1. ACCOUNTING AND FINANCIAL STATEMENTS

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

3. 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

4. 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

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

6. 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

7. 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?

8. 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?

9. 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

10. 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

11. Google Annual Report for 2011

12. Google 2011 Study the annual report of Google and find answers to the questions below: http://www.sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm http://www.sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm 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?

13. Risk Factors Assignment 1.Read the Risk Factors section in Google’s Annual Report for 2011 2.Make a chart based on Slide 17, and fill in the risk factors as appropriate (for each risk factor use its number, see slides 14- 16). Some risk factors can be used in more categories. Source: http://www.sec.gov/Archives/edgar/data/1288776/000119312512 025336/d260164d10k.htm#toc260

14. 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

15. 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

16. 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

17. Where could problems come from? RISK FACTORSINTERNALOPERATIONSMANAGEMENTFINANCEEXTERNALMARKETCOMPETITIONCUSTOMERSINVESTORSREGULATORSLEGAL ISSUES

18. Report writing task Write a report on Google’s total assets in the period between 2007 and 2011. Use the information published on the Securities and Exchange Commission pages (www.sec.gov/Archives/edgar/data) and in the course book (MacKenzie, I. (2010): English for Business Studies. Cambridge University Press)www.sec.gov/Archives/edgar/data http://www.sec.gov/Archives/edgar/data/128 8776/000119312512025336/d260164d10k. htm#toc260 (www.sec.

19. 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

20. 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

21. 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

22. 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