What is Master Budget?
it is a strategy that documents expected future sales, productions levels, purchases, future expenses incurred, capital investments, etc.
Find out how to calculate Master Budget
Read the text:
How to prepare a master budget? Start with your sales.
Match the words in bold with their definitions below:
check your answers below.
master budget - budżet łączny
expected sales - przewidywana sprzedaż
purchases - zakupy
expenses incurred - poniesione wydatki/nakłady pieniężne
to estimate - oszacować
direct labor - koszty bezpośrednie robocizny
overheads - koszty ogólne, pośrednie
cash flows - przepływy pieniężne
financial statements - sprawozdania finansowe np.: bilans, RZiS
1. financial statements, 2. generate, 3. quantity, 4. cash flows, 5. inflows, 6. estimate
Are you an accountant? Do you need to speak English at work? Are you preparing budgets or financial reports? Contact me to schedule your free trial lesson.
Collocations for Key Business Words
What is a collocation?
It’s a pair of group of words that often go together. They can be made of a verb + noun (set up a business), adjective + noun (direct costs), noun + noun (market leader). You should learn how words combine to sound natural and be more fluent in English.
Collocations for key business words – Verb + …
Verb + a COMPANY
Set up / establish / start a company
The company was established in 1997.
Buy / take over / acquire a company
We are planning to take over our main competitor.
Leave / resign from a company
She resigned from a company because she found a better job.
Manage / run a company
We have been running our company since 2001.
Verb + a CONTRACT / an AGREEMENT
Change / alter / amend a contract
We will have to amend the contract as our situation has changed.
Break / breach a contract
They breach the contract and didn’t supply the goods on time.
Negotiate a contract
The company needs to renegotiate the contract with its suppliers.
Draw up / prepare a contract
I won’t be able to draw up the contract by the weekend.
Enter into / conclude / make a contract
We concluded the agreement on 21st May.
Renew / prolong a contract
They wish to renew the contract.
Terminate a contract
Because our supplier doesn’t meet the provisions of the contract, we need to terminate it.
Verb + COSTS
Bring down / cut / reduce costs
The costs are too high and we need to cut them.
Who will cover the costs of transportation?
The company incurred costs associated with retraining its stuff.
Pay / meet costs
We will have to pay the costs of new software implementation.
Verb + a CUSTOMER / a CLIENT
Attract a customer
What can we do to attract new customers?
Deal with a customer
My main responsibility is to deal with customers and meet their needs.
Look after / take care of a customer
In our company we really look after our customers.
Lose a customer
We can’t afford to lose this client.
Do you want to learn more collocations? Schedule your lesson with me, contact me.
Change is inevitable (can't be avoided). People fear change as it usually comes unexpected and it is not easy to prepare for it. Resistance (being unwilling to do something) is something natural. Good managers are capable of overcoming resistance to change (fighting unwillingness) by preparing their staff for it.
Verb + change
to accept change - to stop resist
A lot of people find it difficult to accept change.
to bring about a change - to introduce
The government's advertising campaign is an attempt to bring about a change in the way we think about the environment.
to resist change - to be afraid and be reluctant to
It is natural that people resist change, as they don't want to leave their comfort zone.
to undergo change - to go through
Our company has undergone major changes over last few years.
Adjective + change
last minute change - very recent
I'm sorry for the last minute change in the agenda.
minor change - small
The problems of health service won't be solved by making minor changes.
noticeable change - significant
The has been a noticeable change in his attitude to work.
sweeping change - radical
The taxation system requires a sweeping change to help the poorest.
welcome change - wanted
Let's eat out, it will be a welcome change from cooking.
Read more about how to OVERCOME RESISTANCE TO CHANGE WITH TWO CONVERSATIONS from Harvard Business Review.
Are you resistant to change or do you welcome change?
DEPRECIATION VS. AMORTIZATION
When do accountants use the term ‘depreciation’ or ‘amortization'?
When they talk about different types of fixed assets (fixed – assets which are not likely to be converted quickly into cash).
Depreciation – it is a reduction in the value of a tangible asset (e.g. land, machinery, vehicles, equipment, inventory) over time due to wear and tear.
Amortization – it is a reduction in the value of an intangible asset (the one that is not physical in nature e.g. Goodwill, brand recognition, intellectual property) over time.
METHODS OF DEPRECIATION
The popular methods of depreciation include:
Straight-line – depreciation is in equal amounts over the estimated life of the asset.
Double Declining Balance - is an accelerated method, which counts as an expense twice as much of the asset's book value each year compared to straight-line depreciation.
Unit-of-production - is usesuful when an asset's value is related to the number of units it produces and not necessariliy the number of year it is in use.
Let’s compute depreciation using the Straight-line method:
Cost – how much the company paid for the asset
Salvage Value (residual or scrap value) – the estimated book value of an asset after depreciation is complete
Estimated life of asset / Useful life – the estimated number of years the asset is likely to remain in service
Annual depreciation – yearly depreciation
e.g. The company purchased a car for PLN 40.000 – cost of asset, estimated life – 5 years, estimated salvage value – PLN 8.000
Cost – Salvage Value/Estimated life = Annual Depreciation
PLN 40.000 – PLN 8.000/5 years = PLN 6.000
Therefore the annual depreciation of this tangible asset (a car) will amount
Below you will find the glossary of terms (EN-PL) and a video explaining the above mentioned methods of depreciation:
Glossary – EN – PL:
Depreciation - amortyzacja środków trwałych materialnych
Amortization - amortyzacja środków trwałych niematerialnych i prawnych
Assets - majątek, środki
Fixed asset - środek trwały
Tangible asset - środek trwały materialny
Intangible asset - środek trwały niematerialny
Reduction in value - spadek wartości
Goodwill - wartość firmy
Straight-line depreciation - metoda liniowa amortyzacji
Declining-balance depreciation - metoda degresywna amortyzacji
Units-of-production depreciation - metoda amortyzacji przypadająca na jednostkę wyprodukowaną
To compute - obliczyć
To purchase - zakupić
Salvage / scrap / residual value - wartość umorzeniowa, cena po amortyzacji
Estimated life of an asset / Useful life - czas użyteczności środka
Annual depreciation - amortyzacja roczna
Prefixes and suffixes give a new meaning to already existing words. Below, there are three prefixes which are commonly used:
MONO- meaning one
monochrome - a painting, drawing, photograph in a single color (monochromatic)
monologue - a long speech delivered by one person
monopoly - complete ontrol over the goods or services of an entire market
monoxide - an oxide containing only one oxygen atom in the molecule
SEMI- meaning half
semi-annually - occuring twice a year
semi-detached - about a house joined to another one on one side, having one shared wall
semicircle - half a circle
BI- meaing two/twice
bicycle - a vehicle with two wheels
biennial - happening every two years
bilingual - able to speak two different language
biped - a two-footed creature (e.g. humans)
Test yourself, choose the correct prefix mono/semi/bi:
1. Canada and the USA signed ......lateral agreement.
2. She gave a ......logue, nobody wanted to talk to her.
3. This industry suffers from a shortage of ....-skilled workers.
4. Christianity, Islam and Judaism are the main ......theistic religions.
5. Having a Greek father and Italian mother, he grew up ......lingual.
The answers are below.
1. bilateral 2. monologue 3. semi-skilled 4. monotheistic 5. bilingual
Companies manufacturing goods set up prices using different strategies. The prices are influenced by production and distribution costs, however, there other factors which are taken into account:
Retailers use also the following pricing strategies:
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