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    Alya Ghaitsa Putri - D42192456 - Gol. D - AE - Practice 3

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    Alya Ghaitsa putri
    Charles, the Managing Director, and Sally, the Financial Director, discuss the company's debt problem. The high level of debt is making it difficult to attract new investment and raising concerns from shareholders. They need a solution soon as they are investing in a new factory. Charles suggests leasing assets to exclude liabilities from the balance sheet, but Sally notes the auditors will closely examine such transactions under accounting standards. No final decision is made and it is unclear if Sally agrees with Charles' suggestion.

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    Alya Ghaitsa Putri - D42192456 - Gol. D - AE - Practice 3

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    Alya Ghaitsa putri
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    Charles, the Managing Director, and Sally, the Financial Director, discuss the company's debt problem. The high level of debt is making it difficult to attract new investment and raising concerns from shareholders. They need a solution soon as they are investing in a new factory. Charles suggests leasing assets to exclude liabilities from the balance sheet, but Sally notes the auditors will closely examine such transactions under accounting standards. No final decision is made and it is unclear if Sally agrees with Charles' suggestion.

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    Alya Ghaitsa Putri_D42192456_Gol. D_AE_Practice 3

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    Charles, the Managing Director, and Sally, the Financial Director, discuss the company's debt problem. The high level of debt is making it difficult to attract new investment and raising concerns from shareholders. They need a solution soon as they are investing in a new factory. Charles suggests leasing assets to exclude liabilities from the balance sheet, but Sally notes the auditors will closely examine such transactions under accounting standards. No final decision is made and it is unclear if Sally agrees with Charles' suggestion.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views3 pages

    Alya Ghaitsa Putri - D42192456 - Gol. D - AE - Practice 3

    Uploaded by

    Alya Ghaitsa putri
    Charles, the Managing Director, and Sally, the Financial Director, discuss the company's debt problem. The high level of debt is making it difficult to attract new investment and raising concerns from shareholders. They need a solution soon as they are investing in a new factory. Charles suggests leasing assets to exclude liabilities from the balance sheet, but Sally notes the auditors will closely examine such transactions under accounting standards. No final decision is made and it is unclear if Sally agrees with Charles' suggestion.

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    of 3

    12 Listen to the conversation between the Managing Director (Charles) and the

    Financial Director (Sally). Answer These question. Make a note of the words and
    phrases that helped you to answer.
    1. Do Charles and Sally agree that their company has a debt problem
    Answer : Yes.
    2. What are the consequences of the debt problem?
    Answer : It is getting harder to attract new investment.
    3. Why do they need a solution to the problem soon?
    Answer : They are investing in a new factory in Slovakia.
    4. How does Charles suggest they deal with it?
    Answer : Lease the assets.
    5. Has Charles made a final decision about what to do?
    Answer : No.
    6. Do we know whether Sally agrees with Charles’s suggestion?
    Answer : No.
    13. Fill in the gaps in the extracts fron the conversation.
    Charles The shareholders are getting nervous, and the markets don’t like our
    level of Gearing .We’re getting more and more questions about
    whether we can service Our debt, in the long term. It’s getting attract
    new investments. So I wanted to speak to you about what we can do.
    We’re investing a significant amount in our new factory in Germany so
    we need to come up with A solution soon. The new factory is very
    important, and we’re looking at leasing the assets.
    Sally You’re thingking that if we lease the assets, we can exclude these
    liabilities from the balance sheet?
    Charles Exactly
    Sally You know that the auditors will look very closely at these transactions?
    The Accounting standards , or principles if you like, mean that finance
    leases must be disclosed . If we are effectively the owner of these
    assets, then we’re not going to have a choice.
    14. Match these words with their meanings.
    1. Debt money that is owed.
    2. Lease an agreement where the owner of something allows someone else to use
    it for a specific time for a sum of money.
    3. Gearing the proportion of own capital to borrowed funds when buying an asset
    or financing a company.
    4. Liabilities the opposite of assets.
    5. Contract an agreement between two or more parties, often written.
    6. Transaction buying or selling something.
    7. Shareholder someone who owns parts of a company.
    15. Use liability, liabilities, debt, or debts to complete the sentences below.
    1. He’ll have paid his debts off by next year.
    2. Look at the assets and liabilities On the balance sheet if you want to know
    how the company’s doing.
    3. Many developing countries are burdened by heavy debt.
    4. We need to look at the long term liabilities Before we think about any major
    new purchases.
    5. The partnership has limited liability status.
    6. Current liabilities Are those wich are paid off within a year.
    7. The company’s in debt To the tune of 10 million.

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