Unit 7: Mergers and Acquisitions

7.2. Business performance

(pp. 86-87)
In the black/
in the red?

Which
Go under / go bankrupt company?
Go to the wall?

Cover costs/
break even?
• be in the black
If a bank account is in the black, it contains some
money, and if a person or business is in the black, they
have money in the bank and are not in debt.
• be in the red informal
If you or your bank account are in the red, you owe
money to the bank.
• Cover costs
to produce enough money in sales to pay for the costs
of production
Ex: The sales revenue barely covers the costs of advertising or the
manufacturing costs.
• break even
to have no profit or loss at the end of especially a
business activity
Ex:After paying for our travel costs, we barely (= only
just) broke even.
• go under informal
If a company goes under, it is unsuccessful and has to
stop doing business
Ex: Thousands of companies went under during the
recession.
• go to the wall
If a company goes to the wall it is destroyed
financially
Ex: After nine months of massive losses the
company finally went to the wall.
ANSWERS:
1.H
2.G
3.C
4.B
5.D
6.E
7.A
8.F
• Increase : jump, rise, double,
peak, climb, reach a high
• Decrease: fall, slide,
dip,slump, drop, deteriorate
• Stable: stabilize, level off
• Other: fluctuate, vary
• variable cost noun [C]
(Accounting)
• an amount of money used to produce goods that
varies according to the quantity made:
• Ex: Fuel consumption is a variable cost. By cutting our
fixed costs we can concentrate on controlling our
variable costs.
• book value noun [U; C, usually sing.] (abbr BV)
• the value of a company as shown in its financial
records, which is its assets minus its liabilities (=
the money that it owes):
• Ex: The group is hoping to sell the business for more
than its current book value.
• liquidity (n) (Finance)
• the state of owning cash or things of value that
can easily be exchanged for cash in order to
pay debts, etc:
• Asset sales are intended to improve the
company’s liquidity.
• The commercial banks' liquidity is
recovering.
• The group does not have sufficient liquidity to
fund its operations.
ANSWERS:
Exercise 2:
1.C 
2.G 
3.F 
4.A 
5.B 
6.D  + 
7.H 
8.E 
Exercise 3:

1.B (Sales increased to $3M.)

2.A (There was a decrease of 10%.)

3.A (Prices fell by €15.)

4.B (There was a rise from 30%.)

• joint venture noun [C]
• a new business that is started by two or more
companies, often in the form of an independent
company whose shares they own; the product or
service that the business sells or provides:
• The French company has a joint venture with
Dongfeng Motor in China.
• The two firms plan to launch a 50-50 joint venture (=
one which they each own half of).
• setting up a joint venture to build a new small car
• Sharply : quickly and suddenly
• Dramatically : suddenly or obviously
• Raid (n)
• an occasion when a person or company
unexpectedly tries to take control of another
company by buying a large number of its shares:
• In 1999 he made a successful raid on
Telecom Italia.
 Economies of scale
• Internal economies of scale cost
reduction due to technological and
management factors
• External economies of scale: cost
reduction due to the effect of
technology in an industry.
Exercise 4:
1.D
2.A
3.B
4.C
5.H
6.E
7.F
8.G
Exercise 5/87:
Verb + adverb: (-) => (+)
- (-) grow slightly =>improve significantly =>
go up sharply => shoot up dramatically (+)

- Adjective + noun: (-) => (+)

- (-) a slight increase => moderate growth =>
a considerable improvement => a sudden
surge (+)
Exercise 6:
1.Due to / as a consequence of / as a result of /
because of
2.Resulted in
3.As a result / as a consequence
4.Thanks to / due to / as a consequence of / as
a result of / because of
5.Resulted in
6.As a result / as a consequence
Phrases explain causes:
=> Due to, as a consequence of, as a result of,
because of, thanks to

Phrases introduce effects:

=> Resulted in, as a result, as a consequence
 Complete the sentences
1. I didn’t finish the report on time; as a result
.
2. Thanks to , I got the promotion I
wanted.
3. As a consequence of the takeover, my
department .
4. Due to , I had to relocate to London
5. Because of , I decided to look for another
job.
Exercise 7: Listening for detail
- In 1988 the share was $15.
- In 1989 it dropped suddenly to $12.
- In 1991 it reached $50.
- In 1995 the stock price soared to $65.
- The exception of temporary dips to $50 in
2001 and $59 in 2006.
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AXIS

HORIZONTAL AXIS