ACCOUNTING AND FINANCIAL STATEMENTS

Accountancy  accountants  Accounts Department, the Accounting Department  Chief Accountant, Accounts Department Manager bookkeeping-bookkeeper accounting-accountant auditing-auditor MK, p.95

Financial statements (1)  The Balance Sheet  The Profit and Loss Account -P&L (The Income Statement)  The Cashflow Statement RB (find Croatian equivalents) MK, p.96

profit, net profit, loss, revenues, sales, cash flow, gross profit 1.………………… profit which remains after all costs and taxes have been taken away 2.…………………amount of money coming into and going out of a company 3.…………………spending more money than it is received 4.…………………total number of products that a company sells over a period of time 5.…………………money received from selling goods and services 6.…………………money gained by selling something after taking away costs 7.…………………profit before taking away costs and taxes

Opposites?  Debit  Appreciation  Debtor  Profit  Fixed assets/liabilities  Long-term  Tangible  Accounts payable

Opposites  Debit  Appreciation  Debtor  Profit  Fixed assets/liabilities  Assets  Long-term  Tangible  Accounts payable  Credit  Depreciation  Creditor  Loss  Current assets/liab.  Liabilities  Short-term  Intangible  Accounts receivable

Financial statements (2) P&L (IS):What does it show? What does revenue include? What do expenditures include? What happens with profits? BS: 3 main pieces of information? CS: What does it show?

Financial statements (3) Where can the following information be found? 1.How much does a company owe? What does it own? 2.What are its sales and related costs and expenditure? 3.What are company profits generally used for? 4.Where does cash come from? What is it spent on? 5.What does equity include?

A few more terms used in accounting: goodwill, share premium, common stock, pre-paid expenses,proceeds Source: Investopedia 1.costs such as rent, interest or insurance premium that are paid in advance 2.an intangible asset such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology 3.cash realized from a sale or received as a loan, after all commissions, expenses, fees, and taxes are deducted 4.the account to which the amount of money paid (or promised to be paid) by a shareholder for a share is credited to, only if the shareholder paid more than the cost of the share 5.a security that represents ownership in a corporation and gives rights to a company's assets only after creditors and preferred shareholders have been paid in full

Find the accounting terms that have the same meaning (AE & BE) AGM Balance Sheet Accounts Receivable P&L Account Common Stock Creditors Statement of Financial Position Additional Paid-In Capital Income Statement Net Income Profit AMS (ASM) Ordinary Shares Debtors Share Premium Accounts Payable

Google Annual Report for 2011

Google 2011 Study the annual report of Google and find answers to the questions below: a) What does SEC stand for? b) Who audited the report? c) What financial statements does the report contain? d) What risk factors are mentioned?

Risk Factors Assignment 1.Read the Risk Factors section in Google’s Annual Report for Make a chart based on Slide 17, and fill in the risk factors as appropriate (for each risk factor use its number, see slides ). Some risk factors can be used in more categories. Source: /d260164d10k.htm#toc260

Risk Factors (1) 1.Intense competition 2.Risky investments 3.Revenues generated almost entirely from advertising 4.Decline in revenue growth 5.Increased regulatory scrutiny 6.Legal proceedings 7.Dependence on a strong brand 8.Acquisitions and investments 9.U.S. and foreign laws

Risk Factors (2) 10.Intellectual property or other claims 11.Lack of protection of own intellectual property rights 12.Legal liability (online services or content) 13.Diverse access to the internet (not only PCs) 14. Privacy concerns 15.Insufficient security measures 16.Web spam and content farms 17.Interruption or failure of own ICT systems

Risk Factors (3) 18.Lack of effective management of the company’s growth 19.International operations 20.Losing the services of Larry, Sergey, Eric, or other key personnel 21.Relying on highly skilled personnel 22. Depending on access to the internet 23.New technologies could block ads 24.Class A common stock price may be volatile. 25.Concentration of our stock ownership

Where could problems come from? RISK FACTORSINTERNALOPERATIONSMANAGEMENTFINANCEEXTERNALMARKETCOMPETITIONCUSTOMERSINVESTORSREGULATORSLEGAL ISSUES

Report writing task Write a report on Google’s total assets in the period between 2007 and Use the information published on the Securities and Exchange Commission pages ( and in the course book (MacKenzie, I. (2010): English for Business Studies. Cambridge University Press) / /d260164d10k. htm#toc260 (

Check your work  Layout: obligatory sections, graphic organization (e.g. Findings), name/date  Referencing the sources (Procedure)  General features of each section: content, clarity, concision, accuracy  Language: phrases, voc., spelling/grammar

Risk Factors (1) 1.Intense competition 2.Risky investments 3.Revenues generated almost entirely from advertising 4.Decline in revenue growth 5.Increased regulatory scrutiny 6.Legal proceedings 7.Dependence on a strong brand 8.Acquisitions and investments 9.U.S. and foreign laws

Risk Factors (2) 10.Intellectual property or other claims 11.Lack of protection of own intellectual property rights 12.Legal liability (online services or content) 13.Diverse access to the internet (not only PCs) 14. Privacy concerns 15.Insufficient security measures 16.Web spam and content farms 17.Interruption or failure of own ICT systems

Risk Factors (3) 18.Lack of effective management of the company’s growth 19.International operations 20.Losing the services of Larry, Sergey, Eric, or other key personnel 21.Relying on highly skilled personnel 22. Depending on access to the internet 23.New technologies could block ads 24.Class A common stock price may be volatile. 25.Concentration of our stock ownership