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The Stock Market

The Stock Market. 1.1 Business Organization. How Do Businesses Start?. What is the number one thing you need to be able to start any type of business? MONEY!!! The money used to start or expand a business is call capital. How are businesses owned?.

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The Stock Market

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  1. The Stock Market 1.1 Business Organization

  2. How Do Businesses Start? • What is the number one thing you need to be able to start any type of business? • MONEY!!! • The money used to start or expand a business is call capital

  3. How are businesses owned? • If the business is owned by one person, it is called a sole proprietorship. The owner is also referred to as the proprietor. • Ex: Whitney’s Auto and RV • The money left after all of the expenses are paid is called profit. • In a sole proprietorship the owner is entitled to all of the profit • The owner is also responsible, or personally liable for any losses. • The owner is responsible for all of the bills even if there is no profit made

  4. Business Partners? • A business that is owned by a group of people, called partners, is a partnership • Ex: Cronie’s • Partners share profits and responsibilities for any losses

  5. Corporation • A corporation is a business organization that can be owned by one person or a group of people • Share holders have limited liability, meaning each owner cannot lose more than the value of his or her share in the business • Each owner who invests money in the corporation receives shares of stock in the corporation • The owners of stock are called stockholders • Stock Certificates are used as proof of ownership • When anyone can buy stock in a corporation it is called a public corporation

  6. Where does the math come in? • When a business is owned by more than one person, the owners do not necessarily own the same portions of the business • Ratios and percents are used to represent the financial responsibilities of owners and partners • Remember: • To convert a decimal to percent, mult by 100 (move decimal to right 2 places) • To convert percent to a decimal, divide by 100 (move decimal to left two places)

  7. Example 1 • Michelle invests $15,000 in a partnership that has four other partners. The total investment of all partners is $240,000. What percent of the business does Michelle own??

  8. Example 2 • The total number of shares of stock in the Bulls Corporation is 650,000. Mike owns 12% of the shares. How many shares of Bulls Corporation stock does he own?

  9. Example 3 • Three partners are investing a total of $900,000 to open a garden and landscaping store. Their investments are in the ratio 2:3:5. How much does the partner that invested the least contribute?

  10. Example 4 • Two partners each invest 35% in a startup business. They need to find another investor for the rest of the money. What percent of the business will that person own? Write a ratio to represent the investments of the business.

  11. 1.2 Stock Market Data • What is a stock market??? • A general term for an institution through which stocks are bought and sold • EX: New York Stock Exchange (NYSE) • EX: National Association of Securities Dealers Automated Quotation System (NASDAQ) • Stock market transactions are called trades

  12. Take out a separate piece of paper and answer the following questions with your group • Where have you heard the word trend used before? • How might trends be important when following the stock market? • What makes an Internet site credible? • Name credible Internet sources for financial information. • What is a stock trade? • Why is net change an important stock statistic?

  13. Ch 1 Asnmt 1 • Pg. 7 #3 – 18

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