение на должность

Submit-подавать на рассмотрение

Deduct-отнимать, вычитать

Reluctant-не желающий (что-либо делать)

1 Continue sentences:

1) If a person wishes to launch a new business, he has to make some...

2) A limited liability company be...

3) There are a lot of reports submitted annually, semi-annually and...

4) Companies are usually reluctant (do not wish) to pay taxes and there are legal ways to...

2. Translate from English to Russian:

1) Preparatory steps

2) Intend to do business together

3) Business is set up to make profit

4) They may escape to another country

3. Answer the questions:

1) What differences have Limited Liability Company and sole proprietors?

2) By whom should be registered every new business?

3) What is the easiest way to avoid taxes?

4. Put the necessary words in each of this sentences:

1) Sole proprietors or... do not form a legal entity and have unlimited li­ability.

2) Any business is... to make profit.

3) The reports prepared by the company's accounting department are often verified by..., which is an independent public accountant

4) If we... the company's expenses from its revenues, the results is gross profit before taxes.

5. Connect words in word combination:

Liability Proprietors

Sole Company

Top Profit

Gross Executives

6. Are the following statements true or false?

1) A private company can sell its shares to the public.

2) Companies are usually wants to pay taxes.

3) While tax avoidance is allowed. Tax evasion is a crime.