Wasting assets

1. …………… are anything that can quickly be turned into cash.

2. …………… are the excess of current assets (such as cash, inventories, debtors) over current liabilities (creditors, overdrafts, etc.).

3. …………… are those which are gradually exhausted (used up) in production and cannot be replaced.

4. …………… are those which will be consumed or turned into cash in the ordinary course of business.

5. …………… are those whose value can only be quantified or turned into cash with difficulty, such as goodwill, patents, copyrights and trade marks.

6. ……………, or shareholders’ equity, on a business’s balance sheet, in assets minus liabilities (which is generally equal to fixed assets plus the difference between current assets and current liabilities).

7. ……………, such as land, buildings and machines, cannot be sold or turned into cash, as they are required for making and selling the firm’s products.

1.12. Choose the correct alternative to complete each sentence:

If a person or business has more debts than money to pay them, this means they have more (1) …………… than assets, and they are (2) …………… . If a (3) …………… takes the matter to court, the person or company is declare bankrupt. A bankrupt company goes into liquidation or receivership or is wound up. The court appoints a liquidator (or receiver, or administrator) who realises (i.e. sells) the company’s (4) …………… in order to repay creditors. A failing business can choose voluntary winding up, in which case it appoints its own liquidator. In America a (5) …………… in difficulty can ‘file for Chapter Eleven’ and propose a recovery plan; it is then temporarily protected from its creditors, and given some time to attempt to solve its problems. A failing business that knows it has no reasonable chance of avoiding bankruptcy should stop trading. Continuing to (6) ……………, and building up debts with creditors that will never be paid, is called wrongful trading and is illegal. There are limits to limited liability!

1.	a)	equity;	b)	liability;	c)	liabilities.
2.	a)	illegal;	b)	illiquid;	c)	insolvent.
3.	a)	borrower;	b)	creditor;	c)	debtor.
4.	a)	assets;	b)	debts;	c)	liabilities.
5.	a)	corporation;	b)	partnership;	c)	proprietor.
6.	a)	do business;	b)	earn;	c)	make business.

<== попередня сторінка	\|	наступна сторінка ==>
Which principles do these sentences refer to?	\|	Think of other more colourful, but less polite ways of saying that a company has gone bankrupt.

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