BEP 323 - Discussing Company Performance (Part 1)

Hello and welcome back to Business English Pod. My name’s Edwin, and I’ll be your
host for today’s lesson on talking about company performance.

The economy is in a state of constant change. Companies grow, and companies

shrink. New companies are born, and old ones disappear. And you don’t have to be
an investor to get excited about the boom and bust of markets and the story of how
company’s respond. But if you are an investor, your whole retirement might depend
on whether companies make the right moves at the right time.

This makes company performance a popular topic around the business table, or at
the pub. And when we talk about company performance, we often use special
expressions called collocations. A collocation is a combination of words that are
commonly used together, such as “company performance” or “state of change.”

Native speakers use these collocations automatically. In fact, our brains store these
groups of words together, as if they were one word. You can learn to remember
and use these collocations too. Studying collocations is a great way to learn
vocabulary and sound more natural. So, as you listen to the dialog, try to pick out
some of these collocations and we’ll discuss them later in the debrief.

In the dialog, we’ll hear Maria, Claudia, and Taylor, who work at a private equity
firm. Basically, it’s their job to invest in the right companies for maximum profit.
The three are discussing the performance of several companies they’ve chosen to
invest in.

As you listen to the dialog, try to answer the following questions:

1. Why does Claudia feel positive about Ranger Gold’s performance?

2. What is Taylor worried will happen if Ranger Gold builds a new mine?

3. What does Maria think Intuition Software needs to do to remain profitable?

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Vocabulary

Down the road: at some time in the future; “I like working in the States for now,
but sometime down the road I’d like to move the family back to Europe.”

To get back to: return to an earlier topic of conversation; “Can we save the
personal chat for after the meeting, so we can get back to the budget discussion?”

Straightforward: simple, clear, and easy; “Don’t worry at all about this new
bookkeeping software. I’ve used it before and it’s really straightforward.”

To maintain a strong market position: to continue performing well against the

competition; “I think we need to keep investing in R&D if we want to maintain a
strong market position.”

Stable cash flow: a regular and reliable flow of money into and out of a business;
“Most new companies can’t really expect to achieve stable cash flow in their first
few years of business.”

To overreach: to try to do more than you are capable of; “I think we’d be
overreaching if we built this new plant. At this point it’s just too expensive.”

To raise capital: to gather, earn, or attract money or investment; “We’re going to

have to raise a whole lot of capital if we want to buy out the competition.”

To reduce debt burden: to decrease how much you owe to various lenders; “Why
are we looking at borrowing money when we’re trying to reduce our debt burden?”

Projections: predictions about the future using evidence, especially calculations

about how something will grow or become smaller; “The value of a company is not
based on future sales projections, but on past sales.”

Golden opportunity: a great chance to do something amazing or rewarding; “Dave,

that position with Google is a golden opportunity. How could you not accept it?”

No pun intended: a pun is a funny use of a word or expression with two meanings;
after we make a pun, we sometimes say “no pun intended” to call attention to our
joke; “That big accident at the power plant was pretty shocking, no pun intended.”

To improve a financial position: to make a company financially stronger; “Buying our

own building and doubling our sales really helped to improve our financial position.”

On paper: used for saying that something looks to be true or good, especially when you
read about it, but is not really true or good; “With all his certificates and experience,
Reggie looked good on paper, but he turned out to be a terrible employee.”

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To meet long-term liabilities: to be able to pay debts that are owed more than one
year in the future; “This continuing recession has pension companies worried that
they won’t be able to meet their long-term liabilities.”

Big-time: greatly; “Our ad campaign was a huge success. We’ve increased sales big-time.”

Downturn: a decrease in economic activity; “The downturn in the oil industry has
forced many producers to lay off staff and reduce operations.”

To pan out: to work out or to conclude successfully; “Sales are pretty slow this
month so let’s hope some of these new leads pan out.”

Initial: first, or at the beginning; “I think our initial meeting should focus on
working out the details of our partnership agreement.”

Out of the woods: out of danger or difficulty; “All right everyone, we’re not out of the
woods on this big project yet, so everyone’s going to have to put in some overtime.”

To default on loans: to not pay money that you owe; “If sales don’t improve next
month, we might have to default on our loans.”

To mismanage funds: to spend or manage money badly or illegally; “We fired our
office manager for mismanaging funds. Can you believe she was buying clothes
with company money?”

Gamble: a risky plan or action that might bring great rewards; “With so many political
problems in the region, I think investing in this project is a huge gamble.”

To pay off: to bring good results or rewards; “Twenty years ago I bought some
properties in Vancouver, and they sure have paid off.”

To maintain a healthy ROI: to continue creating good profit, or “return on

investment;” “Shareholders believe that we need to get rid of our old CEO to
maintain a healthy ROI.”

To trim operating costs: to decrease spending on day-to-day business operations;

“I’m sure we can trim our operating costs if we call our suppliers and ask for better
payment terms.”

To slash a budget: to greatly decrease business spending; “The whole staff is worried
about job security since the finance manager said they’d have to slash the budget.”

The way to go: the right or best thing to do in a situation; “I know the Ford trucks
are cheaper, but in terms of reliability Toyota is the way to go.”

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Dialog

Maria: …Yeah, good point. I guess that’s something we’ll need to look at down
the road. But for now, can we get back to these companies? Let’s start with
Ranger Gold.

Claudia: Yeah… I think this one’s pretty straightforward.

Taylor: How’d you mean?

Claudia: Well, for one, they’ve maintained a very strong market position for
some time now. Stable cash flow. Growing nicely.

Taylor: Maybe… but I’m a bit concerned they’re about to… overreach.

Maria: You mean raising capital for that new mine in Oklahoma?

Taylor: Precisely. I think the priority should be reducing their existing debt
burden.

Maria: I don’t know, I’ve seen the projections for that. Looks very promising.
Golden opportunity, no pun intended. It’ll definitely improve their financial
position.

Taylor: Um… wait a sec here… remember Trellis Mining? Pretty much the same
situation. Looked great on paper. But I said they’d have trouble meeting their
long-term liabilities. And they did. I don’t want to see us repeat that mistake.

Claudia: Come on Taylor. Trellis was different in a whole bunch of ways. Their
situation was impacted big-time by the downturn. Things didn’t pan out for a lot
of big players at that time… [Fade out]

---------------------------

Maria: [Fade in] …okay, what say we move on to Intuition Software. Initial
thoughts?

Taylor: I think we’re finally out of the woods there.

Claudia: Yeah, I’d tend to agree. The old management team is gone. As is the
habit of defaulting on loans.

Maria: And mismanaging funds, I might add. The whole thing was a huge
gamble, but I think it’s starting to pay off. But still, there’s work to be done if we
want to maintain a healthy ROI.

Taylor: You probably mean trimming operating costs?

Maria: I think “trim” is a bit too optimistic. I’m talking about slashing the
budget.

Claudia: I think that’s the way to go too. I’d bet we could get it down by at least
15% pretty easily.

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Debrief

Now let’s go through the dialog again and look at the language and collocations
used during the meeting.

Maria: …Yeah, good point. I guess that’s something we’ll need to look at down
the road. But for now, can we get back to these companies? Let’s start with
Ranger Gold.

Claudia: Yeah… I think this one’s pretty straightforward.

Taylor: How’d you mean?

Claudia: Well, for one, they’ve maintained a very strong market position for
some time now. Stable cash flow. Growing nicely.

The first situation they talk about is the performance of a company called Ranger
Gold, which Claudia thinks is “straightforward.” That means it’s not a complex or
difficult case. In terms of the company’s performance, she explains that they’ve
“maintained a strong market position.”

What does this mean? Well, if a company is performing well against the
competition, and it continues doing well, we can say it “maintains a strong market
position.” Let’s practice some more examples of this collocation.

§ We have been able to maintain a strong market position despite increased competition.
§ With the decline of desktop computers, Dell wasn’t able to maintain a strong
market position.

There’s one other positive sign that Claudia mentions about Ranger Gold. She says
they have “stable cash flow.” Cash flow is basically the flow of money into and out
of a business. If that flow is stable, or regular, then the company has enough
money to pay its staff, its bills, and maybe even dividends to its investors.

Stable cash flow is a very important sign of a healthy company. Let’s run through a
few more ways to use this expression.

§ We may need additional investment if we can’t achieve stable cash flow soon.
§ After a lot of challenges last year, we’re happy to see stable cash flow once again.

Does everyone agree with Claudia about Ranger Gold?

Taylor: Maybe… but I’m a bit concerned they’re about to… overreach.

Maria: You mean raising capital for that new mine in Oklahoma?

Taylor: Precisely.

Taylor doesn’t seem to agree that Ranger Gold is a straightforward case. He’s
worried about “overreach,” which means doing or growing too much or too fast.

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More specifically, he’s worried about the fact that they’re trying to “raise capital” for
a new mine.

“Capital” is money. And when we gather or get money for a specific purpose, we
say we “raise” capital. It costs a lot to build a new mine, so Ranger Gold will surely
have to raise a lot of capital.

How else can we use this collocation “to raise capital?” Let’s run through a few
more examples.

§ AB Technologies is looking to raise capital to build its new headquarters in Palo Alto.
§ Many tech start-ups look to angel investors to raise capital.

So why exactly is raising capital for a new mine a bad idea? Let’s listen to Taylor
explain.

Taylor: I think the priority should be reducing their existing debt burden.

Raising capital usually means looking for investors, loans, or other kinds of debt.
And when you have more debt, we say you have a higher “debt burden.” It’s the
same as saying “debt load.” Taylor believes the company should “reduce” their debt
burden, not increase it.

Debt burden is an important aspect of company performance so let’s try a short

dialog to practice this expression.

A: Delta Industries is acquiring companies at a pretty amazing pace!

B: Yes, but on borrowed money. At some point they’ll need to reduce their debt burden.

Now let’s hear what Maria thinks about this issue of raising capital for a new mine.

Maria: I don’t know, I’ve seen the projections for that. Looks very promising.
Golden opportunity, no pun intended. It’ll definitely improve their financial
position.

Maria feels very positive about Ranger Gold’s new mine. She says it’s an excellent,
or “golden” opportunity. And that expression “no pun intended” just means that she
isn’t trying to be funny.

Why does Maria feel positive? Well, she thinks the new mine will “improve their
financial position.” We already heard “market position,” and you can probably figure
out that “position” is kind of like place or situation. So, if you improve your
“financial position,” you are making your company financially stronger.

Let’s practice a few more examples of this collocation “to improve a financial position.”

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§ We are looking to sell off some of our assets to improve our financial position.
§ If you really want to improve your financial position, I suggest reducing
operating costs.

Although Maria sounds very positive, Taylor still isn’t convinced.

Taylor: Um… wait a sec here… remember Trellis Mining? Pretty much the same
situation. Looked great on paper. But I said they’d have trouble meeting their
long-term liabilities. And they did. I don’t want to see us repeat that mistake.

Taylor is talking about another company that was in a similar situation. This other
company had problems “meeting their long-term liabilities.” Taylor is still talking
about debt. “Liabilities” are what your company owes to investors, banks, suppliers,
or anyone else. And “long-term liabilities” are debts that are owed beyond the next
12 months.

We can say that you “pay” debts, but we don’t say that you “pay” liabilities.
Instead, we say “meet” liabilities. Let’s run through some more ways of using “to
meet long-term liabilities.”

§ Fund managers are worried about whether they can meet long-term liabilities.
§ We need to continue growing if we want to meet our long-term liabilities.

Does Claudia agree with Taylor’s comparison between Ranger Gold and the troubled
company?

Claudia: Come on Taylor. Trellis was different in a whole bunch of ways. Their
situation was impacted big-time by the downturn. Things didn’t pan out for a lot
of big players at that time…

No, Claudia believes that the comparison isn’t really fair. For one thing, Trellis was
badly affected by the “downturn,” which is when the whole economy does poorly.
Of course, companies don’t perform in isolation. They’re part of a larger economic
system that affects their performance.

Now, let’s skip ahead in the conversation, as the group starts discussing a software
company.

Maria: …okay, what say we move on to Intuition Software. Initial thoughts?

Taylor: I think we’re finally out of the woods there.

Claudia: Yeah, I’d tend to agree. The old management team is gone. As is the
habit of defaulting on loans.

When Taylor says they’re “out of the woods” with this software company, he’s not
really talking about trees or forests. This is an idiom that means they are out of

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danger or difficulty. And Claudia helps to explain why. One reason is that they are
no longer “defaulting on loans.”

You know that a loan is money borrowed from a bank or other lender. Well, if you
can’t pay it back, we say you “default” on the loan. That’s not a good thing, and
definitely not a sign of good performance. But in this case, Intuition Software, with
its new management team, has stopped defaulting on loans.

What are some other ways we can use this collocation? Let’s run through some
more examples.

§ The government is trying to help young graduates who’ve defaulted on student loans.
§ We lost our building to the bank when we defaulted on our loan.

It turns out that defaulting on loans is not the only bad habit that Intuition Software
has given up. Let’s listen.

Maria: And mismanaging funds, I might add.

“Funds” are money, or “capital,” which we heard as part of another collocation. To

“mismanage” means to manage badly or even illegally. So, if you’re talking about
company performance, “mismanaging funds” is definitely a bad sign.

Let’s practice this collocation “to mismanage funds” with a short dialog.

A: Why on earth was the CFO fired after only a year?

B: Well, the board was concerned that he was mismanaging funds.

Maria goes on to explain her ideas about Intuition Software in more detail.

Maria: The whole thing was a huge gamble, but I think it’s starting to pay off. But
still, there’s work to be done if we want to maintain a healthy ROI.

Maria points out that their “gamble,” or “risk,” is starting to “pay off.” If a gamble pays
off, it earns you money. Ultimately, that’s what equity investing is all about. So, it
sounds like Intuition Software was a good risk. But, they’re not finished yet. As Maria
says, there’s more work necessary for the company to “maintain a healthy ROI.”

“Maintain” is like “continue,” just like we heard in the collocation “to maintain a
strong market position.” But what is a “healthy ROI?” Well, ROI stands for “return
on investment.” Simply put, that means the pay-off on the gamble. A healthy ROI
is a satisfactory profit.

Let’s try some more examples of this collocation “to maintain a healthy ROI.”

§ Sure sales are up, but if we want to maintain a healthy ROI we have to control costs.
§ These new government rules have made it difficult to maintain a healthy ROI.

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So now the question is: how can a company maintain a healthy ROI? Let’s find out.

Taylor: You probably mean trimming operating costs?

“Operating costs” are the regular day-to-day costs of running a company. And
“trim” means to cut just a little bit off something. If you go for a haircut and ask for
a “trim,” you’re asking for just a little bit taken off. If you “trim operating costs,”
you’re looking for small, basic ways to reduce spending. And that will help improve
profitability, and ROI.

Let’s practice a few more ways of using this expression “to trim operating costs.”

§ In an effort to trim operating costs, the plant is going from three shifts a day to just two.
§ Better leasing terms have helped us trim operating costs this year.

Is trimming operating costs what Maria had in mind?

Maria: I think “trim” is a bit too optimistic. I’m talking about slashing the
budget.

Maria doesn’t think a “trim” is all that is needed. She’s looking for something more
severe. She wants them to “slash the budget.” If “trim” means to cut just a little
bit, then “slash” means to cut a lot. “To slash a budget” means to significantly
reduce spending.

Let’s try some more examples of “to slash a budget.”

§ Looks like our new owners are slashing the budget and laying off 30% of the workforce!
§ Until sales pick back up, we’ll need to do whatever it takes to slash the budget.

So how does Claudia feel about the issue of Intuition Software’s spending?

Claudia: I think that’s the way to go too. I’d bet we could get it down by at least
15% pretty easily.

Claudia agrees with Maria about slashing the budget. She says that’s “the way to
go,” which just means that’s “the right thing to do.”

As we’ve heard, there’s lots to talk about in regard to company performance. Lots
of different ways of assessing performance. And lots of different collocations we can
use to talk about it.

Now it’s your turn to practice some of the collocations we’ve looked at in this
lesson. In a moment, you’ll hear a series of sentences with a word replaced with a
beep. Repeat the whole sentence, including the missing word. Remember, a
collocation is two or more words that we commonly use together, so pay close
attention to the words before the beep.

For example, if you hear:

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Example cue: We’ll need to find some good ways to trim operating <beep>.

You can say:

Example answer: We’ll need to find some good ways to trim operating costs.

After each response, we’ll provide the correct answer. Ready? Let’s give it a go.

Cue 1: Several big charities are being sued for mismanaging <beep>.
Answer:

Cue 2: Most investors won’t even consider your company without stable cash <beep>.
Answer:

Cue 3: Our big goal this year is to raise <beep> for a new factory in Ohio.
Answer:

Cue 4: The numbers all suggest we can maintain a strong financial <beep>.
Answer:

Answer 1: Several big charities are being sued for mismanaging funds.
Answer 2: Most investors won’t even consider your company without stable cash flow.
Answer 3: Our big goal this year is to raise capital for a new factory in Ohio.
Answer 4: The numbers all suggest we can maintain a strong financial position.

That’s all for this lesson on collocations for discussing company performance. We’ve
covered lots of vocabulary and collocations for talking about debt, spending, market
position, and return on investment. Tune in next time for even more useful
collocations about company performance.

Thanks for listening and see you again soon!

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Language Review

A. Collocations

Match the collocations in the box and then use them to complete the sentences
below. (If necessary change the tense of verbs to fit the context, i.e., to past or
future tense.)

To maintain cash flow

To default a strong market position

To mismanage operating costs

Stable capital

To reduce debt on loans

To raise burden

To slash funds

To trim a budget

1. If we ______________ our ______________, our whole relationship with this

bank is going to be completely ruined.

2. Paying off a line of credit and credit cards is one way to ______________ your
______________.

3. We had one month of poor sales, but still had ______________ overall
throughout the year.

4. We don’t need massive cuts. All we need is to ______________ a bit.

5. Well, Jerry had some questionable expenses, but I don’t really think he was
______________.

6. There’s a lot more competition in our industry, but sales are good and we
should be able to ______________.

7. Listen everyone, we’re losing money fast and I’m sorry but we’re going to have
to ______________ in the next couple of months.

8. We’re going to have to work pretty hard to ______________ for this big
European expansion.

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Answers

Listening

1) Claudia thinks Ranger Gold has stable cash flow and a strong market position.

2) Taylor is worried that Ranger Gold will not be able to meet their liabilities.

3) Maria thinks Intuition Software has to greatly decrease their spending.

Language Review

A. Collocations

1. If we default on our loans, our whole relationship with this bank is going to
be completely ruined.

2. Paying off a line of credit and credit cards is one way to reduce your debt
burden.

3. We had one month of poor sales, but still had stable cash flow overall
throughout the year.

4. We don’t need massive cuts. All we need is to trim operating costs a bit.

5. Well, Jerry had some questionable expenses, but I don’t really think he was
mismanaging funds.

6. There’s a lot more competition in our industry, but sales are good and we
should be able to maintain a strong market position.

7. Listen everyone, we’re losing money fast and I’m sorry but we’re going to have
to slash the budget in the next couple of months.

8. We’re going to have to work pretty hard to raise capital for this big European
expansion.

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