Reading Exercise:
Financial English Part 1
In financial English, the passive voice is used constantly in formal writing and reporting, often more than in everyday English. When you write "The invoice has been approved" or "Expenses are processed monthly", you sound professional and natural. Native speakers use it because it puts the focus on the action, not the person doing it. Try replacing active sentences in your next work email with passive ones and notice the difference in tone.
One thing that trips up many learners is the difference between similar-sounding terms. Revenue is not the same as profit; a company can have high revenue and still make a loss if expenses are too high. And an invoice is not the same as a receipt; one requests payment, the other confirms it. Getting these distinctions right will immediately make you sound more confident in financial conversations.
Read the passage
Understanding Financial Statements
Every year, companies prepare a set of financial statements to show how the business has performed. The most important of these is the balance sheet, which gives a snapshot of the company's financial position at a specific point in time. It lists the company's assets, everything it owns, its liabilities, and everything it owes. The difference between the two is known as equity.
Another key document is the profit and loss statement, which shows the company's revenue and expenses over a given period. If revenue exceeds expenses, the company makes a profit. If expenses are higher than revenue, the result is a loss. Finance teams use this information to prepare a forecast for the following year, predicting how much revenue the company expects to earn and what its expenses are likely to be.
To ensure that all financial records are accurate, most companies undergo an annual audit. This is an independent review carried out by an auditor, who checks that the figures are correct and that the company is complying with financial regulations. Once the audit is complete, the results are approved by the board and shared with key stakeholders.