Success and failure

Success and failure

Cash mountains and surpluses

Prodaco is a successful comkpany. Over the years, it has distributed some profits or earnings to shareholders, but it has also kept profits in the form of retained earnings and built up its cash reserves; it is sitting on a cash pile or cash mountain. These reserves may be used for investment or to make acquisitions: to buy other companies.

Words

distribute /dɪˈstrɪbjuːt/ ★★☆ W2 vt.
to share things among a group of people, especially in a planned way SYN give out
Clothes and blankets have been distributed among the refugees.

earn /ɜːn $ ɜːrn/ ★★★ S2 W2 vi, vt.
to receive a particular amount of money for the work that you do
He earns nearly £20,000 a year.
earning n.
[countable] received money which is compensated for your work

retain /rɪˈteɪn/ ★★☆ W3 vt.
to keep something or continue to have something
You have the right to retain possession of the goods
to store or keep something inside something else
A lot of information can be retained in you computer.

reserve /rɪˈzɜːv $ -ɜːrv/ ★★★ W3 vt
to arrange for a place in a hotel, restaurant, plane etc to be kept for you to use at a particular time in the future SYN book
I’d like to reserve a table for two.
to keep something so that it can be used by a particular person or for a particular purpose SYN set aside
A separate room is reserved for smokers.
cash reserve n.
an amount of money that is kept to use for a particular purpose in the future.

cash mountain n.
[countable, usually singular] money that a company has available to spend, for example to buy other companies, or to give to shareholders
The group’s cash mountain has shrunk.
cash pile n.
[countable, usually singular] anohter name for cash mountain
The company is sitting on a large cash pile that could be used for acquisitions
be sitting on (= has)

acquisition /ˌækwəˈzɪʃən/ n.
[uncountalbe] the porcess by which you gain knowledge or learn a skill
the acquisition of language
[uncountable] the act of getting land, power, money etc
the acquisition of new sites for development
[countable] something that you have obtained by buying it or being given it
The Art Society is holding an exhibition of recent acquisitions.

Debt and debt problems

Here are some expressions that can be used to talk aobut a company’s debts, or country’s foreign debts:

Expressions
	repayment servicing	when a company repays its debt and/or interest on it; ‘debt repayment’ describes a particular amount repaid
	burden	a company’s debt, especially when considered as a problem
debt	crisis	when a company has serious difficulty repaying its debt
	rescheduling restructuring	when a company persuades lenders to change repayment dates and terms
	default	when a company fails to make a debt repayment

Note
to	reschedule restructure	a debt
to	repay default on sevice	a debt

Turnarrounds and bailouts

Doomco is in financial trouble and it is being described as sick, ailing and troubled. They’ve called in a company doctor, Susan James, an expert in turning round companies. There may be a turnaround and Doomco may recoer. But if there is no recovery, the company may collapse completely. Ms James is currently looking for another company to bail out Doomco by buying it. This would be a bailout

Words

ailing /ˈeɪlɪŋ/ adj.
[usually before noun] an ailing company, organization, or economy is haveing a lot of probelms and is not successful
the ailing car industry.

turn round(= turn around) phv.
if a business, department etc that is not successful turns around, or if someone turns it around, it starts to be successful
The company turned around from losses of £1.4 million last year to profits of £26,800.
turnaround /ˈtɜːnəraʊnd $ ˈtɜːrn-/ n.
a complete change from a bad situation to a good one
the remarkable turnaround in our economy
[singular] the time it thakes to receive something, deal with it and send it back, especially on a plane, ship etc
The average turnaround for a passport application is six working days.

recovery /rɪˈkʌvəri/ ★★☆ W3 n.
[singular, uncountable] the process of returning to a normal condition after a period of truble or difficulty
Hopes of economic recovery are fading.
[singular, uncountable] the process of getting better after an illness, injury etc
Doctors expect him to make a full recovery.

collapse /kəˈlæps/ ★★☆ S3 v.
vi. if a building, wall etc collapses, it falls down suddenly, usually bcause it is weak or damaged
Uncle Ted’s chair collapsed under his weight.
vi. to suddenly fall down or become unconscious because you are ill or weak
He collapsed with a heart attack while he was dancing.
collapse n.
[singular, uncountable] a sudden failure in the way something works, so that it cannot continue
the collapse of the Soviet Union

bail out phv.
something to help someone out of trouble, especially financial problems
Some local businesses have offered to bail out the museum.
bailout n.
[countable] providing money to a person or organization to get them out of financial toruble
Losses totaling hundereds of millions of dollars led to an expensive bailout by its parent company.

Bankruptcy

If a company is in serious financial difficulty, it has to take certain legal steps.

In the US, it may aske a court to give it time to reorganize by failing for bankruptcy protection from creditors, the people it owes money to.

In Britain, a company that is insolvent, i.e. unable to pay its debts, may go into administration, under the management of an outside specialist called an administrator.

If the company cannot be asved, it goes into liquidation or into receivershiop. Receivers are specailists who sell the company’s assets and pay out what they can to creditors.

When this happens, a company is wound up, and it ceases trading.

A company in difficulty that cannot be saved goes bankrupt.

Words

file for phv.
to give a document to court or other organization so that it can be officially recorded and dealt with
The Morrisons have filed for divorce.

bankruptcy /ˈbæŋkrʌptsi/ ★★☆ n.
[countable, uncountable] the state of being unable to pay your debts SYN insolvency
In 1999 it was revealed that he was close to bankruptcy.
bankrupt /ˈbæŋkrʌpt/ ★★☆ adj.
without enough money to pay what you owe SYN insolvent
The firm went bankrupt before the building work was completed.
insolvency /ɪnˈsɒlvənsi-ˈsɑːl-/ n.
[countable, uncountable] a situation in which a person or a company is insolvent
Higher payments could force some banks into insolvency.
insolvent /ɪnˈsɒlvənt $ ɪnˈsɑːl-/ adj.
not having enough money to pay what you owe SYN bankrupt
The company was later declared insolvent.

protection /prəˈtekʃən/ ★★★ S2 W2 n.
[uncountalbe] when someone or something is protected
the protection of the environment

go into something phv.
to start to be ina particular state or condition
She went into labour at midnight and the baby was born at 8 am.
to be spend or used to get make, or do something
Years of research have gone into this book.
to start to do a particular type of job
I always wanted to go into nursing.

administration /ədˌmɪnəˈstreɪʃən/ ★★☆ S3 W3 n.
[uncountable] in Britain and some other countries, when a company in financial difficulty is reorganized by an outside specialist with the aim of continuing some of its activities so that it can avoid liquidation.
The company is currently in administration, but Mr Brown hopes that it will be possible to keep it going in some form.
[uncountable] the activities that are involved in managing the work of a company or organization
We’re looking for someone with experience in administration.
administrator /ədˈmɪnəstreɪtə $ -ər/ ★★☆ n.
[countable] someone who manages a company that has been put into administration.
The company might have to be put into the hands of an administrator.
[countable] someone who manages and organizes the work of a company or organization
He was a superb marketer, but as administrator he was disorganized.
[countable] someone whose job involves managing the work of a company or organization
What follows is an inside look at an arts administrator at work.

liquidation /ˌlɪkwəˈdeɪʃən/ n.
[countable, uncountable] the act of closing a company by selling the things that belng to it, in order to pay its debts
usually used in the form of go into liquidation
Hundreds of small businesses went into liquidation.

receivership /rɪˈsiːvəʃɪp $ -vər-/ n.
[uncountable] if a business is in receivership, it is controlled by an official receiver because it has no money
usually used in the form of go into receivership
The company went into receivership with massive debts.

receiver /rɪˈsiːvə $ -ər/ n.
[countable] BrE someone who is officially in charge of a business or company that is bankrupt
The business is in the hands of the receivers.

wind up phv.
to close down a company or organization
Our operations in Jamaica are being wound up
to bring an activity, meeting etc to an end
OK, just to wind up, could I summarize what we’ve decided?

cease trading
if a company ceases trading, it means that the company stop all business activities.

It is the end of this time : )