Progress test 3 (Units 5–6)

Name: __________________________________________ Date: ___________

Section 1: Vocabulary

1 Match these departments to their responsibilities a–j.

Corporate Banking: (1) _____, (2) _____
Private Banking: (3) _____
Group Risk: (4) _____, (5) _____
Retail Banking: (6) _____
Internal Audit: (7) _____
Human Resources: (8) _____

a) preparing the annual risk report for the board

b) overseeing the everyday banking needs and standard products for the customers
c) recruiting new staff and organising training
d) looking at companies’ financial documents like income statements and balance sheets
e) checking the work of the other departments
f) creating tailor-made products such as credit lines for companies
g) managing investments and portfolios
h) helping the board decide on future strategies

Section 2: Language

1 Choose the correct words in italics.

1 The company had / has had cash flow problems last year.
2 The Loan Modification Department is involved in help / helping customers who cannot pay their
debts back on time.
3 A meeting sets up / was set up to discuss the problems in the company.
4 They discover / discovered that the billing period was too long.
5 The manager can / may be able to see us tomorrow.
6 These assets are converted / are going to be converted into cash next year.
7 We require our customers to show / showing us their income statements, balance sheets and cash
flow statements.
8 Our Accounting Department prepares / has prepared all our financial documents since we began
the business.

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Section 3: Reading

1 Read this text and answer the questions. Write full sentences.
Corporate customers who want to borrow large amounts of money come to the Corporate
Banking Department in our bank. They have to have a good credit rating and collateral if they
want to arrange a loan. This can be land or other assets. They should bring along all their
financial documents like the income statement, balance sheet and cash flow statement. The
corporate banker will look at their current assets and non-current assets to see what the
company owns. Then the banker will look at the liabilities to see how much the company owes.
He or she will also look at the shareholders’ equity to see how much money has been invested
in the company by selling shares. It is also important to see the retained earnings. This is the
money the company uses for their business or to pay debts.
The banker will also want to see the income statement. This shows the bank how much the
company earned and what they spent in a period of time. If the operating revenues were higher
than their operating expenses, they made a profit. But if the operating revenues were lower,
they made a loss. The banker may also want to know about depreciation (loss in value for
tangible assets) or amortisation (loss in value for intangible assets). He or she will also look at
the net profit or how much the company kept after paying all the expenses.
Finally, the banker will look at the cash flow statement. This is where he or she can see if the
company has generated cash in the last year. This statement shows how money comes in and
goes out of the company. It is very important for the bank as it shows if the company can pay
its bills.

1 What are two things a company needs if it wants to borrow a lot of money?
________________________________________________________________________
2 What can be used as collateral?
________________________________________________________________________
3 What does a banker find out from the current and non-current assets?
________________________________________________________________________
4 What does the shareholders’ equity show?
________________________________________________________________________
5 What do companies use their retained earnings for?
________________________________________________________________________
6 What does a bank find out by looking at the income statement?
________________________________________________________________________
7 What is depreciation?
________________________________________________________________________
8 Why is the cash flow statement important for the bank?
________________________________________________________________________

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Section 4: Writing

1 You are Julian Carol. Write a letter to your banker, Joan Smith. Use this information and
the template below to write your letter.
1 introduce yourself as customer (have account at Atlantic bank)
2 writing because you have cash flow problem in your business
3 explain you would like to talk to her – make appointment
4 problem 1: some customers pay late
5 problem 2: cancelled orders three months ago – lost money
6 problem 3: interest on overdraft – high
7 just prepared new income statement, balance sheet, cash flow statement – can bring them to
discuss with her
8 say you would like appointment next week (Does banker have time?)

Dear Ms Smith,
(1) ________________________________________________________________________
(2) ________________________________________________________________________
(3) ________________________________________________________________________
(4) ________________________________________________________________________
(5) ________________________________________________________________________
(6) ________________________________________________________________________
(7) ________________________________________________________________________
(8) ________________________________________________________________________
I look forward to hearing from you.
Yours sincerely,
Julian Carol

Section 5: Listening

1 ► 18 Listen to Steve Jones talking about cash flow in his company and complete this text.
Steve’s most recent event was to promote a new type of (1) ____________ . The event cost
€25,000 and in January they got (2) ____________ . The video they started to make cost
(3) ____________ . They had problems with the photo shoot because of (4) ____________ .
They also needed someone to be in charge of the evening. They found someone but he got
another job, so they had to pay (5) ____________ for a new person. In April they needed to
use their (6) ____________ and had to pay €150 in interest. When another client suddenly
cancelled, they had to talk to their bank about a(n) (7) ____________ . In June they found
out that only (8) ____________ of the guests were coming but they couldn’t cancel the food,
so they lost €1,500. In the end, the event was a big success, so they were happy as they also
made a profit.

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