Success and failure – Vocabulary and Phrases
to distribute earnings/profits – to divide up a company's profits for a particular period of time and give them to shareholders in the form of dividends or new shares
to retain earnings – to keep the earnings, to continue to have them
Retained earnings are the profits a company has reinvested in itself
to build up cash reserves – to increase cash reserves
In order to build a cash reserve, you have to make it a priority.
to sit on a cash pile/mountain – money that a company has available to spend, for example to buy other companies, or to give to shareholders
Lonrho is sitting on a large cash pile that could be used for acquisitions.
debt repayment/to repay a debt – to pay back (by a lender to a creditor)
The Akron tire maker said this morning at an investors conference that it also will accelerate plans to repay high-cost debt
debt burden – obligation to pay a debt
First, annual budget deficit figures, which are cited frequently by budget watchers, say little about the nation’s truedebt burden and its ability to finance this debt.
debt crisis – a period when many companies / individuals are not able to pay their debts
The Latin American debt crisis refers to a period in the early 1980s (and for some countries starting in the 1970s), often known as the "lost decade", where countries in the region reached a point where their foreign debt exceeded their earning power and they were not able to repay it.
debt restructuring – A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage.
Companies use debt restructuring to avoid default on existing debt or to take advantage of a lower interest rate.
debt default/to default on a debt – Debt default occurs when the borrower is unable to make a scheduled payment of interest or principal.
After the debt default, Argentine economy was in deepest-ever recession
to service debt – to make interest payments on the debt
Your monthly mortgage payments are a good example of debt service.
to turn round a company
turnaround – A situation where a company, who has had poor performance for an extended period of time, experiences a positive reversal.
A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company.
to collapse – to break down
The coming financial collapse of the US government: Fed papers reveal what's in store for Americans.
to file for bankruptcy protection – An attempt to "reorganize" its business and try to become profitable again. Management continues to run the day-to-day business operations but all significant business decisions must be approved by a bankruptcy court.
When a troubled business is unable to service its debt or pay its creditors, it or its creditors can file with a federal bankruptcy court for protection
to face bankruptcy – to deal with inability to pay debts
Delta may face bankruptcy - report from Airline Industry Information in Array provided free by LookSmart Find Articles.
to go into liquidation – the company stops all operations and goes completely out of business. A trustee is appointed to "liquidate" (sell) the company's assets and the money is used to pay off the debt, which may include debts to creditors and investors.
Structured Credit Company, a Dublin-based financial firm, went into liquidation yesterday with over €250m in debts.
to cease trading – to stop business operations
The holiday chalets where a six-year-old girl was savaged by two dogs ceases trading for the rest of the year.
to wind up a company – to liquidate a company
Rising prices and falling sales have forced us to wind up the business.
to go bankrupt – to go out of business as an attempt to try to recover from a crippling debt
If you cannot pay your debts, and have been unable to come to a compromise or arrangement with your creditors, then you may decide to go bankrupt.
to protect from creditors – laws to protect companies that are in financial difficulty, limiting payments they have to make to creditors
If the company does not file for bankruptcy protection, it faces a major problem on June 15, when its payments are due.
debtor – a person, organization, or country that owes money
to bankrupt – to make a person, business or country go bankrupt
The new legislation would help restore pride in farming without bankrupting farmers in the process.
to go bust – if a business goes bust, it cannot continue to operate because it does not have enough money to pay its debts
International Investments Ltd eventually went bust leaving debts of $7 million.
a liquidator/receiver – a professional person or organization whose job is liquidating companies in financial difficulty
The liquidators are unlikely to pay more than 10 cents on every dollar owed by the failed bank.
to write off a debt – to provide a debt relief
If they can't recover the losses, they may be forced to write them off.
takeover – the act of getting control of a company by buying over 50% of its shares
To avoid a takeover, Carbide went deeply in debt to pay a huge special dividend.
acquisition – When one company purchases a majority interest in the acquired.
Acquisitions can be either friendly or unfriendly. Friendly acquisitions occur when the target firm agrees to be acquired; unfriendly acquisitions don't have the same agreement from the target firm.
insolvency/to be insolvent – a situation in which a person or a company does not have enough money to pay their debts
The number of insolvencies in the real estate tripled last year.
to be solvent – to have enough money to pay your debts at the time they must be paid
Large companies that you think are solvent may not be.