Assignment 1

Part 1: Vocabulary
 Match the words on the left with the synonyms or definitions on the right.
1. Interest payment A. satisfy
2. Severe B. give one a right.
3. Obligation C. occurring at regular times.
4. Source D. extreme.
5. Entitle E. first.
6. Periodic F. the contract or promise that compels one to follow a certain course of action.
7. Issue G. a sum paid for borrowing money.
8. Deadline H. anything or place from which something is obtained.
9. Meet I. a time limit for finishing something.
10. Initial J. print for sale or distribution.

1 2 3 4 5 6 7 8 9 10
G D F H B C J I A E

Part 2: Gap filling

 Fill in the blanks with the words from the box.

business acquisition situations assets financing inventory ability purpose business

When a business decides to grow, you need acquisition capital. Define acquisition capital as
the capital used to acquire other assets. You use this capital to purchase assets like equipment, inventory, software,
or even a business itself. The purpose of these acquisitions is, ultimately, to grow the overall profits of a business
As such, the process of acquisition financing requires an ability in strategic analysis of the asset to be acquired, as
well as the various financing options. Acquisition capital is used in one of two situations: when the
growing business does not itself have the cash to grow or when the growing business will experience greater firm
value from financing the purchase as opposed to paying out of the free cash flow of the company.

Part 3: Grammar

 Complete the sentence with the correct word form.

1. operate/ operation/ operative
A. Business operation in Cambodia is not an easy task.
B. Companies need capital to start up operative and expand their business.
C. The current operate system of the organization looks very effective.
2. corporate/ corporation/ corporative
A. My group is not well corporative because each member does not work well together.
B. Multinational corporation is based on one country and has production centers and marketing activities
in other countries.
C. Corporate business is seen almost everywhere around the world.
3. produces/ production/ productive
A. Swatch Group production watches and sells them in many countries around the world.
B. Produces is the creation of services or conversion of raw materials into products.
C. If the productive system in your body is not good, you cannot have children.
 4. compete/ competition/ competitive
A. KMV and CM compete with each other in the market of construction.
B. The competition between Arsenal and Real Madrid will take place next month.
C. Business is very competitive nowadays.
5. decide/ decision/ decisive
A. Balance sheet and income statement are very essential for internal decision making.
B. You need to decide whether to keep your business going or to close it.
C. Dr. John played a decisive part in the success of our business.

Part 4: True/ False Questions

 Are the statements below True or False? Put T or F.

1. The money needed to start and continue operating a business is known as equity. F
2. Financial management is the process of managing the acquired capital. T
3. A business uses both short-term and long-term capital in financing business operations. T
4. To raise capital by selling corporate bonds is an example of equity financing. F
5. Bondholders will get their principal back at a maturity date. T
6. Bondholders may take a severe loss if the company is not successful. T
7. Stockholders have legal rights in the management decision making in a company. T
8. Dividends to stockholders are tax deductible. F

Part 5: Comprehension questions

1. What is finance?
2. What is short-term capital and what is long-term capital?
3. What is equity financing?
4. What is debt financing?
5. What is dividend?

+Answer

1. Finance refers to the study and management of money, investments, and other financial instruments. It
encompasses various aspects related to monetary matters, including credit, debt, securities, and
investment strategies.
2. -Short-term capital refers to funds needed for immediate or near-future expenses, such as day-to-day
operations, inventory, or short-term projects.

-Long-term capital, on the other hand, is used for more extended periods, often for investments in fixed
assets like machinery, buildings, or research and development.

3. Equity financing is the process of raising capital through the sale of shares. Companies use equity
financing when they need cash for short-term needs (such as paying bills) or long-term projects that
promote growth. By selling shares, a business effectively sells ownership of its company in return for
cash.
4. Debt financing occurs when a firm raises money by selling debt instruments (such as bonds, bills, or
notes) to investors. Unlike equity financing, where investors receive stock ownership, debt financing
involves borrowing money. The company promises to repay the principal and interest on the debt.
5. Dividend is the distribution of a company’s earnings to its shareholders. It is determined by the
company’s board of directors. Dividends can be paid out as cash or reinvested in additional stock.
Shareholders of dividend-paying companies receive distributions, and the dividend yield is expressed as a
percentage of the company’s share price.
Part 6: Preparation

1. Prepare a business plan below.

Business Plan

General information

a. Type of business: ……………………………………………………………………………………………………………..

b. Product or services: …………………………………………………………………………………………………………
c. Business hours: ……………………………………………………………………………………………………………….
d. Number of employees: ……………………………………………………………………………………………………

Name of business

Name of owner(s) and % of ownership

……………………………………………………………………………………………………………………………………………………..
……………………………………………………………………………………………………………………………………………………..
……………………………………………………………………………………………………………………………………………………..

Marketing

a. Target market ………………………………………………………………………………………………………………….

b. Need for this goods or services ………………………………………………………………………………………..
c. Major competitors …………………………………………………………………………………………………………..
d. Type of promotion …………………………………………………………………………………………………………..

Employees

1. Management
a. Names and positions of key management personnel
…………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………
b. Background(s) of key management personnel
…………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………
2. Workers (number and background)
…………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………

2. Now consider the financial needs of your small business.

A. How much money is needed to start up your small business?
………………………………………………………………………………………………………………
……………………………………………..
………………………………………………………………………………………………………………
……………………………………………..
B. What will this money be used for (land, building(s), equipment. Furniture, inventory, working capital,
and advertising)?
………………………………………………………………………………………………………………
…………………………………………………
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
……………………………………………………………………………………………………
………………………………………………………………………………………………………………
…………………………………………………

Loan Application

Name of business ……………………………………………………………….Date formed ………………………………….

Type of business ………………………………………………………………………………………………………………………….

Number of employees at time of application ………………………………………………………………………………

Use of proceeds:

1. Land/ building(s) acquisition $.................................................

2. Building construction $.................................................
3. Building repair or expansion $.................................................
4. Purchase of machinery and equipment $.................................................
5. Purchase of furniture and fixtures $.................................................
6. Inventory purchase $.................................................
7. Advertising $.................................................
8. Working capital $.................................................
9. …………………………………………………………. $.................................................
TOTAL $.................................................

……………………………………………………………………………………………………………………………………………………..

TOTAL COST OF PROJECT: $.................................................

TOTAL AMOUNT OF LOAN REQUESTED: $.................................................

……………………………………………………………………………………………………………………………………………………..

Name of principle ………………………………………………………… Telephone number ……………………………..

Position ………………………………………………………….ID or social security # ………………………………………….

Annual salary …………………………………………………. % ownership……………………………………………………….

Name of principle ………………………………………………………… Telephone number ……………………………..

Position ………………………………………………………….ID or social security # ………………………………………….

Annual salary …………………………………………………. % ownership……………………………………………………….

Name of principle ………………………………………………………… Telephone number ……………………………..

Position ………………………………………………………….ID or social security # ………………………………………….

Annual salary …………………………………………………. % ownership……………………………………………………….