Page 141 - English Vocabulary in Use (Pre & Intermediate)

67 Business and finance

Banks and businesses

Most businesses need to borrow money to finance (= pay for) investments (= things they
need to buy in order to help the company, e.g. machines). The money they borrow from the
bank is called a loan, and on this loan they have to pay interest, e.g. if you borrow £1,000
and the interest rate is 10%, then you have to pay back £1,000, plus £100 in interest.

Businesses and profit
One of the main aims/objectives (= the things that you hope to do/achieve) of a company is
to make a profit (= earn/receive more money than it spends) (# make a loss). If a company
does not make a profit or a loss, it breaks even.
Most companies are happy if they can break even in their first year of business.
Companies receive money from selling their products — this money is called the turnover.
The money that they spend is called the expenditure (fml). They spend money on these
things: raw materials (= materials in their natural state used to make something else, e.g.
coal and oil are important raw materials used to make plastics); labour (= employees);
overheads (= necessary costs for a company, e.g. rent for buildings, electricity, telephone)

Rise and fall
Business people often need to talk about the movement of sales, prices, interest rates, profit
and loss, etc. Here are some of the words used to describe these trends (= movements):
2 ss JS
rise / go up / increase rise slowly rise sharply
(also gradually)
™, Ne \
fall / go down fall slowly go down
(‘decrease’ is less sharply
common as a verb)
Note: rise, increase, and fall are also used as nouns: a slow rise in interest rates, a steady
increase in sales, a sharp fall in profits, a dramatic (= sharp) rise in inflation. We can also
use be up/down: prices are up by 10%; profits are down by £2m.

Businesses and the economy
In order to grow/expand (= get bigger) and thrive/prosper (= do well / be successful), many
companies want or need the following:
low inflation, so prices do not go up
low interest rates, so the company can borrow money without paying a lot of interest
economic and political stability (= things remain steady and stable and there are no sudden
changes in the economic and political situation)
a healthy/strong economy (= in good condition), and not an economy in recession (= in a
period of reduced and slow business activity)
tax cuts (= tax reductions / lower taxes), so they can keep more of their profit. This often
depends on government expenditure, e.g. The government will not be able to reduce
taxes if public expenditure continues to rise.

138 English Vocabulary in Use (pre-intermediate & intermediate)