English for business studies II (B2)

8. Explain what causes “demand pull inflation” in your own words and give an example. ______
_____________________________________________________________________________
_____________________________________________________________________________

9. Explain what causes “cost push inflation” in your own words and give an example. ________
_____________________________________________________________________________
_____________________________________________________________________________

10. Between 1950 and 1970, Venezuela had ___________________________________________
Explain the principal causes mentioned in the video that brought about the recent collapse of
the Venezuelan economy. Would you add any other reason?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

11. Describe what happened in each of these graphs.
From January__________________________________________________________________
_____________________________________________________________________________
Between 1995 _________________________________________________________________
_____________________________________________________________________________

12. What reasons does the video give to explain:
- the rise in cocoa prices? _______________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
- the increase in housing prices? __________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

40

 LANGUAGE USE 1. Graph language to describe

changes

TEACHER PPT PRESENTATION. In this unit, we will be concentrating on line graphs

or bar graphs, which show changes over time. Complete the slides at the end of
this unit with your teacher’s explanations pp. 56-59.

INTRANSITIVE VERBS TRANSITIVE VERBS
1. Must have an object.
1. Cannot have an object.
2. Only ACTIVE form 2. Can be ACTIVE/PASSIVE

Example: Examples:
Cigarette prices rose last week. Tobacco companies raised cigarette prices last week.
(active)
Cigarette prices were raised last week. (passive)

to rise  to raise sth/to put up sth A B
to go up/down to boost/to push up sth
to increase/decrease A
to drop  to increase/decrease sth
to fall
to reduce sth A B
to lower sth

LANGUAGE NOTE: There are many verbs which are used to describe
upward or downward movements or trends. As
 Do not use UP after words like increase, you can see in the chart above you must be careful
raise, rise, grow. as some are intransitive, others are transitive and a
third group can be both.
 Do not use DOWN after words like fall,
drop, decrease.

1. Verbs
1.1 To describe little or no movement
level off - implies to stop rising or falling and to begin to remain steady
remain steady /stay constant

1.2 To describe reductions carried out by a person/organization
There are a number of transitive verbs which are useful when talking about reductions such as:

Expenditure has been cut (back).
Prices have been slashed/reduced./Carrefour has reduced prices.

2. Prepositions
2.1 Verbs are followed by the preposition BY + (amount of increase)/FROM…TO+ (final
figure).

Gold prices increased by $15 an ounce.
Gold prices increased from $370 to $385 an ounce.

2.2 NOUNS are followed by the preposition IN + (what) /OF+ (how much)

There was a reduction IN spending OF 10% or a 10% reduction.
There has been an increase OF 6% IN the price of airline tickets.

3. Nouns

3.1 Many verbs have corresponding nouns:

an increase a rise a decrease a drop a recovery

41

Fill in the missing noun.

INTRANSITIVE TRANSITIVE

VERB NOUN VERB NOUN

to decrease /increase to decrease/increase sth

to drop to reduce sth

to fall to lower sth

to go up/down to boost/to push up sth

to rise to raise sth/to put up sth N.B. a raise = a salary increase in
US English
a rise = a salary increase in UK
English

4. Adverbs/Adjectives

It is also possible to use an adverb or adjective to indicate the amount of change:

In Spain there was a slight rise in sales./ Sales in Spain rose slightly.
European car sales have gone up gradually over the last six months./There has been a gradual upturn in car
sales over the last six months.
Sales in Britain have gone up steadily./There has been a steady increase in sales in Britain.
Inflation in Italy went up sharply. /There was a sharp rise in inflation in Italy.

Practice .
a. Place the letters describing the following movements next to the corresponding points in

the graph below

A. Sales bottomed out/reached a low 90
point. 80
70
B. Sales peaked/reached a peak. 60
C. Sales remained stable. 50
D. Sales grew slightly. 40
E. Sales plunged. 30
F. Sales stood at …… 20
G. Sales levelled off. 10

NOTE: A record high or low figure can 0
also be referred to as an all-time high J F M A M J Jl A
or an all-time low.

b. When you write a paragraph to describe a graph, you cannot simply list the movements.
You should start with a good topic sentence and the sentences should be connected to
form a cohesive paragraph. Complete the paragraph describing the above graph by filling
in the gaps with the expressions from the box. Then choose a suitable topic sentence from
the three options given below the box.

BUT NEXT THIS WHEN( 2X)
FOLLOWING THEN (2X) UNTIL (2X)

Circle the best topic sentences: 2.2a

a) Firstly, company turnover started the year with a dramatic increase.
b) Despite some fluctuations, company turnover remained constant in the first eight

months of 2019.
c) Now I am going to describe company turnover in the first eight months of 2019.

At the beginning of January turnover stood at $30m and ____________ grew slightly
___________ mid-February, ___________ there was a sharp increase. Turnover reached a
peak of $80m in March, ___________ in the ___________ month it plunged to a low of $20m.
___________ plunge was halted in April, ___________ turnover rose slightly ___________it
levelled off at $30m in May. Turnover ___________ remained stable for the
___________three months.

42

c. As seen in the above exercise one technique for making two sentences in a paragraph 2.2b
more cohesive is starting the second one with the nominal form of the verb used in the first
one. Practice this technique by completing the following sentences.

Example: Turnover plunged to a low of $20m. This plunge was halted in April.

1. Sales recovered in the last quarter thanks to the advertising campaign. This
______________ continued throughout the following year.

2. Microsoft announced excellent annual results in February. This ______________ led to
an 8% increase in the price of its shares.

3. Profits started to grow slightly in mid-January. This _______________________ was
maintained until our main competitor launched its innovative new line of cosmetics.

4. The number of people buying homes fell dramatically from 2008 to 2013. This
______________ _____________________ was halted in May 2014 when interest rates
went down.

5. Nissan has decided to close three factories in Europe. Nissan’s ___________________
has resulted in over 5,000 redundancies.

6. Colgate invested a lot of money in research in the 1980s. Thanks to this ______________,
today it is the leading company in the oral care sector.

7. The number of people living alone has risen sharply. This ________________________
has resulted in a change in consumer demand.

8. The company reduced its expenses by 8% in the first quarter. Thanks to this
_________________________, profits increased in the second quarter.

d. Transform the following sentences. If it is a verb + adverb, change to adjective + noun, and 2.3
vice-versa.

Example: Production costs fell slightly. There was a slight fall in production costs.
1. Consumer prices rose sharply.

2. There was a moderate 5% decrease in marriages.

3. Citrus exports have increased dramatically by 200,000 tonnes during the last few months.

4. Last year there were considerable fluctuations in the price of oil.

e. Fill in the missing prepositions. 2.4

1. Last year sales increased ____ 5% from 50m to 55m.
2. There was an increase ____ 5% ____ sales. Or There was a 5% increase ...
3. Turnover rose ________$2.7m ____ $3m.
4. There was a $3m (three-million-dollar) rise ____ turnover.
5. _______ January, exports rose moderately _____$10bn ____$13bn.
6. The euro continued dropping ________ June when it rose slightly.
7. _____ the beginning of June, the euro stood _____ $1.25.

43

f. Complete with the singular or plural form of the nominal expressions below. Notice when
THE is used and not used.

SINGULAR PLURAL
the price per share

oil prices

the price of gold per ounce

---- music sales

---- car sales

g. MORE EXPRESSIONS OF MOVEMENT 2.5
1. Label the movements on the graph using the words and expressions provided on the right.

a. e1. k.  a plunge
c. e2. j.  considerabl

d. g. h. e increase
b.  dramatic fall
i.  fluctuations
Dec Jan Feb Mar Apr May Jun  level off
f.  low point
 moderate
Jly Aug Sept Oct Nov Dec
rise
 peak
 recovery
 remain

steady
 sharp rise
 slight

decrease

Jan

2. Complete the following commentary on the graph above. All the gaps can be 2.6
completed with words or variations of the words on the graph. You will need to
change the form of the words in some cases (e.g. noun => verb, adjective => adverb,
etc).

Last year the company did not perform as well as expected due to the volatility of raw material
prices. From December to February, prices 1fluctuated. These 2______________________
ceased in February when there was a 3_____________________ in prices. They
4_____________________________ in March but 5___________________________ from

April to mid-May. Throughout late May and June there were further
6_________________________ in prices. In July prices suddenly
7_______________________ but this 8____________________ was halted in August.
Throughout August they remained at 9_____________________. They
10__________________ in September and this 11____________________ was maintained
until the beginning of October when prices 12_____________________, remaining
13_________________________ throughout October and November. In December prices
14_____________________ and 15_____________________ at the end of the month.

Go to Communication Files 1A/1B pp. 63-64
Worksheet 2.1 Describing a graph- p149

Worksheet 2.2- Hans Rosling's 200 Countries, 200 Years, 4 Minutes – p151

44

Cause and result structures

arise from because consequently given that owing to therefore
as a result because of due to give rise to result in so
as a result of bring about lead to make result from with the result that
(be) attributed to cause(d) thanks to which is why

a) Look at the sentences below from different economic news stories and for each one indicate
the cause or reason and the result. Then decide which of the cause/result structures in the
box above could be used in each gap. In many of them, more than one can be used. Try to use
all of the expressions above at least once.

b) If you are adding a verb, read the sentence carefully and decide if the verb should be in the
present perfect or the past tense.

1. The European Union had to bail out Greece because the Greek government could not pay
its debts.

2. The cuts in the hospital staff in many hospitals in Madrid in recent years HAS RESULTED IN
longer waiting times for operations.

3. Japanese exports are becoming more competitive BECAUSE OF the devaluation of the yen.

4. OWING TO the recent economic crisis, many university students are finding it difficult
to find jobs.

5. The sharp rise in the price of petrol in 2008 HAS) LED TO higher airfares. This

HAS MADE it more difficult for many people to travel.

6. The unemployment rate for young people in Spain is over 40%, SO many young people
are going abroad to look for work.

7. Since 2014, it has become increasingly easier to obtain a mortgage in Spain. CONSEQUENTLY
, there has been a gradual rise in the number of houses sold.

8. Many Spanish construction companies are surviving THANKS TO projects overseas.

9. The bankruptcy of the well-known investment bank, Lehman Brothers, in 2009 RESULTED
FROM the inability of homebuyers to pay back loans when interest rates began to go up,
GIVEN THAT Lehman Brothers had sold these bad debts worldwide, many foreign investors
were affected as well.

10. The economic crisis HAS CAUSED many people to lose their jobs.

11. The military conflict between the two countries AROSE FROM a dispute over oil.

12. There is a shortage of affordable housing in the city centres, WITH THE RESULT THAT many
people are moving to the suburbs.

13. An analysis of population trends, climate change, increasing pollution and emerging diseases found
that 40% of deaths in the world could be attributed to / due to environmental factors.

14. A growing number of Spanish women have joined the workforce, which is why they are having fewer
children.

c) Circle the expression in the box above that are VERBS (+PREPOSITIONS).

45

LANGUAGE USE 2. Linking cause and effect

a. What does each type of linking expression join?

_____ adverbial _____ prepositional expression

_____ conjunction _____ verb (+ preposition)

Now look at the box on the previous page and put each of the cause / result structures
in the correct place in the table below.

Box 1. A- expressions that act as B- expressions that act as adverbials
Sentence Structures conjunctions S1. ADVERBIAL, + S2
S + CONJUNCTION + S
Consequently,
because

, which is why

Box 2. C- expressions that act as D-verbs / verbs + preposition
Nominal Structures prepositions N + VERB + N
PREPOSITION + N
result from
because of

N + MAKE + sb/sth + VERB/ADJECTIVE
make
N + CAUSE + sb/sth + TO + VERB

S - sentence (subject + verb) N - nominal structure (no verb)

NOTE: There is a complete list with additional expressions and sample sentences in the
GRAMMAR REFERENCE SECTION of this unit (pp. 60-61).

b. In order to use these linkers well, it is important to know both the verb and nominal 2.7
structure of frequently used words. Complete the chart below.

Verb Noun Verb Noun
decide reduction invest devaluation
launch outbreak fluctuations
Noun cancel need
announce
lose strengthen Noun

grow weaken
improve recover
Adjective Adjective
difficult unstable
complex

46

c. Practice using expressions from the boxes above to combine the following two ideas correctly. Write
the same sentence in two ways, using the structures provided You cannot use “THE FACT THAT”,
“AND” or “WHICH”

Box 1. A-conjunctions B-adverbials
Sentence The GDP1 declined because there There was an economic crisis. Consequently,
Structures was an economic crisis the GDP declined.

Box 2. C-prepositions D-verbs (+ preposition)
Nominal The GDP declined because of the The economic crisis resulted in a decline in
Structures economic crisis. the GDP .

1. share prices fell by 15%  investors lost money
a) BECAUSE
_________________________________________________________________________________
b) DUE TO
_________________________________________________________________________________

2. smaller number of immigrants in Spain drop in the birth rate
a) THEREFORE,
_________________________________________________________________________________
b) GIVE RISE TO
_________________________________________________________________________________

3. trade deficit was reduceddomestic economy was strengthened
a) GIVEN THAT
_________________________________________________________________________________

b) AS A RESULT OF
_________________________________________________________________________________

4. Indian bureaucracy is complex difficult to do business there
a) CONSEQUENTLY,
_________________________________________________________________________________
b) MAKE (see BOX on the next page)
_________________________________________________________________________________

5. OPEC decided to cut back oil production sharp upturn in oil prices
a) SO
_________________________________________________________________________________

1 GDP –gross domestic product (= PIB-producto interior bruto)
47

b) RESULTED IN or FROM
_________________________________________________________________________________

6. political situation was unstable tourism declined dramatically
a) WITH THE RESULT THAT
_________________________________________________________________________________
b) CAUSED
_________________________________________________________________________________

7. currency devaluation  increase in the price of imports
a) AS A RESULT,
_________________________________________________________________________________
b) WAS ATTRIBUTED TO
_________________________________________________________________________________

8. outbreak of civil unrest in Egypt  cancellation of many flights
a) WHICH IS WHY
_________________________________________________________________________________
b) OWING TO
_________________________________________________________________________________

9. growing number of older people  need for more geriatric specialists
a) GIVEN THAT
_________________________________________________________________________________
b) BECAUSE OF
_________________________________________________________________________________
10. company lost $10m  two factories had to be closed
a) BECAUSE
_________________________________________________________________________________
b) LED
_________________________________________________________________________________

d. Look back at the video on INFLATION and write FIVE sentences about the information in your notes
using the structures below. Don’t write about the same thing more than once.

DUE TO - LED TO - MADE - WAS ATTRIBUTED TO - WHICH IS WHY

48

e. Fill in the gaps in the following text with CAUSE-EFFECT structures from this and the previous page.
Do not use any structure more than once. Pay careful attention to punctuation marks as they will
indicate what type of grammatical structure you should use.

Events in 2001 1_____________ the New York stock exchange fluctuate 2.8
throughout the year. From January to March there was relative calm. However,

at the beginning of April, an unexpectedly low level of economic growth in the

US 2_____________in a loss of confidence amongst investors 3_____________ they began

to sell their shares. 4_______________, share prices

fell dramatically throughout the first half of April. At

the beginning of May, investors' confidence was
restored 5_____________ of Microsoft’s

announcement of a 15% increase in profits for the first

quarter. The news 6_______________ to a rise of at

least 10% in the value of most leading companies'

shares. However, the summer brought more bad news

when some OPEC states threatened to reduce oil

supplies 7___________________ to US support for

Israeli incursions into Trans-Jordan. This threat

8_____________share prices to plummet to levels

which had not been seen since the oil crisis of 1973.

Thankfully, the threat was withdrawn in August

9___________________________ that the market

recovered in September. Share prices have generally

remained stable since then.

2.9

f. PAST -PAST PARTICIPLE - Write the past and past participle forms of the following
verbs.

grow cost
fall pay
rise stand

49

g. CORRECT THE ERRORS. ( ) indicates the number of errors in the sentence.
1. The company opened a new factory, consequently they hired 200 more workers. (1)
2. Fewer people are travelling abroad due to the air fares are high. (1)
3. The number of people buying homes fell down by 8% last year. (1)
4. After prices recovered slightly. (1)
5. In 2008 interest rates have fallen by 2%. (1)
6. Prices raised by 5% last year. (1)
7. Our products are more innovative thanks to we invested money in research. (1)
8. The changes in our product line have led sales to increase. (1)
9. Thanks to the new advertising campaign, sales have increased by a 12%. (1)
10. We have made a lower profit than last year because of our sales have fallen by 6%. (1)
11. There has been a slightly growth in the birth rate in Spain. (1)
12. The economic crisis has made that many people lose their jobs. (1)
13. We had invested most of our money in real estate, therefore we lost a great deal of money in

2008. (1)
14. Tourism to the Canary Islands increased thanks to the cheap package holidays offered by travel

agencies by 10%. (1)
15. On January 2009 GM announced 5,000 redundancies in its Detroit factory. (1)
16. In September, there was a low point. (1)
17. The decrease of taxes was attributed to the cancellation of the foreign debt. (1)
18. After exports had moderate recovered. (3)
19. The decision rose oil prices to $40 a barrel. (1)
20. There was a moderate rise in consumer prices until June when they were valued at $67. (1)
21. It has been a dramatical increase in unemployment in the last years. (3)
22. The population reduced until 12m. (2)
23. The demand for cocoa sharply grew as a result the rising popularity of dark chocolate. (2)

For further practice, do the exercises on p. 133

50

Frequently confused words arise-arose-arisen

1. Rise vs. Raise vs. Arise

rise-rose-risen raise-raised-raised

1. RISE

To rise means to go up, to become higher. Rise is intransitive. i.e. it cannot take an object.

 The price of petrol has been steadily rising each year.
 Petrol prices rose sharply during the Gulf War.
 Prices rose from $1300 a barrel to $1450 a barrel last year.
 Prices have not risen as much this year as last year.
 Interest rates are likely to continue to rise.

If something gives rise to a situation, it causes or creates it:

 The Pope’s ill-health has given rise to speculation about his successor.

2. RAISE

To raise means to put up, to cause to go up. It is transitive, i.e. it is followed by an object.

 A country can raise its interest rates to attract foreign capital.
 Airlines raised their fares last year.
 The government has raised the cigarette tax by 5%.

Raise is commonly followed by a number of different nouns:

 The company raised its standards of quality (=improved)
 They are trying to raise capital from a number of sources. (=obtain financing)
 I would like to raise the subject of .... (=introduce, bring up)
 Consumer groups are in favour of raising (=eliminating/removing) the ban (=the prohibition) on the

importation of Japanese cars. (=eliminate/remove)

3. ARISE

If a situation/a problem/an opportunity arises, then something occurs, comes up unexpectedly or
happens.

 Problems arise when you try to introduce changes too quickly.

Arise from may be used as a synonym of result from:

 Transport difficulties arose from the location of the plant . (= were the result of, were caused by,
resulted from)

4. RISE/RAISE – Other uses

A rise is any kind of increase:

 There has been a rise in the price of housing.

A rise may refer to the process by which a person becomes more influential and powerful.

 His rise to power resulted in the death of many of his rivals.

In American English a raise can also refer to an increase in salary- in British English, the word rise
is used.

 She asked her superiors for a raise (AmE.) a rise (BrE).

The expression give rise to means to cause to happen.

 The use of Internet has given rise to crime which did not even exist twenty years ago.

5. RISING/RAISED as adjectives

 Rising costs have contributed to reducing our profit margin. (= higher)
 At the meeting he spoke from a raised platform. (i.e. the platform was elevated, i.e. at a higher level

than the audience)

51

Practice 2.10/2.11

1. Complete the sentences appropriately using RISE, RAISE or ARISE (careful
with the form of the verbs).

1. If a company’s costs go up, then the price of its products must .............................................

2. Please do not hesitate to get in touch with us should the need ...........................

3. If any further questions ..........................., please contact Mr Gordon Clarke in our engineering

department.

4. Those in favour of the motion please ........................... their right hand.
5. The staff’s discontent ........................... from the fact that they are underpaid and overworked.

6. Printing costs ........................... last year by 14%.

7. We were able .............................. $100,000 through subscriptions.

8. Our expenditure on travel has ............................. excessively this year.

9. The chairman ................................... the question at the next meeting.

10.Some unexpected difficulties have ..........................

11.The company's turnover ...................................... steadily in recent years.

12.In business, it is often necessary .......................... capital for new projects.

13.I would like .......................... an important point here, if I may.

14.She .......................... to a senior position in a very short time.

15.The government has ..........................interest rates again.

16.I hope this situation will not ...................... again.

17.The company could not afford .......................... salaries in line with inflation.

18.Unemployment continues .......................... steadily.

19.The problem .......................... from inadequate supervision.
20.It’s not worth ..........................money for charitable causes if you don’t know how it is going to be

used.

2.12

2. Complete the emails below with RISE or RAISE or words derived from them.

TO: Financial Department
FROM: Human Resources
SUBJECT: Rising Travel costs

A problem has .............................. with the ........................... cost of business trips for our
executives. This is principally due to the fact that airlines .............................. their fares
by 12% over the last year with the result that travel expenses have surpassed the amount
we allocated in the budget for this item. In addition, travel costs have ..............................
due to the strength of the dollar against the euro.

Considering that the travel budget has not been .............................. in the past two years,
you must take these facts into account when you prepare next year’s budget.

Dear Tom,

Sorry I haven’t written in a while but a lot of problems have __________________ both at home and
at work. I’ve had to take on a second job because I didn’t get the pay ______________ I was
expecting to help pay for my kids’ _________________ tuition fees, which have _______________
over 20% over the last year! This means I have to work overtime and on the weekends. However,
with the current economic crisis, I guess I should be grateful simply to have a job.

I hope we can get together while you are in town on vacation next month. Give me a call as soon as
you get here.

Best regards

Mike

52

3. Connect the beginnings and the endings of the following sentences together, using
expressions with RAISE, RISE, or ARISE on the …… line and adding missing words in the
boxes.

Example: The autonomous government raised + N.

1. The demonstrations and strikes by a) an important point about this year’s
students and doctors .................................. _____ BUDGET , if I may.

2. Serious problems ..................................... with b) by 10% SINCE I started studying E-3.
the workers _____

3. The ICADE bookshop’s prices c) by the government to REDUCE/CURB
.................................. _____ alcohol consumption among young
people.
4. My cost of living has .................................. _____
d) the flight (=departure) of many
5. The French government’s decision to wealthy French people from their
…………… taxes on the rich country..
………………………….._____
e) the capital it needs for international
6. As a result of its ……………………… costs, the EXPANSION/GROWTH
company could not afford ..................................
_____ f) of the precarious situation of the
homeless in large cities.
7. I wonder what has made the President of
the European Central Bank g) hundreds of foreclosures (ejecución de
.................................. _____ hipoteca por impago) and evictions
(deshaucios).
8. Taxes will continue.................................. _____

9. [AT A COMPANY MEETING] I would like to h) due to government’s inability to
.................................. _____ CONTROL/REDUCE/LOWER the
deficit.
10. Taxes on alcohol have been
.................................. _____ i) its employees’ salaries in line WITH
inflation.
11. The increase in the EURIBOR meant that
many people could not pay their mortgages j) sharply this year. Consequently, I will
(hipotecas), which gave have to REDUCE/LOWER expenses
…………………………………_____ and live more austerely.

12. The company will have to issue more k) the interest RATES in the Eurozone.
shares in order to …………………… _____
l) the government cuts in HEALTH
13. The new Caritas campaign aims to CARE
………………… awareness _____

m) because OF the company’s DECISION
to close down its factories in Spain.

n) Example: taxes by 6%. in. 2016.

53

Language Reference

1. Talking about past and present habits

Used to Do

'Used to do something' expresses something that we often did in the past, but don't do anymore. It is
often used in the positive form to speak about repeated actions - something that was a habit, or a way
of life - in the past. Generally, we use the form to contrast past habits with present situations.

Examples:
I used to go jogging three times a week when I lived in Washington D.C.. Now, I'm too busy and can only jog
once a week.
Anne used to live in Sydney, but moved to London last year.
I used to enjoy having an espresso in the bar every morning when I lived in Rome. (I don't live in Rome any
more!)

Be careful: Use the infinitive or simple form in questions or negative sentences:

Did you use to take the bus to work when you lived there?
They didn't use to ask so many questions!

Would Do

'Would do' something refers to past actions and habits as well. Remember that 'would' is also
used in a conditional sense, (for example, I would love to go to the party if I were invited.)
You should not use 'would' in questions and negative sentences, as its meaning can easily be
misunderstood and confused with “would” in a conditional sense.

Examples:
- We'd spend a lot of money on projects that didn't help the company. = It used to be normal to spend

money on these projects, but now it isn't.
- They would ask a lot of crazy questions that didn't seem to make any sense. = In the past, they asked

questions that didn't relate to the situation.

Difference Between 'Used to' and 'Would'

'Used to' can refer to permanent situations as well as habitual actions.

Example:
 I used to be able to get up at nine o'clock every morning when I was younger. = It was possible for me to do

this in my past situation.
 I would be able to get up at nine o'clock every morning when I was younger.

Notice that 'Would' only refers to actions, but not situations.

Examples:
 He used to walk to school every morning. = He would walk to school every morning.
 I used to live in Zaragoza But not: I would live in Zaragoza.

Other Uses of 'Used to'

'Used to' goes together with a number of verbs to express how a person feels about a current
status or habit.

get used to /become used to/…+ V-ing (= to become accustomed to / to get
accustomed to  more formal equivalents)

Use these forms to express that a person is in the process of making something become
'normal'. They are often used with the present continuous form.

54

Examples:
 John's slowly getting used to his new job.
 He's becoming used to living in San Francisco

Note: When used with the present perfect, these two forms can imply that something that
was difficult in the past has become normal.

Examples:
 They've become used to working overtime.
 She's got(ten) used to living alone. (UK- get/got/got US- get/got/gotten)

The forms below mean the same thing but are more formal.

Examples:
 Jack has become accustomed to changing jobs once every few years.
 The children are getting accustomed to their new school.

To Be Used To (=To Be Accustomed To )

This indicates that a situation/ activity has become normal, customary or habitual for a

person.

Examples:
 Teenagers today are used to spending hours in front of the computer every day.
 I'm used to eating at work for lunch.
 He's accustomed to commuting to work every day.
 My boss is accustomed to employees not liking his decisions.

USED TO + INFINITIVE I used to play squash - I don’t play anymore

BE USED TO + NOUN or I am from Canada so I’m used to playing rugby in the
VERB+ING cold - I am accustomed to it

GET USED TO + NOUN or Now that I live in northern Australia, I am getting used
VERB+ING to playing rugby in the heat - I am adapting to the heat

a. Use a form of used to. 2.13

1. I find it hard _____ to the long dark evenings in winter.

2. I like it now, but I ____.

3. She lived in Mexico for 15 years but she could never_____ to the food.

4. It took me a while to ____ on a Spanish keyboard. (TYPE)

5. The policeman was extremely rude. I _____ spoken to like that! (NOT / BE SPOKEN)

6. I ____ football on Saturdays when I was at school. (PLAY)

7. Before I started cycling, I _____ to work by bus. (GO)

8. I haven't studied for ages so now I'm finding it hard to _____ every day. (STUDY)

9. He has really changed. He never _____ like that. (BEHAVE)
10. In spite of having been in New York for six months, it’s taking me a long time to ____ in English.

(THINK)

b. Supply an appropriate verb in the correct form.

11. I'm not used to ____ this early.
12. I used to ____ a lot before coming here.
13. You'll have to get used to ____ on the right if you move to Australia.
14. I didn't use to ____ it, but I do now.
15. They found it hard to get used to ____ in such a hot country.
16. Where did you use to ____ when you visited your grandparents?
17. It took me a while to get used to ____ the language.
18. I used to ____ a lot when I was in high school.
19. Have you got used to ____ it yet?
20. I'm not used to ____ so much coffee.

55

2. The language of graphs (PPT U 2.1)

56

LANGUAGE NOTE:
BE/STAY/REMAIN + ADJECTIVE
The verbs BE/STAY/REMAIN are
copulative verbs which must always be
followed by an adjective, NOT an adverb.
Prices remained steady (not steadily).

57

The adj/adverbs above are not in the right order. Match the expressions on the right to the
corresponding movement on the left.

58

Typical errors when describing graphs

1. Prices suffered a decrease.
2. Births experimented a fall.
3. Turnover had a rise.
4. Shares prices reached a minimum/maximum.
5. There was an important fall of interest rates in 2019.
6. Revenues fell down.
7. The number of deaths grew up by 10%.
8. Interest rates on mortgages increased in a 2%.
9. The airline rose its airfares by 10%.
10. Gasoline prices have been raising steady over the last few months.

59

3. Summary of the language of CAUSE /EFFECT

The cause-effect relationship can be expressed using different grammatical structures. Pay special
attention to the sentence patterns and the punctuation below.

S - sentence N - nominal structure

1. CONJUNCTIONS because, since CAUSE (S)
given that,
RESULT (S) Spain exported less last year.

The Spanish trade deficit grew

CAUSE (S) with the result that RESULT (S)
so, which is why
Spain exported less last year the Spanish trade deficit grew.

As CAUSE (S) RESULT (S)
Since
Given that Spain exported less last year, the Spanish trade deficit grew.

2. ADVERBIALS Therefore, RESULT (S)
Thus,
CAUSE (S) Hence, the Spanish trade deficit grew.
Consequently,
Spain exported less last year. For this reason,
As a consequence,
As a result,

3. PREPOSITIONS as a result of CAUSE (N)
because of
RESULT (S) due to // thanks to the fall in Spanish exports last year.
given
The Spanish trade deficit grew in view of
owing to
on account of

4. VERBS resulted in // drove RESULT (N)
led to // contributed to
CAUSE (N) caused the growth in the Spanish trade
gave rise to deficit.
The fall in Spanish exports last year brought about
The smaller number of Spanish
exports

RESULT (N) arose from CAUSE (N)
resulted from
The growth in the Spanish trade deficit was caused by the fall in …
was brought about by the smaller number of …
was attributed (p.p.) /
attributable (adj.) to …Spanish exports last
was driven by
year.

60

Other verb patterns RESULT (N) *REMEMBER: This structure is only

CAUSE (N) the growth in the used when introducing NEGATIVE
Spanish trade results/ consequences.
The fall in Spanish exports caused* deficit.
The smaller number of Spanish Inf. Verb (with to)
exports Spanish trade
deficit to grow.
CAUSE (N)
made RESULT (N) Inf. Verb (without to)
The fall in Spanish exports
The smaller number of Spanish the Spanish trade grow.
exports deficit
Comparative adjective

higher.

Level C1 5. Other expressions to indicate cause-result

CAUSE (S) (thus) EFFECT (V-ing)
The Spanish trade deficit grew,
(thereby)means increasing the Spanish trade deficit.

‘and as a result’.

The reason for the growth in the Spanish trade is that Spain exported less last
One cause of year.
deficit might be that

One effect of the fall in Spanish exports was that the Spanish trade deficit grew.
The result of was to make the Spanish trade deficit grow.
consequence of

Introduce REASON/CAUSE

CONJUNCTIONS VERBS PREPOSITIONS

Connect sentence clauses Connect a Nominal Subject and a Followed by a nominal structure or

/sentence + sentence Nominal Complement a gerund
Introduce because, since, as, given
REASON/ that arise from, (be) attributed to, as a result of, because of, on account
CAUSE
result from, (be) caused by, (be) of, the consequence of, in view of,

brought about by due to, thanks to (+), owing to,

Note: The verbs above are in given (without that)
infinitive form.

Introduce RESULT/EFFECT ADVERBS

CONJUNCTIONS VERBS

Connect sentence clauses Connect a Nominal Subject and a Connect new sentence to the
sentence + sentence Nominal Complement ideas expressed in a previous
sentence.
Introduce with the result that, so lead to sth, give rise to, cause, result in, Consequently, As a result,
RESULT/ bring about, Therefore, For this reason,
EFFECT Special structures (Hence*)
make sth happen/cause sth to happen
*very formal
Note: The verbs above are in infinitive
form.

61

U2 notes

62

Communication Files Student B

File 1A – Describing a graph

1. Listen to your partner’s description of the sales figures in millions of pounds of a company
over a period of 12 months. As you listen, complete the graph below.

2. The graph below shows the energy costs of a company over a period of 12 months.
Describe it to your partner.

63

Communication Files Student B

File 1B – Describing a graph

1. The graph below shows the sales figures in millions of pounds of a company over a period
of 12 months. Describe it to your partner.

2. Listen to your partner’s description of the energy costs of a company over a period of 12
months. As you listen, complete the graph below.

64

Unit 2-Check your progress

1. Use of IT WAS/WERE and THERE WAS/WERE

Language note:
There was /there were are always followed by a nominal clause preceded by the article “a” in the
singular, but no article in the plural. In the plural, it may also be preceded by a number or quantity
word (a few, several, etc). It is used to indicate the existence of something.
For example:
 There was an increase in crime.
 There were (further) fluctuations in the exchange rate.

You cannot say:
 There was the Gulf War.
 There were the September 11 terrorist attacks.
 There was the growth in the Spanish economy.

2.14

a. Complete using IT IS-THEY ARE- THERE IS – THERE ARE.

The best time of the year to visit Brixham is in the summer. Right now, ______________
July, and ________________ flowers everywhere. ________________ hot enough to wear
shorts all the time, but not too hot. Downtown, _________________ hundreds of tourists, but
if you don't like crowds, __________________ easy to get away. ________________ a
beautiful park called Beaconhill Park near the seashore, and ________________ only about
half a mile from downtown. From the park, _______________ a lovely view out to sea, and
often _____________ ships and sailboats passing by.

b. Complete the following sentences with the correct verb form in the correct tense.

1. ___________________ a high demand for oil so prices rose.
2. A new road was built. ___________________ followed by a sudden drop in accidents.
3. In September, __________________ several storms that destroyed the platforms.
4. After the election, _____________________ a drop in the government’s popularity.

__________________ halted (stopped) by the announcement of the fall in
unemployment.
5. It is predicted that over the next few months __________________ a moderate rise in
the pound
6. The shares went up in price with the result that _______________worth $45 at the end
of the month.
7. Recently _________________ a decrease in exports. ___________________ due to the
strength of the euro and cheaper overseas competition.

65

2. Rewrites
Rewrite the sentences below using the words provided in brackets.
1. Nickel prices went up due to an increase in steel production. (CAUSED)

2. U.S. competition has made Australia’s beef exports fall. (OWING)

3. The rising demand for beef in Asia will probably increase Australian beef exports. (THEREFORE)

4. The growing cost of health care is because of the high cost of medical treatments. (WITH THE
RESULT THAT)

3. Verbs for reporting changes - Review 2.15a

a. Add an expression that means the same as the expression provided using
different words.

decreased slightly increased sharply
______________________ ____________________

was/were erratic decreased sharply
______________________ ____________________

peaked at X reached a low point of Y
______________________ ____________________

stabilized remained steady
_________________ _________________

66

b. Adjectives and adverbs to describe changes

Adjectives (place BEFORE Adverbs (place AFTER the verb
the noun it modifies) it modifies)

Large changes sharp slightly

Small changes

c. RISE - RAISE – ARISE . Further practice (not in manual) 2.15b

4. Review of expressions for describing graphs

Each year at the Health Care Trade Fair in Spain, manufacturers of pharmaceutical products and

medical equipment attend to show their new products to professionals from around the

globe. 2.16

a. Look at the information in the bar chart below and the reasons for the changes.
Complete the description of the first bar chart.

Reasons for the changes
A - Exhibition moved to a new,

larger site in Madrid.
B - 2006 exhibition was poorly

organized.
C – Promotional campaign and

reduction in cost of stands
D - Non-European companies

were invited

The graph shows the number of exhibitors who set up stands at the Healthcare Trade
Fair from 2004, when it first opened, to 2009. The first year the trade fair only had 20
exhibitors. In 2005, the Healthcare Trade Fair moved to a new, larger site near the city centre
1___________________ the number of exhibitors 2___________________ to 60. However,
the first fair on the new site was poorly organized. 3___________________ , the number of
exhibitors 4___________________ the following year. 5___________________ of this, the
organizers wanted to make sure this did not happen again. 6___________________, in 2007
they 7___________________ the cost of the stands and did more promotion. These strategies
8___________________ the number of visitors rise 9___________________ from
10___________________ in 2006 to 120 in 2009, when the number of visitors
11___________________ 12___________________ to the 13___________________ of non-
European companies.

67

b. Write a similar description of the second bar chart explaining the reasons for the
changes in the number of visitors to the exhibition on different days. Use the
words in the box below in your text.

THANKS GIVEN THAT CAUSED LED THEREFORE

D

Reasons for the changes
A – Effective advertising campaign;

D public holiday in Madrid

B – Bad weather
C – Another important exhibition

opened in IFEMA
D – Organizers made entrance free

from Thursday to the end of the
week.

5. used to - to be / to get used to - usually 2.17

Complete the following sentences with the correct form and tense of USE and
the verb in brackets. In some cases, there is more than one possible answer.

Example: Sending emails to my grandmother is difficult. She isn't ___________ (use) a
computer. => She isn't used to using a computer.

1. Ann ________________________ (have) a iPod, now she uses her iPhone to listen to music..

2. We haven't seen Bob very often since he got a promotion. He's very busy. He ____________
_______________(not - have) so much work in his old job.

3. I've just got my first full-time job. It's exciting but I'll have _____________(work) regular
hours.

4. It is difficult for Tom to drive in England. He still ___________________________ (not -
drive) on the left-hand side of the road.

5. When Peter was young, he _______________________ (ride) a bicycle to school.

6. People from India _________________ (find) our food tasteless. They
____________________ _______________________ (eat) hot spicy food.

7. Computers ________________________ (be) very expensive. Now the prices are much more
reasonable.

8. English has become international. Businessmen _____________________________ (speak)
English at international meetings.

9. During my childhood, I _____________________________ (spend) a lot of time with my
grandparents.

10. Young people today ___________________________ (get) married much later than their
parents did.

11. Maria ___________________________________ (think) that she would never
__________________________________________(live) in New York but now, she loves it.

12. I ______________________ (study) at night because it is quieter.

6. Cause-Result Matching Activity. Review. (available online only) 2.18

68

Unit 3 – Company accounts

 Preliminary questions

1. What are the key financial statements a company prepares every year?

2. What does each tell us about the company?

3. What do you say when a company makes money in a given year? And when it doesn’t make
money?

4. One of the key statements is generally presented in two columns showing what a company
owns and what it owes. What are the two column headings that appear called?

5. What is a “listed” company?

6. What do you call the publication which listed companies present yearly to their shareholders
as well as to the regulatory authorities?

 R e a d i n g 1 . The key accounting documents

A listed company is a company that is registered and whose shares are sold on a stock market.
In order to be listed, a company must be a public limited company (plc) in the UK or a corporation
in the United States. By law, these companies are required to present their annual accounts to the
regulatory authorities every year. They also publish the company’s results in an annual report,
which is distributed to the shareholders.

The annual report contains three key financial statements, namely the balance sheet, the
profit and loss account and the cash flow statement. Of these three documents, people are most
familiar with the first two.

The balance sheet, also called the statement of financial
position, portrays the financial position of the company by
showing what the company owns and what it owes on a certain
date.

The profit and loss account, also referred to as the
income statement, reflects how well a company performed
during the period presented and indicates whether the company’s
operations have resulted in a profit or a loss.

If a company has a majority interest in other companies,
the balance sheets and profit and loss accounts of the parent
company and its subsidiaries are normally combined into
consolidated accounts.

69

1. Go back and find an alternative name for each of the statements in the table below. Write
the alternatives in the boxes provided. When you finish, do Ex 3 in the CHECK YOUR
PROGRESS section at the end of this unit on p.89)

the balance sheet (USA) is also …
a corporation (USA) …known as / …referred to as / … called

the profit and loss account (UK)

2. Fill in the opposites of: 3.1

to own
a sale
a loss
income

3. Answer the questions below by indicating in which financial statement (balance sheet or

profit and loss account) you would find the necessary information and

completing the statement using an embedded (≈ indirect) question. The first 3.2
one is done for you. (See Grammar Reference 1 at the end of this unit on p87)

EXAMPLE: How well did the company perform last year?

The Profit and Loss Account reflects how well the company performed last year.

1. How much are the company’s assets worth?
The ...................………............. shows ...................................................................................
..................................................................................................................................................

2. Did the company make a profit or loss last year? (ALLOW/DETERMINE)
The ...............……............................................ the company directors ...................................
..................................................................................................................................................

3. How well did the company perform? (LET/ SEE)
The ......................…………..…..……………… the shareholders ..........................................

4. What does the company own?
The ......................…………..…..….. contains information about ...........................................

5. How much does the company owe? (LET/KNOW)
The ......................…………..…..….. the shareholders ...........................................................

6. Is the company doing well? (ENABLES/VERIFY)
The ......................…………..…..….. the shareholders..............................................................
............................................................................................................................................

70

7. How much money has the company borrowed from banks?
The ......................…………..…..….. indicates .........................................................................
............................................................................................................................................

8. How much did the company spend on producing the goods it sells? (HELPS / DETERMINE)
The ......................…………..…..…..the Production Manager ..................................................
....................................................................................................................................................

9. How much did the company earn last year? (ENABLE/FIND OUT)
The ......................…………..…..…..the CFO ...........................................................................
....................................................................................................................................................

10.How much did raw materials cost? (LETS /KNOW)
The ......................…………..…..…..the Production Manager ..................................................
....................................................................................................................................................

Reading Formulas

Reading mathematical equations and formulas is never easy. It takes practice.
Write in the grid how to express these symbols in a professional context.

Sign Mathematical expressions and operations

+ plus Verb/Operation
-
x add / addition
÷
=
>
<
%
m2

Go to Communication File
1A p.85/1B p.86

71

LANGUAGE USE:

1. Revenues – expenses = net profit /or/ net loss
can be expressed by saying:

 Revenues minus expenses equal net profit or loss.
 By subtracting expenses from revenues, you arrive at net

profit or loss.

2. Fixed assets + current assets = total assets
can be expressed by saying:

 Fixed assets plus current assets equal total assets.
 By adding current assets to fixed assets, you get

total assets.

3. EBIT/Sales x 100 = Operating Profit Margin ratio
 By dividing EBIT by sales and multiplying by
100, you can find what percentage of your
revenues are profit.

Here are some more complicated but useful formulas worth
learning to read correctly.
Try to express the following equations in different ways
where possible using BY.

Sales – cost of goods sold = gross profit. 
By subtracting cost of goods sold from sales, you
arrive at gross profit.

 Gross profit – operating expenses and depreciation = EBIT.
 Assets = liabilities + owners’ equity.
 Current assets-current liabilities= working capital (fondo de maniobra)
 If sales > expenses, the company will turn out a profit.
 Owners’ equity = assets – liabilities.
 Break-Even point = Fixed Costs / Sales Price – Variable Cost Per Unit
 If a company’s sales < its competitors’, the company is less profitable.
 net profit / number of shares = EPS
 Profit Margin = Net Income / Sales
 EBIT / sales X 100 = company’s profitability
 Acid-test ratio (aka quick ratio)= Current assets – Inventories / Current liabilities

See more ratios at the following site: 15 Key Financial Ratios Every Investor Should
Use (Investing Answers) shorturl.at/sxAO2

72

VERBS to describe parts of a whole

1. Verbs used to indicate all the parts of a whole
be made up of / be composed of / be divided into / consist of / comprise

 The Board is made up of Executive and Non-executive Directors.
 The annual report is composed of 3 main sections.
 The company is divided into 3 business units.
 The Financial Review comprises the MD&A and the Financial Statements.
 The balance sheet consists of three sections.

2. Verbs used to indicate some of the items in a document, but not necessarily all of them
include / contain ( use only for documents or containers)

 The key financial documents contain the most relevant financial figures.
 The Business Review includes facts and figures about the different product lines.

Complete the sentences below using a different expression each time.
1. ICADE .........................................................................................................................................

2. The EU.........................................................................................................................................

3. Spain ............................................................................................................................................

4. The Spanish legislative branch ....................................................................................................

5. Andalucía.....................................................................................................................................

6. The USA ......................................................................................................................................

7. Great Britain ................................................................................................................................

8. The income statement ..................................................................................................................

Task 1. Mini-presentations. The two key financial statements

Individually or in pairs, the teacher is going to assign a task related to one of the two key
financial statements that we will see in this unit. You will have to go to a web site, and listen
to the explanations about the statement you are assigned.

(STATEMENT A-Watch Topic 4 / STATEMENT B-Watch Topic 7)

As you listen, you will be expected to take notes and complete the worksheet which is
available next to the Website link in the Moodlerooms Virtual Learning Platform.

You will be expected to use the information to prepare a mini-presentation (which will be
done in groups of 2 /or/ 4) about your document, to be given on the date set by your teacher.
Anyone who is not present on that day will get a 0 for the task.

Go to Worksheet 3.1a p153 or 3.1b p154

73

Classifying

Place the following items in the appropriate place in the
diagram below.

1. 6 delivery motorcycles

2. a patent for its secret pizza sauce recipe

3. 100 kilos of flour

4. interest due on a short-term bank loan

5. a mortgage

6. an unpaid invoice for 600 jars of Volume Pizza Sauce purchased by a

local supermarket chain last month

7. a new laptop computer for the accountant

8. city taxes (= business rates) 1-
9. the Volume Pizza trademark Shareholders’
10. six pizza ovens
equity

11. 1,000 shares in the company 6- Current 2- Current
12. an unpaid invoice for last week’s assets liabilities

pepperoni delivery 3- Long-term
liabilities
13. cash in the company safe for day-to-day VOLUME
expenses – petty cash PIZZA

14. the building for a new pizzeria

15. an overdraft (descubierto bancario)

5- Tangible
fixed assets
non-current

assets

4- Intangible
non-current

assets

74

Talking about money – useful verbs 3.3

Helen Bradley and Keith Sullivan are both businesspeople who do their own accounting
for their businesses. They both produce “widgets”1. Helen is English while Keith is American.

Fill in the missing verbs used to talk about money. Some verbs are used more than once.
Pay special attention to the preposition provided.

1. I was fortunate because my parents were able to 2. Last year we _________________ a lot of
money on renewing the company’s obsolete
_____________ me the money to start my company; I
didn’t have to ___________ any from a bank. computer systems.

3. I am waiting to be ___________ by some
of our customers, who are my debtors.
They _______ my company money.

4. We _______ our widgets to 5. My creditors
our customers, who are also include the suppliers
known as accounts. I ________ money
to.
6. The company suffered a serious setback
last year when it had to recall hundreds of 7. I mustn’t forget to __________ tax to the Inland Revenue on
defective widgets. We _________ a lot of time! Our tax this year ____________ to £10,500.
money and couldn’t __________ a
dividend because of that.

a. If you want to run a successful business, b. I was very happy with how the company performed
you have to ensure that your costs do not last year. After paying costs and taxes, it ____________
______________ your revenues. 20% more than the previous year and ___________ a
profit of $800,000.
k. EBIT ___________ for
“earnings before interest and c. The customers that I’m waiting to be
taxes”. ___________ by are my accounts
receivable.
j. To _________ the capital to
start the company, the founding d. The suppliers and other organizations
members ___________ that I ___________ money to are my
100,000 shares to the public. accounts payable.

i. I use accrual accounting, e. My knowledge of accounting
which records expenses enables me to ______________ the
when ____________ , not company’s finances myself.
when they are _______ .

h. I have a feeling I am never g. Next year the f. After many years of renting, we
going to ________________ company plans to decided to _____________ our offices,
from one or two customers; ______________ so now we _____________ the
they are bad debts and I will quite a bit of money premises from which we operate.
have to write them off. in R & D.

1 widget –invented word used to refer to an imaginary product that a company might produce: Example: Company A produces

6000 widgets a month at a unit price of $0.33. 75

LANGUAGE USE 1. Review of defining, non-
defining and reduced relative clauses

Professional writing in English should be concise. Therefore, relative clauses, especially reduced
relatives, are frequently used. You should be familiar with the use of relative pronouns, when
commas are needed and the verb forms used in reduced relatives.

a. Defining and non-defining relative clauses

Together with a partner look at the following sentences and supply the missing 3.4

relative pronoun. Some have more than one possible correct answer.

1) Public limited companies, ________________________ shares are traded on the stock

exchange, are required to present their accounts every year to the public.

2) The statements ________________________ we will be looking at in greater detail are the
balance sheet and the profit and loss statement.

3) Sales revenue, ________________________ is often called turnover, represents the total
revenue generated from the ordinary trading activity of the company.

4) In the income statement ________________________ follows, the direct costs are deducted
from the revenue figure of $6.2m.

5) Extraordinary items, _________________ sometimes appear in income statements, are “one-
off” items ________________________ are neither predictable nor routine.

6) The last part of the income statement shows that net profit can be distributed in two ways:
dividends, ________________________ are the profits distributed among stockholders and
retained profit, _____________________ is the amount earned _____________ is reinvested in
the business.

7) The number of stockholders _____________________ receive a fixed dividend can vary.

8) The profit and loss account has several other names, the most common of
________________________ is the income statement.

9) In 2005 Polycord recorded a total net profit figure of $1.82 million, 67% of
__________________ was reinvested in the business.

10) Annual reports contain several different financial statements, each of _____________________
provides valuable information about the company’s finances.

11) Under current assets, you have debtors, __________________ are also referred to as Accounts
receivable, or A/R for short.

Look at the sentences again and explain:
 why certain relative clauses take commas.
 where “which” can be replaced by “that” and why.
 where a relative pronoun is not necessary Sentence # ____________

 what preposition follows quantity or partitive words (#9 and 10) ___________

 underline any reduced relative clauses you can find

76

b. Reduced relative structures

1. Look at the underlined expressions on the previous page. These are what are known as
reduced relative clauses because the relative pronoun is “invisible” (see sentences # 3 &
6). There are four types of reduced relative clauses. Go to the reference section at the
end of this unit if you are not sure what they are. (Language Reference p88)

2. Look at the definitions below. Cross out the words that can be omitted.
permanently belonging

1. things that permanently belong to the company fixed assets
2. money which is received by the company from sales  _____________________
3. the difference between the amount of money that has been received for selling a product and

the amount of money that has been spent on making the product  -
_____________________
4. money that is owed to suppliers  _____________________
5. costs which have been incurred by the company in buying raw materials and producing
goods _____________________
6. short-term bank loans that will be used to meet day -to day running expenses -
_____________________
7. money that has been borrowed from the bank which has to be repaid in the long term -
_____________________
8. the loss in value of equipment etc. that is due to use or age  -
_____________________
9. things in which the company invests money but plans to sell within (=in less than) the year
_____________________
3. As you can see, it is not always possible to omit words, unless the form of the verb is
changed as well. Reduce all of the relative clauses above by making the necessary
changes.
4. Supply the specific term being defined in each of the sentences above

Go to Communication File 2A p.85/ 2B p.86

77

LANGUAGE USE:

1. The verb “to incur”, generally used in the expression “to incur costs, debts or
expenses” does NOT require a preposition after the verb INCUR. (= contraer
gastos, deudas)
With its recent expansion, the company has incurred huge debts.

2. Do NOT confuse “profit” with “benefit”,
which means advantage, gain or future good.
She had the benefit of a good education.
He didn’t benefit from his stay abroad.

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Reading 2

Show me the money: what financial statements tell you

If you saw the movie Jerry Maguire, you may recall Cuba Gooding
Jr. saying “Show me the money!” That’s exactly what financial
statements do. They show you where a company’s money came
from, where it went, and where it is now. Let’s review what
financial statements do.

This unit has focused on two key financial statements: 1. the balance sheet or statement of
financial position, and 2. the income statement or profit & loss account. The first one shows
what a company owns and what it owes at a fixed point in time. The second one provides
information about how much money a company made and spent over a period of time.

1. The balance sheet is a snapshot of a company’s assets, liabilities and shareholders’

equity on a specified date. On the left side, companies list their assets. On the right side, they
list their liabilities and shareholders’ equity. Sometimes balance sheets are laid out
differently, showing assets at the top, followed by liabilities, and shareholders’ equity at the
bottom.

Assets are things that a company possesses that have value. This means they can either be
sold or used by the company to make products or provide services that can be sold. They
include physical property, i.e. tangible assets such as plants, trucks, equipment and
inventory. They also include things that cannot be touched, i.e. intangible assets such as
trademarks and patents. Another intangible asset is goodwill, which refers to an intangible
asset that provides the company with a competitive advantage, such as a solid reputation, or
high employee morale. Cash as well as investments that a company has made in other
companies also appear under assets.

They are generally listed based on how quickly they will be converted into cash. Current
assets are things a company expects to convert to cash within one year and non-current
assets are things a company does not expect to convert to cash within one year or that would
take longer than one year to sell. The latter include fixed assets, which are used to operate
the business but that are not for sale, such as trucks, office furniture and other property.
Depreciation reflects the reduction in value of these fixed assets due to age, use or
obsolescence.

Liabilities are amounts of money that a company owes to others. This can include all kinds
of obligations, like money borrowed from a bank to launch a new product, rent for the use
of a building, money owed to suppliers for materials purchased such as raw materials or
components, payroll a company owes to its employees, environmental clean-up costs or
taxes owed to the government. They also include obligations to provide goods or services to
customers in the future.

They are generally listed based on their due dates. Current liabilities are obligations a
company expects to pay off within the year. Long-term liabilities are obligations due more
than one year from the date on the balance sheet.

Shareholders’ equity is sometimes called net worth. It is the money that would be left if a
company sold all its assets and paid off all its liabilities. This leftover money belongs to the
shareholders, or the owners, of the company. This item refers to the amount that owners
invested in the company’s stock plus or minus the company’s earnings or losses since its
foundation. The amounts that are reinvested in the company are called retained earnings or
reserves. Companies with good results also distribute part of their earnings. When they do,
we say the company declares and pays out a dividend.

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2. The income statement is a report that shows how

much money a company earned over a specific time
period. It also shows the costs and expenses associated
with earning that revenue. The bottom line usually
shows the company’s net income, i.e. net
profit/earnings or loss. This financial statement also
reports earnings per share (EPS), which tell you how
much money a shareholder would receive if the
company decided to distribute all of the net earnings
for the period. Seldom do companies distribute all of their earnings. Instead a considerable
amount is usually reinvested in the business under reserves or retained earnings.

Companies that provide services such as banks have a different type of income statement
that will not be discussed here. To understand how the statement of a company that produce
goods is set up, think of it as a set of stairs. At the top of the statement is the total amount of
money brought in from sales of products. This top line in the income statement is often
referred to as turnover or sales. Moving down the stairs, the next line typically shows the
cost of sales or COGS (cost of goods sold), which tells you the amount of money the
company spent to produce the goods it sold during the accounting period. COGS would
include the direct costs attributable to the production of the goods sold by a company, such
as the cost of materials used in producing the goods along with the direct labor costs. It
excludes indirect expenses such as distribution costs, advertising or administrative staff
costs.

The next line subtracts the costs from the turnover to arrive at a subtotal called gross profit
because there are certain expenses that have not been deducted yet.

The following section deals with overheads (aka operating costs), which are fixed running
expenses that support a company’s operations as a whole– for example, salaries of
administrative personnel, or the costs of researching and developing new products.
Operating expenses such as marketing costs are another example. They differ from cost of
sales, which were deducted above, because they cannot be linked directly to the production
of the products being sold.

Depreciation, which is the process by which a company allocates an asset's cost over the
duration of its useful life, is also deducted. Companies spread the cost of these assets over
the periods they are used. Once the above expenses are deducted from gross profit, you
arrive at the earnings before interest and tax (EBIT) or operating profit.

Next, companies must account for interest income and interest expense. Interest income,
which is the money companies make from investing in other businesses by buying shares in
them or from keeping their cash in interest-bearing savings accounts, for example, is added.
On the other hand, interest expense, which is the money companies paid in interest for
money they borrowed, is subtracted or deducted from the EBIT. In addition, income tax is
deducted and you arrive at the bottom line: did the company make a profit or did it lose
money?

Most income statements include a calculation of earnings per share (EPS). As mentioned
above, this calculation tells you how much money shareholders would receive for each share
they owned if the company distributed all of its net income for the period. To calculate EPS,
you take the total net earnings or profit and divide it by the number of shares outstanding1.

1 shares outstanding - The shares of a company that have been issued and are in the hands of the public.

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Language note amortization / depreciation

In a balance sheet, accumulated depreciation means the reduction in value of a fixed asset
due the wear and tear on plant and capital goods such as machines and equipment as a result of
age and use.

In an income statement, depreciation expense refers to the allocation of the cost of assets to
the periods in which the assets are used. Generally the cost is distributed, as depreciation
expense, among the periods in which the asset is expected to be used.

The term “amortization” is used with reference to intangibles (e.g. patents, copyrights)
whereas depreciation is used with tangibles. In practice, amortization tends to be the term
most commonly used in Spanish and depreciation the term used in English.

1. Reading comprehension

a. Match the beginnings and endings of the statements below logically based on 3.5
the information provided in the preceding text. The number in [ ] indicates the
section of the reading it is based on.

1) When a company sells all its assets and pays off all a) distributed among the shareholders.
its debts, [1] _____ b) on the right side of the balance sheet.
c) reinvested in the company or distributed
2) Shareholders’ equity is recorded [1] ____
3) Dividends are the company’s earnings that are [1] among the shareholders.
d) related to the production of goods or
____
services that the company sells or
4) Net earnings can either be [2] ____ provides.
e) what remains of a company is the
5) Due dates indicate [1] ____ shareholders’ equity.
f) when a debt must be paid.
6) Overheads are expenses that are not directly [2] ____

b. Complete the table in Check Your Progress Ex. 2 on p. 90 with all the synonymous
expressions you can find in the previous reading.
Example: balance sheet = statement of financial position

Go to Worksheet 3.2 p.155

81

c. The following are extracts from conversations overheard in a company called ECOM.

What concepts are being discussed? Refer to words and expressions in bold in the
reading “Show Me the Money” in the previous pages.

1. Why are the ___________ higher than the ______________ 2. I want to know what ______________
per share? Because the latter exclude the part of the __________________ the company
can sell to raise money quickly.
profits that have been reinvested in the company.

3. I have to find out whether ECOM really made a 4. Utilities and rent are too expensive in London so
profit in 2020. I’ve deducted interest expense we’ve decided to transfer our operations to a
from the operating profit, but I still need to cheaper part of the country where our
___________________ will be lower.
subtract ________________________.

5. We're planning to wind the company up in 6. It's easy to place a financial value on
three years. We’ll sell what we own and fixed assets such as our buildings and
hopefully we'll cancel our debts. What will be vehicles, but harder when we're
left will be the ________________________ talking about ____________________.
_______________, which will be given back to
7. How much did ECOM’s sales amount to this
the shareholders. year? Let me check the _________________
figure that appears on the _______________
______________________.

8. We only have six months to pay for these
components supplied to us by Acme Ltd so list

this expense under ______________________.

9. If you want to know how much was spent on
production in 2019, look at the
__________________________ figure on the

______________________________.

10. Our shareholders are not going to be very
happy. In view of all the losses we
sustained this last quarter, we will not be

able to ___________ a dividend this year.

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2. Word-building 3.6a

a. With some words, many forms can be generated. Complete the table accordingly.
For example: PROFIT

VERB NOUN ADJECTIVE NEGATIVE ADJ
to accrue
to add complete
to belong current
to calculate
to cost decrease
deduction
to distribute depreciation
to divide
expense/expenditure undistributed
to earn foundation unprofitable

to own increase operating
to pay investment
liability
to profit loss
to provide
to purchase obligation
to research
to retain product/production profitable
to sell
to subtract a profit /
profitability

rent

taxes

b. Complete the following sentences by choosing another form of the words in bold. 3.6b
1) A part of what a company earns is usually reinvested in the business in the form of retained

_______________.

2) As of next year, the number of tax deductions available will be smaller as certain expenses
will no longer be tax-_______________.

3) We might be able to increase _______________ by selling through mass merchandising
channels.

4) Once you convert dollars to euros you will see that our profit margin is a mere 5%. Our profit
margin looks much higher before you make the _______________ into euros.

5) As a shareholder with limited liability you will not be held _______________ for the debts
incurred.

6) Loewe products are generally purchased by people with a high _______________ power.

7) The restaurant has recently changed owners and is now under new ______________.

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8) _______________ is due on the first day of the month. Failure to pay on time will incur a
charge of 10%.

9) We must produce more per worker. If we continue being _______________, we will lose
market share and suffer a _______________ in position.

10) Since its foundation in 1902, the company has made substantial investments in research and
development. Ever since it was __________________, it has _______________ $10m in
____________________ ways of improving people’s diet.

11) The simplest mathematical operations are _______________, _______________,
multiplication and _______________. Yet how many of us add, subtract, multiply and divide
in our heads?

12) The company normally distributes a part of the profit and puts the remaining
_____________________________ profits or earnings in reserves.

13) In accrual accounting, _____________ expenses indicate amounts of money that have been
spent but that the company still has to pay. An ____________ bill to a supplier would be an
example.

14) In addition to the price of the hotel room, you have to include the VAT, which stands for
Value _________________ Tax.

c. Rewrite the sentences using a form of the word in bold without changing the original meaning.
1. You are under no obligation to buy from us.

We cannot ...........................................................................................................................................
2. Although considered assets, what belongs personally to directors does not appear on a balance

sheet.
Although considered assets, directors’ personal

...............................................................................................................................................
3. That electrical company provides electricity to the entire region.

That electrical company is responsible for the ..................................................................................
4. Shareholders must pay taxes on their share of the profits.

The shareholders’ share of the profits is .............................................................................................
5. The company operates in over 56 countries.

The company has ................................................................................................................................
6. Ten percent of our revenues were spent on investments in other companies.

We ....................................................................................................................................................
7. The reserves come from the part of the profits the company does not distribute to shareholders.

Reserves come from the company’s ................................................................................................

84

WRITING. Comparing and contrasting accounting terms

1. Your teacher is going to dictate eight pairs of accounting terms. Discuss with a partner
what they have in common. Make your explanations as specific as possible.
e.g. cost of goods sold – operating expenses  They are both entries found on the
income statement.

1. ___________________________________________
2. ___________________________________________
3. ___________________________________________
4. ___________________________________________
5. ___________________________________________
6. ___________________________________________
7. ___________________________________________
8. ___________________________________________
9. ___________________________________________
10. ___________________________________________
11. ___________________________________________
12. ___________________________________________

Choose and define four of the pairs of terms dictated and use each of the following
structures once to compare and contrast them. Try to choose the terms which were the most
difficult for you (not the easiest). Use the SAMPLE TEXT below as a model.
Do not repeat the introductory verbs (e.g. see those underlined in the text below.)

LANGUAGE USAGE:
1. Both A and B refer to ____. However, while A ___, B___.
2. Like A, B is/are considered ___. However, A __ whereas B
__.
3. Although A and B both are classified as__, while A __, B __.
4. A and B, both of which can be defined as ___, differ in that
the former_________ whereas the latter __________.

85

Communication Files Student A

File 1A

Dictate the following formulas to your partner. Then write down the formulas student B

dictates. ……………………………………..
a+e+i=u

7y – 8b + g = 12 ……………………………………...

oj / e = 0 ………………………………………

File 2A

Your partner will read you a series of definitions. Find the term being defined in the statement
below so that your partner can write the term next to its definition. Then read the following
definitions to your partner, who will in turn find the term in his/her statement. Write the
correct answer next to each definition below.

1) ___________________________ - money owed to the company by customers/clients

2) ___________________________ - costs incurred which the company has not yet paid

3) ___________________________ - debts due in more than one year

4) ___________________________ - money invested by shareholders

5) ___________________________ - short-term loans granted by banks to help companies to meet
short-term running expenses

6) ___________________________ - debt issued by corporations to raise capital to finance a new
project, for example

7) ___________________________ - a type of intangible asset that provides added value to a
company’s worth, such as a strong brand, reputation, or high
employee morale

Polycord Plc: Income Statement as at 31.12.20 (£’000)

Turnover 2015 2014
Cost of sales 6200 5600

Gross profit (2200) (2600)
Administrative expenses and other 4000 3000
overheads
Depreciation (1400) (1500)
(200) (200)
EBIT (= Operating profit) 2400 1300

Investment income 700 450
Interest expense (500) (550)
2600 1200
Profit on ordinary activities before tax

Income tax (780) (360)
Net income 1820 840

Dividends (600) (120)
Retained earnings 1220 720
Dividend per share 25p
75p

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Communication Files Student B

File 1B

Write down the formulas student A dictates. Then dictate the following formulas to your

partner. ………………………………………
1/x + 1/y = z

8ei = 9 - u ……………………………………...

d – e + 4y = 16 ………………………………………

File 2B

Read the following definitions to your partner, who will in turn find the term in his/her
statement. Write the correct answer next to each definition below. Your partner will then give
you a series of definitions. Find the term being defined in the statement below so that your
partner can write the term next to its definition.
a) ___________________________ - the final difference between the money a company receives

and the money it spends

b) ___________________________ - total amount of money a company earns before tax

c) ___________________________ - money to be paid to shareholders

d) ___________________________ - regular expenses incurred by the company in the running of
the business, such as rent, light, heating, telephone or salaries
for the office staff

e) ___________________________ - money reinvested in the business

f) ___________________________ - a charge to be paid for borrowing money

g) ___________________________ - the allocation of the cost of acquiring assets to the periods in
which the assets are used

Polycord Plc: Balance Sheet as at 31.12.20

ASSETS £’000 LIABILITIES £’000

Current assets Current liabilities 110
219
Cash at bank 383 Bank overdrafts and loans 100
340
Stocks - Finished goods 800 Trade creditors/Suppliers 260

- Work in progress 49 Accrued expenses

Trade debtors 880 Other creditors including taxation

Total Current Assets 2112 Dividend payable

Fixed assets Long-term liabilities 570
Land and buildings 1448 Bank loans 420
PP&E 1307 5.5% debentures payable 2023 2019
Investments
724 3100
Intangibles TOTAL LIABILITIES 1146
Goodwill, Trademark, 4246
Patents Shareholders’ equity
Total Long Term Assets 674 Share capital 6265
4153 Retained earnings
TOTAL ASSETS
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY

6265

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Language Reference

1. Embedded Questions

These are noun clauses that begin with who, what, where, when, why, how, if/whether and so on.
They are called embedded questions because they look like questions inside sentences.

Syntactically, the word order is the same as that of polite questions. The order follows that of a
normal sentence – S +V+O. Auxiliary verbs like DO, DOES and DID are not used in the affirmative
form. Here are some examples:

Normal question: QW + Aux + S + verb …?
Indirect question:  Introductory phrase + QW / if

/whether + S + verb…

What is the company’s reputation worth?
Goodwill tells you …what the company’s reputation is worth.

How much did the company earn?
Turnover provides information about …how much the company

earned.

Did the company make a profit?
The bottom line indicates …whether / if the company made a

profit.

Scrambled sentences (Created using http://esl.bobs12.com Sentence Scrambler v0.01 ) 3.7

Rearrange the words below to form correct sentences:

1. products. – sales” - producing – the - its - spent - company - of - and - much-
distributing - on - indicates - how – “Cost

2. much - how - show – payable” - is – “Accounts - owed - suppliers. - money - to

3. hand”– much – the - cover - money - information - to - available - in - company - how -
about - expenses. - provides - has – “Cash - sudden

4. “Profit” - much - company - costs - the - shows - how - earned - paid. - were - all - after - money
88

2. Relative Clauses

1. Defining and Non-Defining Relative clauses

1. Defining Relative Clauses

- provide essential information that tell us which thing we are referring to. We never use commas in
such sentences.
WHO, WHICH or THAT

The statement is important.

Which statement?
 The statement that shows what a company owns and what it owes.

2. Non-Defining Relative Clauses

- provide extra information about the thing we are referring to. We must use commas to separate the
‘extra information’ in these sentences.
Only WHO, WHICH can be used.

 The balance sheet, which shows what a company owns and what it owes, is important.

2. Subject/object relative clauses.

It is possible to omit the relative pronoun if it is the complement, i.e. object, of a sentence (i.e. it is
followed by a NOUN/PRONOUN + VERB):

 The cash flow forecast which/that Chris drew up has been accepted by the bank.
 The cash flow forecast which/that Chris drew up has been accepted by the bank.

Subject People Things
Object who, that which, that, what
Possessive who, that, whom which, that
whose whose

You should also consult the section on Problematic Relative Clauses in your first semester
manual.

3. Reduced Defining and Non-defining Relative Clauses
Reduced or shortened relative clauses are very common in written English. Below are some
examples:

a. PASSIVE REDUCED RELATIVES  + past participle

 The annual report, which is signed by the Chairman, is sent to all stockholders.
means the same as

 The annual report, signed by the Chairman, is sent to all stockholders.

b. ACTIVE REDUCED RELATIVES  + present participle

 The accounts receivable heading consists of 10 debtors, each of whom owes more than $10,000.
means the same as

 The accounts receivable heading consists of 10 debtors, each (of them) owing more than $10,000.

c. REDUCED RELATIVES BEGINNING WITH AN ADJECTIVE  + adjective

 The graph shows a fall in profits which is proportional to our decreasing sales.
means the same as

 The graph shows a fall in profits proportional to our decreasing sales.

d. REDUCED FUTURE RELATIVES  + to be + past participle

 The project, which will be presented at the Board meeting next week, will cost over $10 million.
means the same as

 The project, to be presented at the Board meeting next week, will cost over $10 million.

89