UNIT 1 MONEY, BANKING AND CENTRAL BANKING

READING 1 THE BANKING SYSTEM IN THE ECONOMY

1C 2B 3D 4D 5A 6A 7C 8B
VOCABUALRY EXERCISES
I. Match the terms in column A with their definitions in column B
1 - E 2 - G 3 - C 4 - F 5 - A 6 - I 7 - D 8 - K 9 - B 10 - H

- A NOW account, otherwise known as negotiable order of withdrawal account, is

an interest-earning bank account whereby the owner may write drafts against the
money held on deposit. Mutual savings banks, commercial banks, and savings and
loan associations offer NOW accounts.
What is the difference between a checking account, a demand deposit account, and a
NOW (negotiable order of withdrawal) account?
- A demand deposit account is just a different term for a checking account. The
difference between a demand deposit account (or checking account) and a
negotiable order of withdrawal account is the amount of notice you need to give to
the bank or credit union before making a withdrawal.
- Most demand deposit accounts (DDAs) let you withdraw your money without
advance notice, but the term also includes accounts that require six days or less of
advance notice.
- NOW accounts are essentially checking accounts where you earn interest on the
money you have deposited. With a NOW account, the bank or credit union has the
right to require at least seven days written notice of a withdrawal, though this is
rarely done.
- Not all accounts that give you checks are “checking accounts.” Other deposit
products, such as money market accounts, may allow you to write checks, but they
are not generally suited for day-to-day business, given the restrictions on their use.
In addition, a lender may give you checks to access credit, such as a personal loan,
home equity loan, or other lines of credit. These types of checks allow you to
access your loan.

II. Fill in the gaps in the sentences using words/ phrases in the box.
1. Legal money
2. demand deposit
3. borrowers
4. stabilize
5. Bill of Exchange (B/E)
6. Letter of credit (L/C)
7. simple interest
8. exchange rate
9. float
10. clearing

WRITING
I. Match the terms in column A with their definitions in column B
1 - C 2 - H 3 - E 4 - A 5 - F 6 - K 7 - B 8 - G 9 - D 10 - I
II. Read the following text and write a summary.
Summary
Commercial banks hold customers’ deposits and make loans. Investment banks raise funds
for industry. Deregulation in Britain and the US has led to the creation of financial
conglomerates similar to the universal banks that have always existed in German speaking
countries. A country’s minimum interest rate is usually fixed; banks charge progressively
higher rate to less secure borrowers.

READING 2 MONEY AND ITS FUNCTIONS

VOCABULARY EXERCISES
1. Complete the following passage with suitable words
1 commodity 2 exchange 3 token 4 gold 5 redeemed
6 intrinsic 7 payment 8 accept 9 currency 10 forms
2. Choose the best answers.
1 C 2 A 3 C 4 B 5 B 6A 7C

TRANSLATION
I. Translate the following text into English

SOME MAIN FUNCTIONS OF A COMMERCIAL BANK

The main functions of commercial banks are accepting deposits from the public and
advancing them loans.
However, besides these functions there are many other functions which these banks
perform. All these functions can be divided under the following heads:
1. Accepting deposits
2. Giving loans
3. Overdraft
4. Discounting of Bills of Exchange
1. Accepting Deposits:
The most important function of commercial banks is to accept deposits from the public.
Various economic sectors of society, according to their needs and economic condition,
deposit their savings in the banks.
For example, fixed and low-income group people deposit their savings in small amounts
from the points of view of ensuring security and more income. On the other hand, traders
and businessmen deposit their savings in the banks for the convenience of payment.
Therefore, keeping the needs and interests of various economic sectors of society, banks
formulate various deposit schemes. Generally, there are three types of deposits as follows:
(i) Current Deposits:
The depositors of such deposits can withdraw and deposit money whenever they desire.
Since banks have to always keep the deposited amount in accounts in cash, they/ these
accounts carry either no interest or very low rate of interest. These deposits are called as
Demand Deposits because these can be demanded or withdrawn by the depositors at any
time they want. Such deposit accounts are highly useful for traders and big business firms
because they have to make payments and accept payments many times in a day.
(ii) Fixed Deposits:
These are the deposits which are deposited for a definite period of time. This period is
generally not less than one year and, therefore, these are called as long-term deposits.
These deposits cannot be withdrawn before the expiry of the stipulated time and,
therefore, these are also called as time deposits.
These deposits generally carry a higher rate of interest because banks can use these
deposits for a definite time without having the fear of being withdrawn.
(iii) Saving Deposits:
In such deposits, money up-to a certain limit/ level can be deposited and withdrawn once
or twice in a week. Interest rates charged on such deposits are very less. The main
objective of these deposits is to mobilize small savings. These deposits are generally done
by salaried people and the people who have fixed and less income.

2. Giving Loans:
The second important function of commercial banks is to make loans to its customers.
Banks get interest from the borrowers and this is the main source of their income.
Modern banks give mostly secured loans for productive purposes. In other words, at the
time of making loans, they demand proper security or collateral. Generally, the value of
security or collateral is equal to the amount of loan. This is done mainly with a view to
recover the loan money by selling the security in the event of non-refund of the loan.

3. Over-Draft:
Banks advance loans to its customer’s upto a certain amount through over-drafts, if there
are no deposits in the current account. For this, banks demand a security from the
customers and charge very high rate of interest.

4. Discounting of Bills of Exchange:

This is the most prevalent and important method of advancing/ making loans to the traders
in the short-term. Under this system, banks advance loans to the traders and business firms
by discounting their bills. In this way, businessmen get loans on the basis of their bills of
exchange before the time of their maturity.

To make full use of its deposits a bank needs to offer a wide range of lending
services and other banking functions. The banks make money by lending money,
especially to company customers who need large sums. These company customers
expect many other services which personal customers do not need. These include
import and export services and issuing guarantees. Many of these services do not
involve lending money so the banks charge fixed amounts for each service. We call
this kind of income “fee income”

A deposit account is another popular kind of account. It has advantages over a

current account. First of all, it is easier to open than a current account. There is no
need to see the manager. A customer only has to fill in a form and then deposit the
minimum amount of money required by the bank. The customer is then given a
pass book which he must bring to the bank every time he wishes to withdraw or
deposit money. The pass book is the customer’s record of the account. Secondly, a
deposit account earns interest for the customer. The bank invests the money that
the customer pays in and, in turn, the bank pays the customer interest. The rate of
interest in the UK is not fixed but it is usually between 5 -10%. However, a deposit
account has certain disadvantages, too. In the UK, at the moment, the maximum a
customer can withdraw in one day is £20 and a prior notice (usually a week notice)
is required if the customer wants to withdraw money from this account. Another
disadvantage is that the customer receives no cheque book and therefore he cannot
pay bills so easily.

STT Từ vựng chuyên ngành Nghĩa

1 A sight draft hối phiếu trả ngay

2 Accept the bill (v) chấp nhận hối phiếu

3 Accepting house (n) ngân hàng chấp nhận

4 Accommodation bill (n) hối phiếu khống

5 Accommodation finance (n) tài trợ khống

6 Accumulated reserve (n) nguồn tiền được tích luỹ

7 Acknowledgement (n) giấy báo tin

8 Amount outstanding số còn tồn đọng

9 Analyse (v) phân tích

10 Appraisal (n) sự định giá, sự đánh giá

11 Approach (v) tiếp xúc, đặt vấn đề

12 Asset (n) tích sản

13 At a discount giảm giá, chiết khấu

14 Authorise (v) uỷ quyền, cho phép

15 Avalise (v) bảo lãnh

16 Bad debt (n) cho nợ quá hạn

17 Banker (n) chủ ngân hàng

18 Banker’s draft (n) hối phiếu ngân hàng

19 Base rate (n) lãi suất cơ bản

20 Bill of exchange (n) hối phiếu

21 Budget (v) dự khoản ngân sách

22 Builder’s merchant nhà buôn vật liệu xây dựng

23 Buyer default người mua trả nợ không đúng hạn

24 Cash discount giảm giá khi trả tiền mặt

25 Cash flow (n) lưu lượng tiền mặt

26 Cash-book (n) sổ quỹ

27 Central bank (n) ngân hàng Trung ương

28 Cheque book (n) tập Séc

29 Coin (n) tiền kim loại, tiền xu

30 Comparatively (adv) một cách tương đối

31 Consumer credit (n) tín dụng tiêu dùng

32 Contract (n) hợp đồng

33 Corporate (adj) công ty, đoàn thể

34 Corporate (n) hội, đoàn, công ty

35 Corporate (adj) đoàn thể, công ty

36 Correspondent (n) ngân hàng có quan hệ đại lý

37 Credit (v) ghi có

38 Credit arrangement (n) dàn xếp cho nợ

39 Credit control (n) kiểm soát tín dụng

40 Credit instrument (n) công cụ tín dụng

41 Credit management (n) quản lý tín dụng

42 Credit period (n) kỳ hạn tín dụng

43 Credit rating đánh giá tín dụng

44 Credit-worthiness (n) thực trạng tín dụng

45 Current account (n) tài khoản vãng lai

46 D/A (n) nhờ thu trả chậm

47 D/P (n) nhờ thu trả ngay

48 Data bank (n) ngân hàng dữ liệu

49 Database (n) cơ sở dữ liệu

50 Debit (v) ghi nợ

51 Debt (n) khoản nợ

52 Debtor (n) con nợ

53 Deposit account (n) tài khoản tiền gửi

54 Deutsch mark (n) tiền tệ Tây Đức

55 Dinar (n) tiền tệ Nam Tư, Irắc

56 Direct debit (n) ghi nợ trực tiếp

57 Discount market (n) thị trường chiết khấu

58 Documentary letter of credit thư tín dụng

59 Drawee (n) ngân hàng của người ký phát

60 Drawing (n) sự ký phát (Séc)

61 Foreign currency (n) ngoại tệ

62 Founder (n) người thành lập

63 Gearing (n) vốn vay

64 Good risk (n) rủi ro thấp

 UNIT
UNIT 10 7 TAXATION

PREVIEW
Match the terms in column A with their definitions in column B
1. D 2. G 3. B 4. I 5.F 6. J 7. H 8. C 9. E 10. A
READING 1: TAXATION
I> According to the text, are the following statements are TRUE or FALSE? Give the
evidences.
1. T 2. F 3. F 4. T 5. F 6. F 7. F 8. T
II> Find words in the text that mean the following
1. accelerated depreciation 2. Disincentive 3. progressive
4. proponents 5. self-employed 6. money laundering
7. perks 8. tax shelter 9. deductive
10. a tax haven
READING 2
Read the following text and choose the best answer A, B, C or D
1 D 2 B 3B 4C 5B 6D

Translate into English

Taxes are a defined as mandatory payments of the contributors to the budget and to
the extra-budgetary funds in the amount determined by law and within the stipulated
deadlines.
The functions of taxation illustrate its social purpose of the value-based
distribution and redistribution of income. Each of the functions fulfilled by the taxation
instrument is a manifestation of an internal feature or an indicator of the economy.
According to the activities of the government, taxation can have some functions as
follows:
a. Raise revenue for the government
The government can raise revenue from providing goods and services. These goods are of
two types - public and merit goods. Public goods, such as defense and social security are
consumed collectively and every citizen can enjoy them if he wishes to do so. These goods
have to be provided by governments. Merit goods, such as education and medical care,
could be provided by private institutions, but usually not in the amounts/ level satisfying
the social demand and hence governments may subsidize the production of certain goods.
This may be done for a variety of reasons but mainly because the market may not reflect
the real costs and benefits of the production of a good. For example, the public may be
subsidized because the market does not take account of all the costs and benefits of the
public transport system.
b. Economic stability
Taxes are imposed to maintain economic stability in the country. During inflation/ In
times of inflation, the government imposes more taxes in order to discourage the
unnecessary expenditure of the individuals. During/ In times of deflation, taxes are
reduced in order to enable the individuals to spend more money. In this way, the increase
or decrease helps to control the big fluctuations in the prices and maintain economic
stability.
c. Fair redistribution of income
A major function of taxation is to bring about some redistribution of income. First, tax
revenue provides the lower income groups of people with benefits in cash and kind.
Second, the higher income groups of people, through a system of progressive taxation, pay
a higher proportion of their income in tax than the less well-off members of the society.
d. Pay interest on National debt
Taxes are also levied by the government to pay interest on national debt.
e. Optimum allocation of resources
Taxes are also imposed to allocate resources of the country for optimum use of these
resources. The amounts collected by the Government from taxes are spent on more
productive projects. It means the resources are allocated to achieve the maximum possible
output in the given circumstances.
f. Protection policy
Taxes are also imposed to give protection to those commodities which are produced in the
country. The government thus imposes heavy taxes on the import of such `harmful to
human health e.g. excise duty on wines, cigarettes, etc.

New vocabulary
extra-budgetary funds: quỹ ngoài ngân sách
stipulate deadlines: thời hạn quy định
mandatory: bắt buộc
manifestation: sự biểu hiện
internal feature: tính năng nội bộ
merits: hàng hóa công ích

1-Tax: thuế
2-Registrate: đăng ký thuế
3-Imposea tax: ấn định thuế
4-Refund of tax: thủ tục hoàn thuế
5- Tax offset: bù trừ thuế
6-Examine: kiểm tra thuế
7-Declare: khai báo thuế
8-License tax: thuế môn bài
9-Company income tax: thuế thu nhập doanh nghiệp
10-Personal income tax: thuế thu nhập cá nhân
11-Value added tax: thuế giá trị gia tăng
12-Income tax: thuế thu nhập
13-Input sales tax: thuế giá trị gia tăng đầu vào
14-Output sales tax: thuế giá trị gia tăng đầu ra
15-Capital transfer tax: thuế chuyển nhượng vốn
16-Export/Import tax: thuế xuất, nhập khẩu
17-Registration tax: thuế trước bạ
18-Excess profits tax: thuế siêu lợi nhuận
19-Indirect tax: thuế gián thu
20-Direct tax: thuế trực thu
21-Tax rate: thuế suất
22-Tax policy: chính sách thuế
23-Tax cut: giảm thuế
24-Tax penalty: tiền phạt thuế
25-Taxable: chịu thuế
26-Tax fraud: gian lận thuế
27-Tax avoidance: trốn thuế
28-Tax evasion: sự trốn thuế
29-Tax abatement: sự khấu trừ thuế
30-E – file: hồ sơ khai thuế bằng điện tử
31-Filing of return: việc khai, nộp hồ sơ, tờ khai thuế
32-Form: mẫu đơn khai thuế
33-Assessment period: kỳ tính thuế
34-Tax computation: việc tính thuế
35-Term: kỳ hạn thuế
36-Register of tax: sổ thuế
37-Tax incentives: ưu đãi thuế
38-Tax allowance: trợ cấp thuế
39–Tax preparer: người giúp khai thuế
40-Tax year: năm tính thuế
41-Tax dispute: các tranh chấp về thuế
42-Tax liability: nghĩa vụ thuế
43-Taxpayer: người nộp thuế
44-Authorize: người ủy quyền
45-Official: chuyên viên
46-Inspector: thanh tra viên
47-Tax derectorate: tổng cục thuế
48-Director general: tổng cục trưởng
49-Tax department: cục thuế
50-Tax authorities: hội đồng thuế

Individual Taxpayers Per Capita Tax FAQ

1. What is the Per Capita Tax?
A Per Capita tax is a flat rate tax equally levied on all adult residents within a taxing
district. It is
not dependent upon employment.
2. Do I pay this tax if I rent?
Whether you rent or own, if you reside within a taxing district, you are liable to pay this
tax to the
district.
3. Is this tax withheld by my employer?
Normally, the Per Capita tax is NOT withheld by your employer.
4. How many Per Capita taxes do I have to pay?
Depending on the district you live in, the County, Township/Municipality and School
District can
each enact a Per Capita tax.
5. Can I apply for exoneration from this tax?
Exonerations from the Per Capita tax vary per each district. Click here to see if there is an
exoneration form listed for your district.
6. What if I moved out before the tax bill was issued?
If you moved out prior to the issue of the tax bill, please return the bill to our office with
documentation of your new residence (example: copy of driver’s license, utility bill, tax
notice) for
the appropriate time period.
7. What if I did not get a bill or lost my bill?
You may contact us for a duplicate tax bill. Failure to receive your tax bill does not excuse
or
delay the payment or avoid penalty, interest or charge for such a delay.
8. How can I get a receipt?
Include a self addressed stamped envelope (SASE) with your payment or mail in
separately with
your request for a receipt in writing.
UNIT 8 ACCOUNTING AND FINANCIAL STATEMENTS

PREVIEW
READING 1
Exercise 1: Choose the word that best completes the sentence.
1. B 2. C 3. B 4. C 5. D 6. B 7. B 8. C 9. B 10. D
Exercise 2: Fill in the gaps in the following passage with the words in the box.
1. recording 2. same 3. transactions 4. double 5. debit,
6. classifying 7. expense 8. summarizing 9. end 10. analysis

READING 2
Exercise 1: Match the words or phrases from a - j with their definitions from 1 – 10
1. c 2. d 3. a 4. b 5. g 6.e 7. f 8. h 9. j 10. i
Exercise 2: Choose the word that best completes the sentence.
1A, 2C , 3A , 4C , 5C , 6C , 7A , 8B , 9D , 10D
Exercise 3: Fill in the gaps in the following passage with the words in the box.
1. Balance, 2 retained, 3 information, 4 results, 5 profitability, 6 distort, 7 relationship, 8
loss, 9 equity, 10 operating

1. Accounting entry /ə’kauntiɳ ‘entri/: bút toán

2. Accrued expenses /iks’pens/—- Chi phí phải trả
3. Accumulated: lũy kế
4. Advanced payments to suppliers /sə’plaiəs/: Trả trước người bán
5. Advances to employees /,emplɔi’i:s/: Tạm ứng
6. Assets /’æsets/: Tài sản
7. Balance sheet /’bæləns ʃi:t/: Bảng cân đối kế toán
8. Book-keeper /’buk,ki:pə/: người lập báo cáo (nhân viên kế toán)
9. Capital construction /’kæpitl kən’strʌkʃn/: xây dựng cơ bản
10. Cash /kæʃ/: Tiền mặt
11. Cash at bank: Tiền gửi ngân hàng
12. Cash in hand: Tiền mặt tại quỹ
13. Cash in transit: Tiền đang chuyển
14. Check and take over: nghiệm thu
15. Construction in progress /progress/: Chi phí xây dựng cơ bản dở dang
16. Cost of goods sold: Giá vốn bán hàng
17. Current assets /’kʌrənt ‘æsets/: Tài sản lưu động và đầu tư ngắn hạn
18. Current portion of long-term liabilities: Nợ dài hạn đến hạn trả
19. Deferred expenses /iks’pens/: Chi phí chờ kết chuyển
20. Deferred revenue /’revinju:/ —- Người mua trả tiền trước
21. Depreciation of fixed assets /di,pri:ʃi’eiʃn/, /fikst/, /’æsets/: Hao mòn luỹ kế tài sản cố
định hữu hình
22. Depreciation of intangible fixed assets /di,pri:ʃi’eiʃn/, /in’tændʤəbl/: Hoa mòn luỹ kế
tài sản cố định vô hình
23. Depreciation of leased fixed assets /di,pri:ʃi’eiʃn/: Hao mòn luỹ kế tài sản cố định thuê
tài chính
24. Equity and funds /’ekwiti/, /fʌnds/: Vốn và quỹ
25. Exchange rate differences /iks’tʃeindʤ/, /reit/, /’difrəns/: Chênh lệch tỷ giá
26. Expense mandate /iks’pens ‘mændeit/: ủy nhiệm chi
27. Expenses for financial activities /iks’pens/, /fai’nænʃəl/, /æk’tivitis/: Chi phí hoạt động
tài chính
28. Extraordinary expenses /iks’trɔ:dnri/, /iks’pens/: Chi phí bất thường
29. Extraordinary income /iks’trɔ:dnri/, /’inkəm/: Thu nhập bất thường
30. Extraordinary profit /iks’trɔ:dnri/, /’inkəm/: Lợi nhuận bất thường
31. Figures in /’figəs/: millions VND: Đơn vị tính: triệu đồng
32. Financial ratios /fai’nænʃəl ‘reiʃiou/: Chỉ số tài chính
33. Financials /fai’nænʃəls/: Tài chính
34. Finished goods: Thành phẩm tồn kho
35. Fixed asset costs: Nguyên giá tài sản cố định hữu hình
36. Fixed assets: Tài sản cố định
37. General and administrative expenses /’dʤenərəl/, /əd’ministrətiv/: Chi phí quản lý
doanh nghiệp
38. Goods in transit for sale: Hàng gửi đi bán
39. Gross profit /grous/, /profit/: Lợi nhuận tổng
40. Gross revenue /grous/, /’revinju:/: Doanh thu tổng
41. Income from financial activities: Thu nhập hoạt động tài chính
42. Instruments and tools /’instrumənt/: Công cụ, dụng cụ trong kho
43. Intangible fixed asset costs /in’tændʤəbl/: Nguyên giá tài sản cố định vô hình
44. Intangible fixed assets /in’tændʤəbl/: Tài sản cố định vô hình
45. Intra-company payables /’peiəbls/: Phải trả các đơn vị nội bộ
46. Inventory /in’ventri/: Hàng tồn kho
47. Investment and development fund: Quỹ đầu tư phát triển
48. Itemize /’aitemaiz/: Mở tiểu khoản
49. Leased fixed asset costs: Nguyên giá tài sản cố định thuê tài chính
50. Leased fixed assets: Tài sản cố định thuê tài chính
51. Liabilities /,laiə’biliti/: Nợ phải trả
52. Long-term borrowings: Vay dài hạn
53. Long-term financial assets: Các khoản đầu tư tài chính dài hạn
54. Long-term liabilities /,laiə’bilitis/: Nợ dài hạn
55. Long-term mortgages /’mɔ:gidʒ/, collateral /kɔ’lætərəl/, deposits /di’pɔzit/: Các khoản thế chấp, ký
cược, ký quỹ dài hạn
56. Long-term security investments : Đầu tư chứng khoán dài hạn
57. Merchandise inventory /’mə:tʃəndaiz/, /in’ventri/: Hàng hoá tồn kho
58. Net profit: Lợi nhuận thuần
59. Net revenue /’revinju:/: Doanh thu thuần
60. Non-business expenditure source /iks’penditʃə/ : Nguồn kinh phí sự nghiệp
61. Non-business expenditures /iks’penditʃə/: Chi sự nghiệp
62. Non-current assets /’æsets/: Tài sản cố định và đầu tư dài hạn
63. Operating profit: Lợi nhuận từ hoạt động SXKD
64. Other current assets: Tài sản lưu động khác
65. Other funds: Nguồn kinh phí, quỹ khác
66. Other long-term liabilities: Nợ dài hạn khác
67. Other payables: Nợ khác
68. Other receivables /ri’si:vəbls/: Các khoản phải thu khác
69. Other short-term investments /in’vestmənts/: Đầu tư ngắn hạn khác
70. Owners’ equity: Nguồn vốn chủ sở hữu
71. Payables to employees: Phải trả công nhân viên
72. Prepaid expenses /iks’pens/: Chi phí trả trước
73. Profit before taxes: Lợi nhuận trước thuế
74. Profit from financial activities /fai’nænʃəl/, /æk’tivitis/: Lợi nhuận từ hoạt động tài chính
75. Provision for devaluation of stocks /,di:vælju’eiʃn/: Dự phòng giảm giá hàng tồn kho
76. Purchased goods in transit: Hàng mua đang đi trên đường
77. Raw materials /rɔ: mə’tiəriəl/Nguyên liệu, vật liệu tồn kho
78. Receivables /ri’si:vəbls/: Các khoản phải thu
79. Receivables from customers: Phải thu của khách hàng
80. Reconciliation /,rekəsili’eiʃn/: Đối chiếu
81. Reserve fund /ri’zə:v/, /fʌnd/: Quỹ dự trữ
82. Retained earnings: Lợi nhuận chưa phân phối
83. Revenue deductions /’revinju:/, /di’dʌkʃns/: Các khoản giảm trừ
84. Sales expenses: Chi phí bán hàng
85. Sales rebates /ri’beits/: Giảm giá bán hàng
86. Sales returns /ri’tə:n/ : Hàng bán bị trả lại
87. Short-term borrowings: Vay ngắn hạn
88. Short-term investments: Các khoản đầu tư tài chính ngắn hạn
89. Short-term liabilities: Nợ ngắn hạn
90. Short-term mortgages, collateral, deposits: Các khoản thế chấp, ký cược, ký quỹ ngắn hạn
91. Short-term security investments: Đầu tư chứng khoán ngắn hạn
92. Stockholders’ equity: Nguồn vốn kinh doanh
93. Surplus of assets awaiting resolution /’sə:pləs/: Tài sản thừa chờ xử lý
94. Tangible fixed assets /’tændʤəbl/: Tài sản cố định hữu hình
95. Taxes and other payables to the State budget /’peiəbl/, /’bʌdʤit/: Thuế và các khoản phải nộp
nhà nước
96. Total assets: Tổng cộng tài sản
97. Total liabilities and owners’ equity: Tổng cộng nguồn vốn
98. Trade creditors /’kreditəs/: Phải trả cho người bán
99. Treasury stock /’treʤəri stɔk/: Cổ phiếu quỹ
100. Welfare and reward fund /’welfe /, /ri’wɔ:d/ : Quỹ khen thưởng và phúc lợi
101. Credit Account: Tài khoản ghi Nợ
102. Debit Account /’debit/: Tài khoản ghi Có

 Capture /ˈkæp.tʃɚ/ nắm được, giành được, chiếm được

 Issue of shares /ˈɪs.juː əv ʃer/ Phát hành cổ phần
 Opening entries: Các bút toán khởi đầu doanh nghiệp
 Complexity /kəmˈpleksət̬ i/ sự phức tạp
 Business entity concept /ˈbɪz.nɪs ˈent̬ ət̬ i ˈˈkɑːnsept/ Nguyên tắc doanh nghiệp là một thực thể
 Horizontal accounts /ˌhɔːrɪˈzɑːnt̬ əl əˈkaʊnt/ Báo cáo quyết toán dạng chữ T
 Disposal of fixed assets /dɪˈspəʊzəl əv fɪkst ˈæsɪt/ Thanh lý tài sản cố định
 Working capital /ˈwərking ˈkæpɪt̬ əl/ Vốn lưu động (hoạt động)
 Money measurement concept /ˈˈmʌni ˈˈmeʒ.ə.mənt ˈkɑːnsept/ Nguyên tắc thước đo tiền tệ
 Accomplish /əˈkɑːmplɪʃ/ hoàn thành, đạt tới mục đích gì
 Carrying cost /ˈkering kɑːst/ Chi phí bảo tồn hàng lưu kho
 Process cost system /ˈprɑːses kɑːst ˈsɪs.təm/ Hệ thống hạch toán CPSX theo giai đoạn công
nghệ
 Liquidity /lɪˈkwɪdɪti/ Khả năng thanh toán bằng tiền mặt (tính lỏng/ tính thanh khoản)
 Causes of depreciation: Các nguyên do tính khấu hao
 Historical cost /hɪˈstɔːrɪkəl kɑːst/ Giá gốc
 Cash flow statement /kæʃ floʊ ˈsteɪt.mənt/ Bảng phân tích lưu chuyển tiền mặt
 Commission errors /kəˈmɪʃ.ən ˈer.ɚ/ Lỗi ghi nhầm tài khoản thanh toán
 Output in equivalent units /ˈaʊt.pʊt in ɪˈkwɪv.əl.ənt ˈjuː.nɪt/ Lượng sản phẩm tính theo đơn vị
tương đương
  Oversubscription of shares : Đăng ký cổ phần vượt mức
 Straight line method/streɪt laɪn ˈmeθ.əd/ Phương pháp đường thẳng
 Process cost system /ˈprɑː.ses kɑːst ˈsɪs.təm/ Hệ thống hạch toán CPSX theo giai đoạn công
nghệ
 Compensating errors /ˈkɑːm.pən.seɪting ˈer.ɚ/ Lỗi tự triệt tiêu
 Intangible assets /ɪnˈtæn.dʒɪ.bl̩ ˈæsɪt/ Tài sản vô hình
 Noncumulative preference share /non-ˈkjuː.mjʊ.lət̬ ɪv ˈpref.ər.əns ʃer/ Cổ phần ưu đãi không
tích lũy
 Imprest systems/ˈɪmprest ˈsɪs.təm/ Chế độ tạm ứng
 Direct costs /dɪˈrekt kɑːst/ Chi phí trực tiếp
 Reducing balance method /rɪˈduːs ˈbæl.əns ˈmeθ.əd/ Phương pháp giảm dần
 Conversion costs /kənˈvɜː.ʃən kɑːst/ Chi phí chế biến
 Debit note /ˈdeb.ɪt noʊt/ Giấy báo nợ
 Cost object /kɑːst ˈɑːb.dʒɪkt/ Đối tượng tính giá thành
 Appropriation of profit /əˌproʊ.priˈeɪ.ʃən əv ˈprɑː.fɪt/ Phân phối lợi nhuận
 Consistency /kənˈsɪs.tən.si/ Nguyên tắc nhất quán
 Provision discounts /prəˈvɪʒ.ən fɔːr ˈdɪs.kaʊnt/ Dự phòng chiết khấu

II. Các công thức trong tiếng anh kế toán:

1. Cost of goods sold/ cost of sales ( Giá vốn hàng bán ) = Opening Inventory + Purchase
– Closing Inventory ( áp dụng đối với doanh nghiệp thương mại là chủ yếu)
2. Mark-up profit rate = Sales – cost of goods sold)/ Cost of goods sold
3. Income tax expense = Income tax rate x PBIT
4. Profit after tax = PBIT – Income tax expense
5. Gross profit = Sales – cost of goods sold
6. Margin profit rate = Sales – cost of goods sold)/ Sales
7. Purchase = Closing Trade Payable – Opening Trade Receivable + Received Discount +
Cash paid to supplier + Contra between trade receivable and trade payable = số dư nợ
phải trả cuối kỳ – số dư nợ phải trả đầu kỳ + các khoản chiết khấu nhận được + Các khoản
tiền nợ trả cho nhà cung cấp + bù trừ giữa nợ phải thu và nợ phải trả.
8. Carrying amount = Cost – accumulated depreciation = giá trị còn lại = tổng – khấu hao lũy
kế
9. Annual depreciation = Cost of assets – residual value (giá trị thanh lý thu hồi) / The
amount of years of use life.
10. Cost of manufactured = Opening Work in progress + Sum of production cost – Closing
Work in progress

III. Các ký hiệu viết tắt trong tiếng anh kế toán:

1. GAAP: Generally Accepted Accounting Principles

2. IAS: International Accounting Standards
3. IFRS: International Financial Reporting Standards
4. IASC: International Accounting Standards Committee
 5. EBIT: earning before interest and tax
6. EBITDA: earnings before interest, tax, depreciation and amortization
7. COGS: cost of goods sold
8. FIFO (First In First Out): Phương pháp nhập trước xuất trước
9. LIFO (Last In First Out): Phương pháp nhập sau xuất trước

UNIT 9 FINANCIAL ANALYSIS

PREVIEW

READING 1
ANSWERS
1. Financial analysis is the selection, evaluation, and interpretation of financial
data, along with other pertinent information, to assist in investment and
financial decision-making.
2. Financial analysis is used internally to evaluate issues such as employee
performance, the efficiency of operations, and credit policies, and externally
to evaluate potential investments and the credit-worthiness of borrowers,
among other things.
3. They are financial statement data, market data, economic data. The primary
source (financial statement data) is the data provided by the company in its
annual reports and required disclosures. Second source (market data) such as
the market prices of securities is found in the financial press and the
electronic media daily. Another source is economic data such as GDP or CPI
that is readily available from government and private sources.
4. A ratio is a mathematical relation between one quantity and another.
5. A financial ratio is a comparison between one bit of financial information and
another.
6. By construction, ratios can be classified as a coverage ratio, a return ratio, a
turnover ratio, or a component percentage.
7. According to general characteristics, ratios can be classified as a liquidity
ratio, a profitability ratio, an activity ratio, a financial leverage ratio, a
shareholder ratio, and a return on investment ratio.
EXERCISES
MATCHING
ANSWERS
1. Current liabilities 2. Prospects 3. Annual report
4. Credit policy 5. Data 6. Leverage
7. Liquidity 8. Current assets 9. Profitability
10. publicly-traded corporations 11. Credit-worthiness 12. Price index
13. GDP 14. Market price 15. Acquire
GAP-FILLING

ANSWERS
1. Decisions 2. Numerical 3. Analysis
4. Sustaining 5. Ratios 6. Current liabilities
7. Quantitative 8. Profitability 9. Generation
10. Management
SUMMARY
Four important areas of a company’s business including liquidity, capital structure,
activities and efficiency, and profitability are commonly analyzed by applying ratios.
Firstly, for measurement of liquidity, two ratios – the current ratio and quick ratio are
normally used. Secondly, the gearing of the company and income gearing are important
ratios for evaluating the company’s capital structure. Thirdly, average collection period on
debts and inventory turnover ratios are applied to assess the company’s efficiency. Finally,
the profit margin, return on capital employed and return on owner’s equity are ratios used
to indicate the company’s profitability.
Task 3: Translate into Vietnamese
ANSWER
The inventory turnover ratio is a useful measure to evaluate if there is any inventory or
not, indicating that a company has a difficulty in selling its products. This ratio is
calculated as cost of goods sold divided by the average inventory balance over a year.
Sometimes, analysts use annual revenues instead of cost of goods sold for calculation
purposes. From 2009 to 2017, Nissan’s turnover ratio ranged from 13.2 in 2009 to 19.18
in 2013 and the average ratio was 15.7. From 2013 to 2017, the inventory turnover ratio
was slightly trending down and was 16.2 in 2017. By industry standards, Nissan’s
inventory turnover is much higher than its closest competitors. In 2017, Toyota’s
inventory turnover ratio was 10.83, while General Motors had inventory turnover ratio of
20.27.
ENGLISH – VIETNAMESE TRANSLATION
Ratio analysis is a tool for evaluating financial statements but also relies on the numbers in
the reported financial statements to be used as ratios for comparison over time or across
companies. Financial statements are used as a way to discover the financial position and
financial results of a business. With a few exceptions, such as ratios involving stock price,
the majority of the data used in ratio analysis comes from the financial statements.

Prior to the calculation of financial ratios, reported financial statements are often adjusted
by analysts to make the financial ratios more meaningful as comparisons across time or
across companies. In terms of adjustment of financial statements, analysts may adjust
earnings numbers up or down when they suspect the reported data is inaccurate due to
issues like earnings management.

The evaluation of a company’s financial statement analysis is a form of fundamental

analysis that is bottoms up. While analysis of a company’s prospects can include a number
of factors, including understanding the economic situation or the industry or sentiment
about the company or its products, ratio analysis of a company relies on the specific
company financials.

READING
FINANCIAL ANALYSIS
1. Financial analysis
Financial analysis is the selection, evaluation, and interpretation of financial data,
along with other pertinent information, to assist in investment and financial
decision-making. Financial analysis may be used internally to evaluate issues such
as employee performance, the efficiency of operations, and credit policies, and
externally to evaluate potential investments and the credit-worthiness of borrowers,
among other things.
The analyst draws the financial data needed in financial analysis from many
sources. The primary source is the data provided by the company itself in its annual
reports and required disclosures. The annual report comprises the income statement,
the balance sheet, and the statement of cash flows, as well as footnotes to these
statements. Certain business are required by securities laws to disclose additional
information.
Besides information that companies are required to disclose through financial
statements, other information is readily available for financial analysis. For
example, information such as the market prices of securities of publicly-traded
corporations can be found in the financial press and the electronic media daily.
Similarly, information on stock price indices for industries and for the market as a
whole is available in the financial press.
Another source of information is economic data, such as the Gross Domestic
Product and Consumer Price Index, which may be useful in assessing the recent
performance or future prospects of a company or industry. Suppose you are
evaluating a company that owns a chain of retail outlets. What information do you
need to judge the company’s performance and financial condition? You need
financial data, but it does not tell the whole story. You also need information on
consumer spending, producer prices, consumer prices, and the competition. This
economic data that is readily available from government and private sources.
Besides financial statement data, market data, and economic data, in financial
analysis you also need to examine events that may help explain the company’s
present condition and may have a bearing on its future prospects. For example, did
the company recently incur some extraordinary losses? Is the company developing a
new product? Or acquiring another company? Is the company regulated? Current
events can provide information that may be incorporated in financial analysis.
The financial analyst must select the pertinent information, analyze it, and interpret
the analysis, enabling judgments on the current and future financial condition and
operating performance of the company.
2. Classification of financial ratios
In financial analysis, a broad category of ratios are used. A ratio is a mathematical
relation between one quantity and another. Suppose you have 200 apples and 100
oranges. The ratio of apples to oranges is 200/100, which we can more conveniently
express as 2:1 or 2. A financial ratio is a comparison between one bit of financial
information and another. Consider the ratio of current assets to current liabilities,
which we refer to as the current ratio. This ratio is a comparison between assets that
can be readily turned into cash – current assets – and the obligations that are due in
the near future – current liabilities. A current ratio of 2:1 or 2 means that we have
twice as much in current assets as we need to satisfy obligations due in the near
future.
Ratios can be classified according to the way they are constructed and their general
characteristics. By construction, ratios can be classified as a coverage ratio, a return
ratio, a turnover ratio, or a component percentage.
 A coverage ratio is a measure of a company’s ability to satisfy particular
obligations.
 A return ratio is a measure of the net benefit, relative to the resources
expended.
 A turnover ratio is a measure of the gross benefit, relative to the resources
expended.
 A company percentage is the ratio of a component of an item to the item.
When we assess a company’s operating performance, we want to know if it is
applying its assets in an efficient and profitable manner. When we assess a
company’s financial condition, we want to know if it is able to meet its financial
obligations.
There are six aspects of operating performance and financial condition we can
evaluate from financial ratios:
 A liquidity ratio provides information on a company’s ability to meet its
short-term, immediate obligations
 A profitability ratio provides information on the amount of income from each
dollar of sales.
 An activity ratio relates information on a company’s ability to manage its
resources (that is, its assets) efficiently.
 A financial leverage ratio provides information on the degree of a company’s
fixed financing obligations and its ability to satisfy these financing
obligations.
 A shareholder ratio describes the company’s financial condition in terms of
amounts per share of stock.
  A return on investment ratio provides information on the amount of profit,
relative to the assets employed to produce that profit.

COMPREHENSION QUESTIONS
1. What is financial analysis?
2. For what purpose is financial analysis used?
3. What are sources of data available for financial analysis?
4. What is a ratio?
5. What is a financial ratio?
6. By construction, what can financial ratios be classified into?
7. According to general characteristics, what can financial ratios be classified
into?
ANSWERS
8. Financial analysis is the selection, evaluation, and interpretation of financial
data, along with other pertinent information, to assist in investment and
financial decision-making.
9. Financial analysis is used internally to evaluate issues such as employee
performance, the efficiency of operations, and credit policies, and externally
to evaluate potential investments and the credit-worthiness of borrowers,
among other things.
10.They are financial statement data, market data, economic data. The primary
source (financial statement data) is the data provided by the company in its
annual reports and required disclosures. Second source (market data) such as
the market prices of securities is found in the financial press and the
electronic media daily. Another source is economic data such as GDP or CPI
that is readily available from government and private sources.
11.A ratio is a mathematical relation between one quantity and another.
12.A financial ratio is a comparison between one bit of financial information and
another.
 13.By construction, ratios can be classified as a coverage ratio, a return ratio, a
turnover ratio, or a component percentage.
14.According to general characteristics, ratios can be classified as a liquidity
ratio, a profitability ratio, an activity ratio, a financial leverage ratio, a
shareholder ratio, and a return on investment ratio.

EXERCISES
MATCHING
GDP Market price Current assets

Data Profitability Annual reports

Liquidity Leverage Credit policy

Acquire Price index Current liabilities

Prospects Credit-worthiness Publicly-traded corporations

1. Debts that must be paid within a year or during the current business cycle
2. The chances of being sucessful in the future
3. A financial report that a company must by law present each year to its
shareholders
4. The decisions a business has made about the way it will lend money or give
credit
5. Facts or information, especially when examined and used to find out things or to
make decisions.
6. The amount of loan capital that a company has in relation to its share capital
7. The state of owning cash or things of value that can easily be exchanged for cash
in order to pay debts
8. Assets that a company holds for a short period of time, including cash or
something that can easily provide cash, such as products to be sold....
9. The ability of a business to produce a return on an investment based on its
resources
10. Corporations offers their securities such as stocks or bonds for sale to the
general public
11. The reputation that a person or organization has for paying their debts
12. A figure that shows the change in the price of something over a period of time
13. The total final outputs of goods and services produced within an economy for
any given year by both residents and non residents
14. The price that a product or service will currently sell for.
15. To buy a company or to buy shares in a company
ANSWERS
1. Current liabilities 2. Prospects 3. Annual report
4. Credit policy 5. Data 6. Leverage
7. Liquidity 8. Current assets 9. Profitability
10. publicly-traded corporations 11. Credit-worthiness 12. Price index
13. GDP 14. Market price 15. Acquire
GAP-FILLING
profit generation sustaining qualitative management
analysis decision ratios profitability current liabilities
quantitative numerical research figure outstanding

1. Financial analysis can be applied in a wide variety of situations to give business

managers the information they need to make critical .......................
2. Financial analysis also involves using the ............................. data contained in a
company’s statements.
3. When looking at a specific company, a financial analyst
conducts .......................... by focusing on the income statement, the balance sheet
and cash flow statement.
4. The process of financial analysis provides the information about the ability of a
business entity to earn income while ......................... both short-term and long-term
growth.
5. One of the most common ways to analyze financial data is to
calculate ............................. from the data to compare against those of other
companies or against the company’s own historical performance.
6. If a company has to sell off fixed assets to pay for its ................................, this
usually means that the company isn’t making enough profits to support its
operations.
7. Ratio analysis is a tool that was developed to perform ............................ analysis
on numbers found on financial statements.
8. Return on assets is a common ratio used to determine how efficient a company is
at using its assets and as a measure of .................................
9. Because the difference between cash ............................. and cash payments,
businesses should maintain a certain ratio of current assets to current liabilities in
order to ensure adequate liquidity.
10. In mature companies, low levels of liquidity can indicate poor ............................
or a need for additional capital.

ANSWERS
1. Decisions 2. Numerical 3. Analysis
4. Sustaining 5. Ratios 6. Current liabilities
7. Quantitative 8. Profitability 9. Generation
10. Management

WRITTING
There are four critical areas of a company’s business which can be analyzed by
applying ratio. These are liquidity, capital structure, activity and efficiency, and
profitability.
Measurements of liquidity should answer the question: Can a company pay its
short-term debts? There are two ratios commonly used to answer this question.
Firsly, the current ratio, which measures the current against the current liabilities. In
most cases, a healthy company would show a ratio above 1, in other words more
current assets than current liabilities. Another method of measuring liquidity is the
so-called quick ratio – this is particularly appropriate in manufacturing industries
where stock levels can disguise the company’s true liquidity. The ratio is calsulated
in the same way as above but the stocks are deducted from the current assets.
The balance sheet will also reveal the gearing of the company – this is an indicator
of the company’s capital structure and its ability to meet its long-term debts. The
ratio expresses the relationship between shareholder’s funds and loan capital.
Income gearing is also important and shows the ratio between profit and interest
paid on borrowings. Relatively high borrowings would indicate vulnerability to an
interest rate rise. Highly geared companies generally represent a greater risk for
investors.
The balance sheet and the profit and loss account can be used to assesss how
efficiently a company manages its assets. Basically, sales are compared with
investment in various assets. For example, in the retail sector, an important ratio
which indicates efficiency is sales divided by stock – the resulting figure should be
much higher than in manufacturing factor where stock tends to show a much slower
turnover. Another example of efficiency measurement is to calculate the average
collection period on debts. This is found by dividing debtors by sales per day. This
can vary tremendous from industry to industry. In the retail sector, it may well be as
low as one or two days, whereas in the heavy manufacturing and service sectors it
can range from thirty to ninety days.
Finally, profitability ratios show the manager’s use of the company’s resources. The
profit margin figure (profit before tax divided by sales and expressed as a
percentage) indicates the operational day-to-day profitability of the business. Return
on capital employed can be calculated in a number of ways. One common method is
to take profit before taxes and divided by the total assets – this is a good indicator of
the use of all the assets of the company. From a shareholder’s point of view, the
return on owner’s equity will be an important ratio; this is calculated by dividing the
profit before taxes by the owner’s equity and expressing it as a percentage. If the
company does not earn a reasonable return, the share price will fall and thus make it
difficult to attract additonal capital.

SUMMARY
Four important areas of a company’s business including liquidity, capital structure,
activities and efficiency, and profitability are commonly analyzed by applying
ratios. Firstly, for measurement of liquidity, two ratios – the current ratio and quick
ratio are normally used. Secondly, the gearing of the company and income gearing
are important ratios for evaluating the company’s capital structure. Thirdly, average
collection period on debts and inventory turnover ratios are applied to assess the
company’s efficiency. Finally, the profit margin, return on capital employed and
return on owner’s equity are ratios used to indicate the company’s profitability.
VIETNAMESE – ENGLISH TRANSLATION
Tỷ lệ doanh thu hàng tồn kho là thước đo hữu ích để đánh giá liệu có tồn kho hay
không, cho thấy rằng một công ty gặp khó khăn khi bán sản phẩm của mình.Tỷ lệ
này được tính là chi phí bán hàng chia cho số dư hàng tồn kho trung bình trong một
năm. Đôi khi, các nhà phân tích sử dụng doanh thu hàng năm thay vì chi phí bán
hàng cho mục đích tính toán. Từ năm 2009 đến năm 2017, tỷ lệ doanh thu của
Nissan dao động trong khoảng từ 13,2 năm 2009 đến 19,18 năm 2013 và tỷ lệ trung
bình là 15,7. Từ năm 2013 đến năm 2017, tỷ lệ doanh thu hàng tồn kho đã giảm nhẹ
và đạt 16,2 năm 2017. Theo tiêu chuẩn ngành công nghiệp, doanh thu hàng tồn kho
của Nissan cao hơn nhiều so với các đối thủ gần nhất. Năm 2017, tỷ lệ doanh thu
hàng tồn kho của Toyota là 10.83, trong khi General Motors có tỷ lệ doanh thu hàng
tồn kho là 10. 27.

ANSWER
The inventory turnover ratio is a useful measure to evaluate if there is any inventory
or not, indicating that a company has a difficulty in selling its products. This ratio is
calculated as cost of goods sold divided by the average inventory balance over a
year. Sometimes, analysts use annual revenues instead of cost of goods sold for
calculation purposes. From 2009 to 2017, Nissan’s turnover ratio ranged from 13.2
in 2009 to 19.18 in 2013 and the average ratio was 15.7. From 2013 to 2017, the
inventory turnover ratio was slightly trending down and was 16.2 in 2017. By
industry standards, Nissan’s inventory turnover is much higher than its closest
competitors. In 2017, Toyota’s inventory turnover ratio was 10.83, while General
Motors had inventory turnover ratio of 20.27.

ENGLISH – VIETNAMESE TRANSLATION

Ratio analysis is a tool for evaluating financial statements but also relies on the
numbers in the reported financial statements to be used as ratios for comparison
over time or across companies. Financial statements are used as a way to discover
the financial position and financial results of a business. With a few exceptions,
such as ratios involving stock price, the majority of the data used in ratio analysis
comes from the financial statements.

Prior to the calculation of financial ratios, reported financial statements are often
adjusted by analysts to make the financial ratios more meaningful as comparisons
across time or across companies. In terms of adjustment of financial statements,
analysts may adjust earnings numbers up or down when they suspect the reported
data is inaccurate due to issues like earnings management.

The evaluation of a company’s financial statement analysis is a form of

fundamental analysis that is bottoms up. While analysis of a company’s prospects
can include a number of factors, including understanding the economic situation or
the industry or sentiment about the company or its products, ratio analysis of a
company relies on the specific company financials.

ANSWER

Phân tích tỷ lệ là một công cụ để đánh giá báo cáo tài chính nhưng cũng dựa trên
các con số trong báo cáo tài chính được công bố được sử dụng làm tỷ lệ so sánh
theo thời gian hoặc giữa các công ty. Báo cáo tài chính được sử dụng như một cách
để biết được tình hình tài chính và kết quả tài chính của một doanh nghiệp. Trừ một
vài ngoại lệ, chẳng hạn như tỷ lệ liên quan đến giá cổ phiếu, phần lớn dữ liệu được
sử dụng trong phân tích tỷ lệ đến từ báo cáo tài chính.

Trước khi tính toán các tỷ lệ tài chính, báo cáo tài chính được công bố thường được
các nhà phân tích điều chỉnh để làm cho các tỷ lệ tài chính phù hợp hơn khi so sánh
theo thời gian hoặc giữa các công ty. Về mặt đánh giá các báo cáo tài chính, các nhà
phân tích có thể điều chỉnh số thu nhập tăng hoặc giảm khi họ nghi ngờ dữ liệu
được báo cáo không chính xác do các vấn đề như quản lý thu nhập.

Việc đánh giá phân tích báo cáo tài chính của một công ty là một dạng phân tích cơ
bản từ chi tiết đến tổng thể. Trong khi phân tích triển vọng của một công ty có thể
bao gồm một số yếu tố, bao gồm hiểu biết tình hình kinh tế hoặc ngành công nghiệp
hoặc cảm nhận về công ty hoặc sản phẩm của công ty, phân tích tỷ lệ của một công
ty dựa vào kết quả tài chính của công ty cụ thể.

UNIT 10: INTERNATIONAL BUSINESS

READING COMPREHENSION
1. It provides economic development.
2. Transportation, marketing, distributing
3. Labor pool, climate, natural resources, location
4. Absolute advantage of Smith vs. comparative advantage of Ricardo.
5. They receive money for selling exports.
6. It would damage local industry.
7. To provide jobs, to control the market for that product.
8. Quotas and tariffs.
9. Tariffs raise revenue.
10.Tariffs increase cost, quotas restrict supply.
11. Value would tend to increase.
12.The currency would become weaker because more of it would be flooding
foreign markets.
13.To save transportation costs.
14.A large company that owns smaller companies.
15.To develop its economy; to provide employment for its population, to lower
balance of trade deficit.
VOCABULARY EXERCISES
1>
A. 21 B. 18 C. 22 D. 5 E. 1 F. 3 G. 20 H. 2 I. 6 J. 12 K. 14 L. 9
M. 10 N. 4 O. 8 P. 16 Q. 7 R. 15 S. 17 T. 19 U. 11 V. 13 W. 23 X. 24
2>
1C 2D 3B 4D 5D 6C 7A 8D 9D 10 B

CIF vs. FOB: An Overview

Cost, Insurance, and Freight (CIF) and Free on Board (FOB) are international
shipping agreements used in the transportation of goods between a buyer and a
seller. They are among the most common of the 12 international commerce terms
(Incoterms) established by the International Chamber of Commerce (ICC) in 1936.
The specific definitions vary somewhat in every country, but, in general, both
contracts specify origin and destination information that is used to determine where
liability officially begins and ends, and outline the responsibilities of buyers to
sellers, as well as sellers to buyers.

Cost, Insurance and Freight vs. Free on Board

Melissa Ling {Copyright} Investopedia, 2019.
CIF
CIF is considered a more expensive option when buying goods. This is because the
seller uses a forwarder of his or her choice who may charge the buyer more in order
to increase the profit on the transaction. Communication can also be an issue
because the buyer relies solely on people who are acting on behalf of the seller. The
buyer might still have to pay additional fees at the port, such as docking fees and
customs clearance fees before the goods are cleared.

FOB
FOB contracts relieve the seller of responsibility once the goods are shipped. After
the goods have been loaded—technically, "passed the ship's rail,"—they are
considered to be delivered into the control of the buyer. When the voyage begins,
the buyer then assumes all liability. The buyer can, therefore, negotiate a cheaper
price for the freight and insurance with a forwarder of his or her choice. In fact,
some international traders seek to maximize their profits by buying FOB and selling
CIF.
Key Differences
CIF and FOB mainly differ in who assumes responsibility for the goods during
transit. In CIF agreements, insurance and other costs are assumed by the seller, with
liability and costs associated with successful transit paid by the seller up until the
goods are received by the buyer. The responsibilities of the seller include
transporting the goods to the nearest port, loading them on a vessel and paying for
the insurance and freight.
In some agreements, goods are not considered to be delivered until they are actually
in the buyer's possession; in others, the goods are considered delivered—and are the
buyer's responsibility—once they reach the port of destination.
Each agreement has particular advantages and drawbacks for both parties. While
sellers often prefer FOB and buyers prefer CIF, some trade agreements find one
method more convenient for both parties. A seller with expertise in local customs
that the buyer lacks would likely assume CIF responsibility to encourage the buyer
to accept a deal, for example. Smaller companies may prefer the larger party to
assume liability, as this can result in lower costs. Some companies also have special
access through customs, document freight charges when calculating taxation, and
other needs that necessitate a particular shipping agreement.

KEY TAKEAWAYS
Cost, Insurance and Freight and Free on Board are international shipping
agreements used in the transportation of goods between a buyer and a seller.
CIF is considered a more expensive option when buying goods.
FOB contracts relieve the seller of responsibility once the goods are shipped.

READING 2
1. They believe in the comparative cost principle, which proposes that all nations will
raise their living standards and real income if they specialize in the production of those
goods and services in which they have the highest relative productivity.
2. because of factors of production (notably raw materials), climate, division of labor,
economies of scale, and so forth.
3. * to make imports more expensive than home-produced substitutes, and thereby reduce
a balance of payments deficit;
* as a protection against dumping (the selling of goods abroad at below cost price in
order to destroy or weaken competitors or to earn foreign currency to pay for necessary
imports);
* to retaliate against restrictions imposed by other countries;
* to protect “infant industries” until they are large enough to achieve economies of scale
and strong enough to compete internationally.
4. With tariffs, it is impossible to know the quantity that will be imported, because prices
might be elastic. With quotas, governments can set a limit on imports. Yet unlike tariffs,
quotas provide no revenue for the government.
5. Encouraging international trade, of making tariffs the only form of protectionism, and
of reducing these as much as possible.
6. They wanted to industrialize in order to counteract what they rightly saw as an
inevitable fall in commodity prices. They practiced import substitution (producing and
protecting goods that cost more than those made abroad), and imposed high tariff
barriers to protect their infant industries.
7. They are aware of the export successes of the East Asian “Tiger” economies (Hong
Long, Singapore, South Korea and Taiwan), and of the collapse of the Soviet economic
model. They were afraid of being excluded from the world trading system by the
development of trading blocks such as the European Union, finalized by the Maastricht
Treaty, and the North American Free Trade Agreement (NAFTA).
8. to liberalize their economies, lowering trade barriers and opening up to international
trade.
MATCHING
autarky balance of payments
balance of trade deficit
barter or counter-trade dumping
protectionism tariffs
invisible imports and exports quotas
visible trade (GB) or merchandise trade (US) surplus
1. trade in goods
2. trade in services (banking, insurance, tourism, and so on)
3. direct exchanges of goods, without the use of money
4. the difference between what a country receives and pays for its exports and imports of
goods
5. the difference between a country's total earnings from exports and its total expenditure
on imports
6. the (impossible) situation in which a country is completely self-sufficient has no foreign
trade
7. a positive balance of trade or payments
8. a negative balance of trade or payments
9. selling goods abroad at (or below) cost price
10. imposing trade barriers in order to restrict imports
11. taxes charged on imports
12. quantitative limits on the import of particular products or commodities
1. visible trade (GB) or merchandise trade (US) 2. invisible imports and exports
3. barter or counter-trade 4. balance of trade
5. balance of payments 6. autarky
7. surplus 8. deficit
9. dumping 10. protectionism
11. tariffs 12. quotas
GAP-FILLING
balance of trade commodities division of labor
climate factors of production imports
economies of scale quotas nations
protectionism barter taxes
(1)……………..... import some goods and services from abroad, and export others to the
rest of the world. Trade in (2) ……………….. is called visible trade in Britain and
merchandise trade in US. Services, such as banking, insurance, tourism, and technical
expertise, are invisible imports and exports. A country can have a surplus or a deficit in its
(3)……………….., and in its difference between total earnings from all exports and total
expenditure on all (4) …………… . Most countries have to pay their deficits with foreign
currencies from their reserves, although of course the USA can usually pay in dollars the
unofficial world trading currency. Countries without currency reserves can attempt to do
international trade by way of (5) ………………. (direct exchanges of goods without the
use of money). The imaginary situation in which country is completely self-sufficient and
has no foreign trade is called autarky.
The General Agreement on Tariff and Trade (GATT), concluded in 1994, aim to
maximize international trade and to minimize (6) ………………. . GATT is based on the
comparative cost principle, which is that all nations will raise their income if they
specialize in producing the commodities in which they have the highest relative
productivity. Countries may have an absolute or a comparative advantage in producing
particular goods or services, because of (7) ……………….. (raw materials,cheap or
skilled labour, capital, etc.), weather conditions, (8) ………………. (specialization of
work into different job), (9) ……….……… (savings in unit costs arising from large-scale
production), and so forth. Yet most governments still pursue protectionist polices,
establishing trade barriers such as tariffs charged on imports, (12) ………….. (restrictions
on the quantity of imports), administrative difficulty, and so on.
1. Nations 2. commodities 3. balance of trade 4. imports
5. barter 6. protectionism 7. factors of production 8. division of labor
9. economies of scale 10. quotas
WRITING:
Write a summary for the following text
Most countries realize the advantages of world trade. Countries have developed
their economies increased production of goods and met market demands through increased
world trade. The interdependence among trading nations has provided increased business
opportunities.
International trade develops because certain countries are able to produce some
goods more efficiently than other countries. They exchange goods to satisfy their needs
and wants. Efficient production may be the result of several factors. A certain climate in a
particular country may allow that country to grow agricultural products in abundance. For
example, the climates in the US and Canada are suitable for production of large amounts
of wheat. Natural resources such as oil or coal are abundant in other countries. Another
factor is geographical location. Countries like Singapore and Panama engage in banking
and trading because they are located on world trade routes.
The Scottish economist, Adam Smith, theorized that in free market countries
produce whatever they can most efficiently grow or manufacture, or what is of the greatest
advantage to them. It means if they can make more money growing cotton than making
cloth, they grow cotton and export it. Then they import cloth from a country that makes
cloth more efficiently than it grows cotton. In an uncontrolled free market trade situation,
there is international specialization which results in the most efficient production of goods.
It was a theory of absolute advantage. English economist, David Ricardo, refined Smiths
theory to one of comparative advantage. He theorized that an exporting country does not
have to be a most efficient producer of the product; it only has to be more efficient than
the country which imports the product.
There are several reasons why governments try to control the imports and exports
of a country. One reason is that a country enjoys an advantage if it exports more than it
imports. Wealth accrues to the exporting country. Some countries have special programs
to encourage exports. They may be programs that provide marketing information,
establish trade mission, subsidize r exports, and provide tax benefits or incentives.
Government subsidies allow companies to sell products cheaply. Sometimes these
subsidized companies export their products and sell them cheaply overseas. This practice
is known as dumping. Dumping is selling on a foreign market at a price below the cost of
production.
On the other hand, governments impose taxes and quotas to restrict imports of
certain products. For example, to protect Japanese farmers, Japan limits the amount of
produce than can be imported. Sometimes governments want to protect a domestic
industry because that industry provides employment for the population. Not only the
industries, but also the labor unions encourage the government to enact protectionist
controls.
The comparative advantage which exporting countries enjoy sometimes changes. If
transportation costs increase or currency exchange rates change, it may become cheaper to
produce the product in the market country, especially if large amounts are involved.
Exporting companies sometimes set up subsidiaries in the market countries. The large
company is referred to as the parent company . some countries have laws restricting the
foreign ownership of factories or other production facilities, while others encourage
foreign investment. A large company that sets up production facilities in several different
countries is referred to as a that sets up production facilities in several different countries
is referred to as a multinational. Multinational corporations develop a global philosophy of
management, marketing and production, they choose to operate in those countries that
afford them comparative advantages.
VIETNAMESE – ENGLISH TRANSLATION
Rào cản thương mại phổ biến nhất là thuế quan - thuế đánh vào hàng hóa nhập khẩu. Thuế
quan làm tăng giá hàng hóa nhập khẩu so sánh với hàng hóa nội địa (hàng hóa được sản
xuất trong nước).
Một rào cản phổ biến khác đối với thương mại là trợ cấp của chính phủ đối với một ngành
sản xuất cụ thể trong nước. Trợ cấp khiến cho những hàng hóa này rẻ hơn khi sản xuất ở
trong nước so với ở thị trường nước ngoài. Điều này dẫn đến giá trong nước thấp hơn. Cả
thuế quan và trợ giá đều tăng giá của hàng hóa nước ngoài so với hàng hóa trong nước,
điều này làm giảm nhập khẩu.
Vẫn còn một rào cản khác đối với thương mại là một lệnh cấm vận - một phong tỏa hoặc
thỏa thuận chính trị nhằm hạn chế khả năng xuất khẩu hoặc nhập khẩu của một quốc gia
nước ngoài.
Các rào cản đối với thương mại thường được gọi là “bảo hộ” vì mục đích được chỉ rõ của
chúng là bảo vệ hoặc thúc đẩy các ngành hoặc phân đoạn cụ thể của một nền kinh tế. Từ
góc độ kinh tế, mặc dù, chi phí cho nền kinh tế hầu như luôn luôn lớn hơn những lợi ích
được hưởng bởi những người được bảo vệ.

The most common barrier to trade is a tariff—a tax imposed on imports. Tariffs raise the
price of imported goods relative to domestic goods (goods produced at home).
Another common barrier to trade is a government subsidy to a particular domestic
industry. Subsidies make those goods cheaper to produce than in foreign markets. This
results in a lower domestic price. Both tariffs and subsidies raise the price of foreign
goods relative to domestic goods, which reduces imports.
Yet another barrier to trade is an embargo—a blockade or political agreement that limits
a foreign country’s ability to export or import.
Barriers to trade are often called “protection” because their stated purpose is to shield or
advance particular industries or segments of an economy. From an economic perspective,
though, the costs to the economy almost always outweigh the benefits enjoyed by those
who are protected.
ENGLISH – VIETNAMESE TRANSLATION

One way of financing international trade is by a letter of credit. The foreign buyer
transfers money from its bank to a correspondent bank in the exporter’s country. This
bank then informs the exporter that a letter of credit for a a sum of money is available
when it presents a bill of lading (a document prepared by the ship-owner or his agent
which acknowledges that the goods have been received on board the ship), a commercial
invoice, and an insurance certificate.
 Another possibility is to pay by a bill of exchange, as in the following example of the
export of a shipment of goods from Britain to Argentina. On receiving an order from
Argentina, a British manufacturer produces the goods. After arranging insurance,
manufacturer will send the goods to the port, with an invoice and a bill of lading, to be
loaded onto a ship. When the goods have been shipped on board, the ship’s master signs
and return the bill of lading to the producer.

The exporter will draw up a bill of exchange requiring the buyer to pay a certain sum of
money on an agreed date, and present the bill to a London correspondent bank of the
buyer’s bank. The London bank accepts a bill of exchange for the same amount. It will
then send the bill of lading and the bill of exchange to Argentina.

Meanwhile, the British manufacturer can sell the bill of exchange (at a discount) to an
accepting house in London, so that it does not have to wait for payment. When the
documents arrive in Argentine, they will be given to the importing company when it
accepts to original bill of exchange.

When the ship reaches its destination, the importer presents the documents to the
master of the ship, and collect the goods. (If the goods do not arrive, the buyer will have to
make an insurance claim.). On the agreed date, the importer honors the bill of exchange.