English Reader. Мишустина В.Д. - 40 стр.

      Текст
      Any enterprise from a major multinational corporation to a coconut juice stand
in the South Pacific needs a summary of everything the company has earned and
spent over a given period of time. This overview of a company's day-to-day activities
is called an income statement or a profit and loss statement (P&L).
      A company making and selling coconut juice on a South Pacific beach would
start its P&L with a summary of all revenues from selling its product. To determine
its profit, the company needs to subtract its expenses from its revenues. First, it would
subtract the costs incurred in producing the juice, called "cost of goods sold".
Expenses such as salaries or maintenance of assets would also have to be accounted
for. Other expenses, such as interest on loans, would then have to be deducted.
      Finally, depreciation, the decline in value of fixed assets, such as machinery and
tools, would have to be deducted from earnings. Depreciation causes numerous
accounting nightmares because there is no way to determine how much a fixed asset
really declines in value over time. Many companies take advantage of this uncertainty
to show as much "loss" as possible as soon as possible, reducing earnings in order to
pay less tax in the early years of the asset's life. By delaying tax payments, companies
can earn valuable interest on their retained earnings.
      Once all expenses have been deducted from the revenues, a company can see its
total profit or loss. This is the proverbial bottom line. It tells us how much the
company's assets and liabilities changed over the course of the year.
      Another tool for understanding a company's activity is to look at its cash flow.
This measures the actual flow of funds - real money - flowing into and out of a
company during a given period of time. A company's cash flow, or "cash summary",
factors out all of the accounting tricks and looks at what a company really earned.
Even though it does not tell us the company's "profit", cash flow sometimes gives a
clearer picture of a company's true earnings, because it excludes accounting tools
such as depreciation.
      Cash flows and profit and loss statements are essential for understanding the
revenues, expenses, and profits of any organization, including nonprofit organization
such as the World Wildlife Fund or the United Nations. Even if profits are not
distributed to shareholders, any organization needs a P&L to account for its activities
to see whether it is being efficiently and honestly run.

    10.1.5 Найдите ответы на следующие вопросы, попытайтесь понять их без
словаря:

     What is a profit and loss statement?
     What is depreciation?
     Why do many companies take advantage of the uncertainty in accounting?
     How can companies earn valuable interest on their retained earnings?
     What is another tool for understanding a company's activity?
     What is essential for understanding the revenues, expenses and profits of any
organization?
     Why does any organization need a P&L?
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