Business English Class - An Introduction to Finance | Benjamin Weinberg | Skillshare

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Business English Class - An Introduction to Finance

teacher avatar Benjamin Weinberg, English as a Second Language Teacher

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Taught by industry leaders & working professionals
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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

2 Lessons (43m)
    • 1. Introduction to Finance

      18:08
    • 2. Finance Continued

      24:38
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About This Class

In this class, you will learn about how to understand Business English when it comes to the important topic of finance, and how exactly do you use both concepts in English to further your career.

You'll understand how to become familiar with both Business English vocabulary as well as the grammar concepts related to these two topics. You will also get to learn about the principles underlying this fundamental tenet of the business world and how to get a good grasp on the basics for them.

These two videos will help you to develop your business skills in an effort to become more proficient in this part of the English language by mastering basic finance principles and how to apply them in your work with Business English. 

Meet Your Teacher

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Benjamin Weinberg

English as a Second Language Teacher

Teacher

Ben is the founder of English from A to Z. He has been an ESL teacher and instructor for the past four years. Ben earned his TEFL / TESOL certification from the International TEFL Academy back in December of 2013. He has a wide variety of experiences in teaching English as a second language to students from around the world. Ben has taught English for companies and organizations such as Berlitz Inc., the Washington English Center, and the Huntington Learning Center. 

In addition, Ben spent a year living in Istanbul, Turkey where he taught English to high school students and also gave private tutoring to Turkish adults.  Continuing his adventures overseas, Ben recently lived in Medellin, Colombia and volunteered at a public high school helping Colombian students to impro... See full profile

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Transcripts

1. Introduction to Finance: Hello, students, and welcome back to our business, English course. My name is Ben, with English from A to Z. And in this lesson, we're gonna do an introduction of finance, which is something that could be its own course. But we're gonna focus on finance in this lesson and in another lesson. So let's continue with finance. So what is finance? How do we explain it in English? Well, finances, essentially the study of money and how it is used and finance also relates to how systems are utilized to create and manage investments that are related to money to currency. And there are also other financial instruments that we should be aware of, including stocks, bonds, loans, hedge funds, currency swaps and even different types of insurance. So the psychology behind finance to really go more into detail about why you find it's important, Why do we talk about it? We have to understand that the main goal is to minimize risk and maximize the potential award reward involved for your client or for your self. If you're involved in the finance world, you have to understand the behavioral reasons and decision making involved in terms of what makes finance work. There are a number of emotional, social and psychological reasons for how people make financial decisions, and we and that we should be aware of new word conduct business in, especially in English speaking world. You need funds to do so and those financial institutions, if you're working for one or need to to be in discussion with one for your business. They are responsible for allocating capital or money to those businesses businesses, including possibly yours. And this is done to keep the economic system rolling and functioning, because without floats of capital, there is no economy and there are no businesses. So that's wise. Finance is so important because without finance there can be no business, and there could be no companies as well. How many types of finance or there? Well, there's public finance kind of public financing of projects that are done at the government level, whether it's local or national. You have corporate finance discussing how how money is exchanged between companies or with it or within companies. Obviously personal finances, huge in terms of managing your investments, managing your savings, making sure that you're allocating capital for your own investments could be in real estate , er could be in your own businesses and and social finances can be cited as the fourth type of finance, although it is much less defined and now as why we know. But it is a type of finance and what you should take from this vocabularies that each type of finance involves knowing how to allocate Resource is distribute capital or money and then planning out short term and long term needs, depending on if you're focused on finance for an individual, for a company or for a government as well, So keep those four types of finance in mind. So for some vocabulary, I'll try to explain as best I can, because I'm not a finance expert. But the English words we want to know here are financial asset, your assets or what you own, or what are valuable that are things that are worth something. And then your equity is kind of maintaining your steak or claim on assets. How much do you own of an asset, then the cost was it cost in terms of money to buy an asset or to sell an asset? What is the worth of an asset How much capital is it? Is it mustering? How much money is it worked. The interest that you pay on the asset, how much interest will admit you in terms of your investments? One of the taxes on your finances? How much tax will you have to pay and how much revenue will gain from your investments from your financial assets? How much revenue will you show and what are your profits after you reduce have to, minus the cost from the revenue, what profits will be left and, obviously, earnings financial earnings of the same financial profits. And you want to make sure you avoid any debt so you don't want to go into debt from financial debt is kind of the worst confident because they can accrue interest and you're all set to pay tax on the debt. So these air some boat category words there associate ID with finance in English that we should be aware of to continue with financial cabin area of risk. Every financial asset carries it with a risk because the value might go down or decrease. How much credit do you have? Is your credit good? That may decide whether or not you can buy assets that putting on your credit insurance. Do you carry any insurance for your investments? Capital, as we talked about, It's the money that flows into finance in view that you flow into your financial assets or what you take from your assets. Speculation is how much the assets are worth. Hedge fund managers do this all the time. They speculate about these instruments, these assets and how much leverage you have with your own assets to purchase other assets. How many rewards can you get from purchasing assets? And are your investments worth it? Will they accrue interest? Will they become more valuable or less valuable over time? So there's there's some other financial vocabulary words that you want to be familiar with when we're talking about English finance. Okay, so this is important to you. Can jump down notes, but it's good to keep track of this for your own memory. Some financial instruments of use. There are a lot of them. You have bonds that you could buy, sometimes issued by the government or issued by companies. And, well, cash is obviously a financial Richman. The most important one certificate of deposit, perhaps for your savings. Commodities such as oil or gold or steel or even data is becoming a commodity. How much do you have in these commodities? Credit swaps Derivatives are another one of their more complicated, but they are used as instruments. Equity in terms of your assets. Have each equity in terms of your own. Ing's future is how much will be worth in the future. Your essence. Mutual funds. Pension funds for your retirement. Real estate is a huge financial instrument in terms of your owning a bit building or a house or an apartment savings account is the most common, the most public one. Do you know how much money you have saved and what your account shares in a company is another one. That's an important financial instrument. A swell Stocks and companies will offer stock options for people. For employers or employees. Stocks are worth a certain amount of money as well, and you can cash them out and then Treasury bills. If you buy bills and you own a stake in the government who are issued Treasury Bill Treasury bonds. I'm not an expert in finance, but these air the English vocabulary words I want you to be aware of when we're talking about English and finance. So financial phrases. Let's look at some sentences that use phrases or idioms to talk about finance, and let's begin with it costs a fortune to buy stocks and Facebook these days. So across a fortune is another expression, meaning it costs a lot of money. Or it's Facebook is such a huge company that stops. There were so much money that it costs a fortune, actually, buy the stocks to invest in Facebook's Across the Fortune means it costs a lot of money. I got a real bargain on this real estate deal. I was able to purchase the real estate property for a good value. A real bargain means you've got it cheaply or you got a good deal on it. So if you get a real bargain, it means you didn't spend too much money because you were able to purchase the real estate property for a good value without over spending. The waiters financial statement from Netflix shows that they're actually in the red in the red means they're not make money, they're losing money. So when you hear in the wall when you see the Wall Street Journal or another financial journal and says the company is in the red. It means they're making less money than there. Then there then then there are giving out meaning their costs are more than their revenues . So their their profits, they're not making any profit, their costs away, their revenues. So there in the red, they're not in the green. In the green men's, they're making money, making actual profit. But if it's in the red than their costs outweigh the revenue. Uh, so they're not making any profit. So in the red means they're not doing well. And you could read that in a financial statement. Make sure you have enough money in your personal savings account so you don't overdraw your account. Overdrawn means you take money out of your account that you don't actually have. So events reading minus $50 or minus 100 euros. You don't have enough money, so you overdraw your account. So your savings account, you're out of money. You actually owe the bank money because you over drew your account. You took out money they didn't actually have. So be careful. If you hear about an overdraw. Our company is on a tight budget, so I don't know. We can afford to take out a loan from the local bank, so tight budget means you don't have a lot of money to spend your kind of just getting by every month. So if you have to take out a loan, be careful because he may not be ago reported. If you're in fact on a tight budget, so that's a good phrase to be aware of. If you don't have a lot of money or your company is kind of in the red or gonna be in the red, being on a tight budget means you have to be careful with how much you're spending. Or, you know, you shouldn't be taking out a loan if you can't pay back if your budget is tight. If you're tight fisted with money, you should not buy stocks in the market. So again, if you're tight fisted, it means you don't like spending money. You're not cheap, but you don't want to spend money unnecessarily. You should not buy stock, so if you're tight with money and you can't afford stocks here, you don't wanna spend a lot of money, then you shouldn't. But being buying stocks in the market that stocks are not cheap, especially if you want to buy a lot of them. In big companies like Netflix, for example, so it costs a fortune. A real bargain in the red overdraw, a tight budget, tight fisted, tightfisted, visceral financial idioms or phrases that we commonly use in business English To talk about finance, you know whether it's talking about budgeting or financial statements or stocks or loans. You have to be aware that these phrases in English are likely to come up in in the discussion. So this is a good a couple of good examples that you should be writing down or take notes on that are likely to come off these kind of financial phrases. So here are some finite financial verbs that are in the to form here, so we have to assess to inherit no inherit. A lot of money means gain a lot of money. Maybe to assess is to assess the credibility of the company's financial statements. To earn money for the savings account is another way to use it to save money in a bond market or to invest in a company to invest capital in a company to buy stocks in a company to borrow from a bank, uh, or borrow a loan from a bank to owe the bank money for that same loan to bet on the value of a stock in Facebook or Netflix or Google to value the company at $50 a share. He's a wrong ways that we can use English verbs to describe financial happenings to assess , to inherit, to earn, to save, to invest, toe by toe borrowed, Oh, Tibet value goes on and on. But these airways that we should be using English sentences to write up with these burbs, and they're not going to be in the to form. But you want to put them in the right present past or future tense. For these financial verb, so participates in finance. Well, that's a really good question a lot of people do. There's a lot of different players, but the ones you should know you have your local banks loan money out. Central banks who issued bonds and Treasury bills. The government does that with Treasury bills, hedge funds, they bet on currency swaps and credit swaps and they assess the value of firms investment firms. Make sure that your money is invested in the right places and mutual funds. Retirement funds ways to pull your money into one area so you know they're secure at a certain point on stock exchanges, where you see the value of your investments, does it go down with the company's you invested in? Or do these investments go up in value? Stock exchange shows the flow and the rise and fall of companies in terms of their value and how much the shares there were so you could make money on Wall Street or another stock exchange. You can lose money if you participate in these financial markets. So financial jobs and professions. I'm not gonna go over all these, but you have your bankers had a bank. You have your credit. Analysts who could work at a hedge fund or an investment firm. Real estate managers, investors, insurance agents, lenders, regulators from the government, for example, shareholders, which could be you or me or John Kyodo speculators, stockbrokers, payroll managers, cashiers. So there's a wanted different financial jobs and professions of the huge industry, especially in the UK in the United States. You have a lot of financial industry folk who are in London or New York and also in the rest of the world. Um, you'll have these people who they're job is the manage money to manage the money of their clients and to make money from these financial markets. So it's important to know the names and titles of these different professions to make sure that you know what they dio and how exactly do they contribute to the economy or to business itself to go over the finance job responsibilities? Yes, I will do that. This is a good guy. This is a good way to sum it up because they're very complicated jobs, but I'll go through them now. An investor is responsible for managing people's money wisely so they can accrue a portfolio to have a secure retirement after their career. So investors managed people's money, their clients money wisely so they can have a secure retirement, and they can live off the money of their investments. An insurance agent manages your personal or family policy and make sure that you know your pricing options before you like buy life insurance, for example, or another form of insurance, but especially life insurance, because it will help your family members with terms of having money in case something were to happen to you, Uh, which hopefully that won't happen, You know. Ah, no wonder is someone who gives out loans or money with interest when you need some funds to either start a business or pay for your child's college tuition. So they went money with interests with loans so they could be from a bank or be from another institution as well. Regulator works for a government agency or walk watchdog organization to make sure that these financial professionals or investors are not breaking the law with their management of assets or securities. So they're following the laws, and they're making sure that they're not misleading their customers or their partners. So regulators do. An important job, speculated predicts where the financial markets are going in the near future and how prices may be shifting so that investors should could benefit on their returns. So trying to make money through speculation is a constant job in financial markets. So understanding, finance, sentence assignment with what you know about the financial world so far, and about English. How it roids to the English language. I want you to write 10 sentences using the vocabulary words that we have covered in this lesson. Make sure you include words, verbs and phrases that I've just covered previously that deal specifically with finance. Please be sure to use different words and phrases for east sentence to make it unique. Using your own background in business. Try to create sentences that are grammatically correct, but there are also relevant to your own industry or company that you focus on in real life . So you should have some background in business, and we're taking this course. So try to create sentences that are also grammatically correct. Correct. Relate your specific industry, whether it maybe that's manufacturing or construction or services or retail. If if you're at home watching this, trying to write these sentences related to your own business or related to your own industry and remember that the sentences you're right must be complete and follow the subject verb object order of the English language s fio. As I like to say so 10 sentences on a separate piece of paper or you can type it up. But make sure you use the book, have your words and the phrases that we've covered in this lesson and that deal with finance and use your own background in business to help you out with these sentences. So that's your assignment for this lesson on introduction of Finance. So thank you again for watching. I really appreciate you taking my business English Course. I'll be continuing with finance and another video, but I hope you got a lot out of this particular introduction of finance A lesson. Thanks again for watching, and I'll see you in the next video, but I thank you. 2. Finance Continued: Hello students and welcome back to our business. English course in this lesson will be continuing with the topic of finance, So we'll be discussing personal finance and other related topics within finance. My name has been with English from A to Z, and here we go. So talking more about financial jobs and professions, we covered a bunch of them. But here, some or to be aware of in finance, you have your auditor who is responsible for making sure that people are paying the taxes that the showed or companies air paying the right amount of taxes. They check that information out and they review tax forms. Then you have your accountant who balances your books and make sure that you your budgets are in line, whether that's personal or for your business. Financial advisors give you decisions about what to invest in where you should invest, how much money and making sure that your investments are stable in the financial markets. The consultant will also do that for your business, perhaps giving you advice about where to investor, how to handle equity in your company and how to handle shareholders, traders or those who trade your maybe company stocks with other stocks on the stock exchange, tax officials or similar auditors. They oversee tax money, and they make sure that they collect money for a local or national purposes. Treasurer is somebody who make sure the payments are collected and that the books are good in terms of how much the business has to spend and where they should spend the money. Financial analysts analyze markets, analyze investments, and they make sure that the financial markets are, um, stable and they see where the market is going. A loan officers as well. They decide where the banks lend money, and they make sure that the people who you're loaning money to our reliable and then less keep keeping it going. Lastly, we're getting towards financial directors. They direct their firms in terms of where they're investing, where they're looking to invest, and then we'll skip underwriter. That's not as important here, but credit analysts and make sure that the people that the credits, the credit markets, that your lending into our sustainable, and that there that the credit credit swap credit swaps are also sustainable as well and then fund manager stay manage these hedge funds thes large amount of investment funds and make sure that they're where they're investing is stable as well. So, again, I'm not a financial job expert, but these English vocabulary words that I'm listing thes air the titles of most important financial jobs or professions. So finance, jobs, responsibilities. I've come up with a few good definitions here, and we're gonna continue with the responsibilities here in it with the stockbroker. So a stockbroker's someone who is responsible for the buying and selling of securities on the stock exchange on behalf of his or her clients. So they're usually yelling and screaming. They got cards up or they're they're going from computer to computer and make sure where these securities markets air going in which stock is high and good to sell. Or, you know, so they're buying and selling frequently on behalf of their clients. And then a hedge fund manager is someone who manages a complex investment fund that is based around a variety of financial assets, some of which I don't even understand. But they pool capital from institutional investors, and I poured into their investment fund and then a creditor, someone who manages the money or funds that has been lent out to borrowers, and they want to make sure that money is paid back with interest from those borrowers so they manage the money or funds that's been one down. Make sure they get paid back with the interest. And the debtor is, unfortunately, someone who borrows the money and they have to make sure that it is paid back to the creditor, including the interest to so personal finance Getting to talk about personal finance. Obviously, everybody has a budget. They have to manage how much they spend, how much they have to spend and make sure they don't go into debt. Car insurance. If you have a car, obviously you want to get in shirt, especially in case of an accident or in case something happens to do with the car checking account. This is where you pull your money from when you're spending consumer alone. Sometimes you'll buy. You'll take alone in order to consume a little bit more credit card. This is to put you gain to gain points or maybe advantages on certain credit cards, but you use your credit card when you don't have the money now, but you're gonna pay it later in about a month or so off the credit card so your bank is giving you credit money. You're a certain amount of money to spend each month, but you have to pay the bank back to cover your purchases. Health insurance home and, for assurance, another port waste to take care of yourself in case something happens to whether your home where you live or to your health So health insurance covers, you know, dental or procedures or checkups. Any major medical expense that could come up. You want to make sure insured, and then if you're making ah, steady salary, you know you're gonna be taxed on your income, depending on how higher or lower is in a progressive tax system. Now, obviously, insurance is a general term for making sure that your future is taken care of in case something happens that you'll you won't go broke because you'll have these kind of car payments or home payments or health payments kind of covered for so you're protecting gins liabilities through your investments through life insurance is well, if something happens to you when you're not longer around for your family life insurance make sure that your family will receive money in case something where to happen so that they will be able to sustain themselves. And obviously, if you're gonna by a house, you have to deal with a mortgage because you can't pay for usually a whole house right away . You're gonna have to pay for it on a monthly or yearly plan. So that's your mortgage for could be 5 10 or 30 years, and a pension is usually not. Everybody receives a pension, but it's kind of your retirement. Ah lot men. So if you work for a company for 10 20 mirrors, you're paying into your pension. The company's paying into a two or the government is so you'll see a certain amount of money per month after you retire. But you have to commit to 20 or 30 years that will go towards your pension. So these were some vocabulary words that come up when it when it comes to personal finance . Oh, and we have a few more here property taxes. You gotta pay taxes on property also on sales down here, and everybody should have a retirement plan to make sure after you finish working that you'll have enough money saved up for the rest of your life. It specially if people are living longer. That's what you gotta save a portion of your salary into your savings account. And in the United States, we have so security. Other countries have something similar where the government will give you a certain amount of money for the work that you put in. You pay taxes towards so security, and that'll cover part of your retirement expenses. And then student loans is a huge deal nowadays, especially here in the United States, where you may need to take out thousands of dollars in loans in order to pay for a college education. Hopefully, you don't need to do that, but it is a common occurrence on wages. Is the money that you're making on hourly or weekly basis, then your expenses is or is the money that you're spending that you're taking out of your account, And it's important to check your account balance to see how much money you have, your checking, how much money you have in your savings, and at the end of the month, every bank will have a statement showing what you spent your money on How much do you have left, How much you've been spending every month and you can keep track of your payments. It used to be you had a checkbook. But now, with everything going digital, it's easy to check where you've been spending money not just with the checkbook, but through you're banking online account. We talked about debt and credit, but you can have a debit card, which withdraws money from your checking account right away and obviously could transfer funds between bank accounts or between checking and savings accounts. Mobile payments, especially nowadays, is becoming very popular, So using your cards were using your accounts to pay with your mobile phone. That's becoming really popular. And you have all these payment processors like Strike PayPal Venmo, where you can pay online or get paid online without going through your bank. So it's become very popular to do that. So personal finance. Let's use some sentences with these vocabulary words with these verbs as well. So we have withdraw had to withdraw money from my Citibank account today, which all means take out deposit. My company automatically deposits my salary at the end of every month, So deposit means putting in money into your account so nobody is gaining money. Interest. Please make sure to not pay, say, 5% or more interest on your student loans each payment cycle. So you don't want to pay too much interest on student loans because that's a lot of money. It adds up. So be careful how much money are on your loan, so you have to pay back in terms of interest. Earn. Do you know how much you earn after subtracting for income and payroll taxes, the money you earn is how much you're taking in. Actually, after receiving tax or taking or paying taxes, I should say, Oh, I still owe $500 to the government even after having done my tax returns this year. So if you owe money, it means you have to still pay more money to the government or to a company, perhaps pay. Are they paying you enough where you can put money into your savings account each month? So paying means being able to get money, you know, toe, uh, to be paid for your work well. And where is that money go after you get paid. Where you putting it Payoff. It will take me another 10 years to pay off my remaining student loan debt. So when you have debts, when you have dead, you have to pay it off over time. So paying off is a continual process that won't just happen overnight and then transfer. Whenever I deposit any money into my checking account, I always try to transfer 20% of it into my savings account right away. So transfer is when you take money from one account to another account as well. So taking money from after your deposit a paycheck maybe take 20% of it into your other account, which would be your savings. So those are some of verbs that we use when it comes to personal finance. And discussing these verbs in terms of finance is key to understanding English vocabulary with this topic, so do you know the difference in meaning? So let's look at a couple of different examples you have borrow versus lend saved versus wasted afford versus pay charge versus cost, earn versus wind, Invest versus inherit. So these air different meanings here. So how do we know how they're different? So what say How are these verbs different from each other? How would you explain the difference in meaning to a business English teacher such as myself? Could you do so to a classmate was a non native English speaker. So pulls the video. Maybe ask yourself, Do I know the difference between these verbs? These financial verbs? Do I know the difference between borrow versus lend Saved versus wasted of Ford vs pay charge versus costs Earn versus win. Invest versus Inherit. How are these verbs different from each other? Could I explain the meaning to my teacher? Could I do so to a classmate? Was the non native English speaker as well. So let's let's take a deeper dive here. So let's compare these finance burbs. So I borrowed $100 from John to start my online business. So I borrowed. I took money from John Start, my online business. I lent $1000 to Derek. I gave $1000 to Derek. In other words, to help fund is college education. So we see that borrow means toe. Take money temporarily from a person where lend is to give money to a person that they want you to pay back to them eventually. So these air different verbs borrowed is different than when borrowed means to give. When'd, um, it borrows. Sorry, Borrowed means to take, I should say from another person when means to give to a person. He wasted all his paycheck by spending it all in one week, so waste means to totally get rid of it. It's all gone. So if you waste all your money, that's probably not a good thing. Where is safe? He was smart and that he saved 30% of his paycheck each month. So if you save money over time, it'll accrue and you'll have more savings instead of wasting at all. If you waste it all, it's all gone. But if you save some of it, it will remain and maybe gain some interest. Because she has a financial advisor, she can afford to invest in the stock market. So if you have a financial advisor, if somebody giving you advice about where to spend your money, we're doing where to invest. You couldn't afford to maybe have a financial advisor to pay them if you're able to successfully invest in stock market, but she can't pay for her private English tutor, since she only works a minimum wage job. So if you can afford something, it means you're kind of more well off. You can afford it. But if she can't pay, mean she if she's not making enough money, she's working a minimum wage job. Not very good wage she can't pay mean she can't afford. In other words, so afford and pay are two different burbs. If you can afford something, you're good. If you can pay for something, you're good. But if you can, then it's not so good. So there are similar afford and pay, but they can you be used into a different context. So let's continue with the comparisons. Because they were visiting America on holiday, they were charged extra for temp in tax when dining out on restaurants. So in the US we have a tipping culture, so foreigners, or sometimes not aware of that, but you can be charged, meaning you can have to pay extra for tip and tax after dining out at a restaurant at the end of the day with the bill, so charge means you have to you owe money. Oh, more money sometimes their price, fixed meal costs less and friends because tax and tip were already included in the bill. So how much is it costing you? Means How much do you oas well, but there's a difference between charge and cost charges kind of more aggressive and cost is kind of more general, but they all relate to how much you owe how much money you owe. We want a free trip to Cancun, Mexico, because of all the airline my which points we had earned on our credit card. So to win or to one means you congee ain't financial advantages by maybe having a credit card. So there are a lot of mileage points or airline perks that come for credit cards so you can win a free trip. Or you can win points or when interest it through credit cards. Our life insurance policy allows us to earn up to 8% interest, depending on how much money we invest in it. So if you can, you can earn a lot of more interest. The more money you invest enough in a life insurance policy, for example, so earn means to gain you're not winning it for one time offer trip or one time offer points valuation, but you're earning something after investing. So there's a difference between one and earn for finance. Michael's grandchildren were lucky because they had inherited a couple of $1,000,000 each from their well off grandfather. So inherit you don't earn the money. You inherited it from a previous generation. You actually you don't earn it, but you get the money you wouldn't you and you receive that type of inheritance because of your family members, while the stock market is always a risky, but many Americans continue to invest the future of their retirement fund in it. So investments to buy in to use to spend money towards to put money towards stock market remains a crucial part of this for many people in the United States and also around the world. While it's risky, you can make high rewards beacon also brisk a lot of your money, but retirement funds are often tied into how well the stock market is doing with 41 case, for example, so those are a lot of good finance. Berg comparisons and how do we use them in English sentences and I highlighted are bold id here, the verbs here in terms of how we use them in finance English. So what is a financial statement? Let's talk a bit about a financial statement, cause you know how you have to read it. You have to understand it. You have to understand written English, so you should know what a financial statement is. So a financial statement is a set of written records that go over the business activities of a company as well as to show their financial performance over a fiscal year. So the financial statement will include a number of data and statistical figures, including the company's balance sheet, you know, costs versus profits. Sorry cost versus revenues. I should say the income statement and a clash flow statement. It is very important to both understand and use the financial statement to correctly assess the prophet, the company's overall financial health and if it is actually making a profit, if it's in the green like I talked about before or has not turned a profit, if it's running too many costs, is it in the red? So financial statements make it must be accurate. It must be up to date as it is possible that your company could be audited by government agencies, including the tax revenue agency or tax collective agency. If you're not showing your books, you have to open your books up. You have to see, Are you making money or you at a loss? So auditing can also be used by accountants investors to see if the company is worth investing in. You don't want to invest in a company that's waiting money, and it has no profit margin. So auditors will look at that and you can. Accountants and investors will want to look at that within a company's finances to see if they're worth investing money and we're equity in. So what's looking? An example? Quickly. Financial statement. Here we have X Y Z Corporation kind of a general, you know, show Jane Doe Example Company the income statement for the fiscal year of 2012. So if your net sales you have your dividend revenue, so your total revenue is that amount 70,000. But then you have your expenses revenue minus expenses. You have your cost for good of good school selling expenses, administrative expenses, income tax, he gonna pay. So total expenses. So you take your revenues minus your total expenses. Then you have your net income of 42,000. Then you have your earnings per share for this public company. So you gotta ask yourself at home, is the X Y c corporation making a profit? Where? Why not? Do we have profits after revenue minus expenses or costs? How much earnings are this? Share stockholders again, making per share. So if you have a share, how much are you earning per share? Ah, and what is the biggest expense? That out of the listed one. Tell me yours a little math. You're But what is the business biggest expense to this company right now. And you can write your answers in complete sentences, and I really encourage you to do so just to fall along and improve your written English. So if you're in business in the English speaking world, you may have to analyze financial statements, draw conclusions from them and see how the company is doing in terms of profit versus loss . And then we have her balance. She So here's an example of balance sheet. You got your assets stuff that the company has cash accounts receivable. Rent inventory is stuff that you own that you're, you know, that you have long term. So your total assets, then you got your liabilities, the money owed to be paid out, insurance employees, expenses, contracting expenses and an owner equity. How much equity does the owner have and how much money does that involve? Losing. So your assets minus liabilities plus owner's equity equals kind of your whole assets minus liabilities equals the balance is are you have a surplus or a deficit here when it comes to the balance sheet. And here we have polls Guitar shop from 2015 so assets minus liabilities. But you also get a factor in owners equity in the company. So we've got to be able to bulls understand a financial statement. She and the English words there, but also the balance sheet. Here, you have to know what assets are. You gotta know what the liabilities are in the owner's equity, how much there's how much stock or earnings that the owner has to take from the business as well. So now I want you to do another financial Simon, please. I want you to create your own balance sheet or a financial statement. So using your knowledge of the finance unit of this course from this lesson and previous one do the following for this lesson assignment. I want you to one. Create the name of a fictional corporation as well as a basic financial statement, or it could be a balance sheet regarding their assets. Liabilities. Equity of the owner. If necessary. Make sure you will highlight what are the amount and sources of the company's revenue, where they get the revenue from, as well as the amount and sources of the company's expenses? What air they owing money from? Then, after following the examples in terms of the writing up of the financial statement or the balance, she write an additional paragraph pretending to be a financial analyst and assess your company's financial health. Are they in agreeing? Are they in a red? Are they long term sustainable? Think of your own business background, perhaps to help you here and remember to discuss in your written work of a paragraph. If outside investors should invest capital in the company or not, should if you're a venture capitalist or an angel investor is a worth investing money in this firm. Long term, you should indicate if the companies making a profit or if it's costs outweigh its revenues . In your summary, so are again. Are they in the redder they in the green care? So remember to use the correct grammar and vocabulary phrases from previous lessons of the course, including the introduction of Finance one earlier. And now this finance continued. So remember, create the balance sheet of the financial statement, highlight the mountain sources of the company's revenue and its expenses together. Then write a paragraph please below the financial statement. A balance sheet may be on the same sheet of paper, and you can use Excel, but you want to decide if it's worth investing in this company, this fictional firm And if outside investors should, uh, just to do so, should investor not invest and to tell the audience if they're making a profit or if the costs outweigh the revenues in your paragraph summer. So follow these directions. Remember, you can pause the video, take notes, but please do this either on your computer on a piece of paper, but get the practice out of it. You can also hopefully submitted to me for review as well. But this is for your own benefit to do these kind of assignments for improving your business English knowledge. So I really encourage you to do this lesson assignment based on what we just covered earlier with the example. Balance sheet in the example. Financial statement. So thank you again for watching. I appreciate you paying attention and your for your interest in finance. Recovered. Introduction, finance. Now we're finished. The financial finance unit of this business English course. Thanks again also for taking this business English course. And I appreciate your interest in this type of English And thanks again for watching. And I'll see you in the next video. We'll buy.