Английский язык. Практический курс для решения бизнес-задач

1. Why should today’s business leaders be able to understand how to create, measure, manage and deliver shareholder value? 2. What does the term «cost of capital» mean? 3. What forms do returns to shareholders usually take? 4. Why is it undesirable for managers to irritate shareholders? 5. What is the essence of value-based management? 6. Why is shareholder value becoming increasingly popular? 7. What does NPV mean? 7. What should companies wishing to deliver and maximize shareholder value focus on? 8. What are the best-known metrics of created shareholder value? 9. What is BP famous for and how does it consistently manage to be near the top of the shareholder value league tables?

Exercise 2*. Which of the following statements are not correct and why?

1. Most organizations successfully translate the aim of delivering shareholder value into reality. 2. Today’s business leaders must be able to understand how to create, measure, manage and deliver shareholder value. 3. The returns to shareholders can take the form of dividends and growth in the value of their shares. 4. Lloyds Bank adopted a value-based management approach in the mid-1980s and, as a result, its shares showed significant underperformance in relation to its peers. 5. Shareholder value became a business mantra in the 1990s, but its popularity is likely to fade in the new millennium. 6. What gets measured gets done. 7. NPV represents the «present value» of the future cash flows. 8. It is possible for investors to study the accounts of companies and to infer from them whether value has been added or destroyed. 9. BP is rarely able to deliver high shareholder value. 10. Absolute growth in TSR is deemed by BP to be sufficient. 11. The organizational structure of BP is deliberately flat. 12. The business units within BP compete against each other for capital allocation. 13. The system of remuneration in BP is such that it is enough for managers to deliver TSR, earnings growth or ROCE in isolation.

Exercise 3*. Find terms in the text that match definitions given below and make sentences of your own with each term.

1. an oral, written, or signaled communication sent from a person to another; an inspired communication to be delivered to the world

2. minimum level of return required by the providers of capital

3. the proportion of profit or gain made by a corporation, which is divided among the stockholders

4. the act or manner of exhibiting an art, skill or capacity; the degree to which anything functions as intended

5. one of the same rank or qualities; an equal

6. the «present value» of the future cash flows less the original cost of the investment

7. an increase in value or worth

8. a measure of return (or profit) earned by the company in a period after deducting a charge for the cost of capital employed within the business

9. a market where securities are traded

Exercise 4*. Fill in the blanks using terms given below.

Value-based Management inThyssenKrupp Group

The ThyssenKrupp Group is managed and controlled on the basis of an Economic Value Added («EVA») management system. The key goal of this system is to maintain continuous increases in……… by focusing on business……… which – with respect to their performance – are among the best………. To achieve this objective, an integrated controlling concept is………. It allows for……… controlling and coordination of activities of all segments, supports………. responsibility and promotes overall transparency.

By taking timely appropriate actions, the integrated controlling concept realizes the increase of corporate value by bridging operating and strategic……….. between the actual and……… situation. The prerequisite for this concept is the existence of high quality operational and strategic reporting systems for the accounting of actual and………. results as well as internal and external…………

In the ThyssenKrupp controlling concept, strategic and operational elements are………. to timely reporting which is accompanied by regular………. communication. The concrete elements of this strategy are: economic value added performance measures and active portfolio management.

The central performance measures are return on capital employed (ROCE) and Economic Value Added (EVA). These two ratios reflect the……… of capital employed in the form of a relative quantity (ROCE) and an absolute value (EVA).

ROCE is calculated as follows:

ROCE = incomebeforeincometaxes, minority interest and interest/ capital employed