Text Vocabulary

Headline the first text below.

Translate the following texts into Russian.

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Companies need finance for four main reasons:

1. Working capital for stocks and work in progress.

2. Cash to finance trade credit.

3. Funds to replace plant and equipment.

4. Capital for new investment.

Companies can meet these needs by internal financing – maintaining a liquidity cushion and/ or retaining profits rather than distributing them to shareholders. Alternatively, they can use external financing – they can borrow from banks, issue debt, or issue shares. The choice of financing method will clearly be constrained by availability of different forms of finance, but there are other factors which have a greater influence on company’s decisions.

working capital	оборотный капитал	These included, for example, management of working capital, product differentiation and cost management.
work in progress	незавершенное производство	Work in progress indicates any good that is not considered to be a final product.
plant and equipment	основной капитал	We have more Plant & Equipment for sale in other states.
internal financing	внутреннее финансирование	External financing is the phrase used to describe funds that firms obtain from outside of the firm.
shareholder	акционер	The state of shareholder inactivity that results from these factors, it is argued, enables managers to pursue objectives of their own choosing.
external financing	внешнее финансирование	External financing is the phrase used to describe funds that firms obtain from outside of the firm.
to issue	выпускать (акции, облигации)	Companies may issue bonds or shares to investors as a method of financing the business.

y The Capital Market & Stock Exchanges

The capital market is concerned with the provision of long-term finance for both private and public sector (primary market activity), as well as the trading of existing bonds and equities (secondary market activity). The Stock Exchange is the traditional centre of the capital market.

There are thousands of stocks, but shares of the largest, best-known, and most actively traded corporations generally are listed on the New York Stock Exchange (NYSE). The exchange dates its origin back to 1792, when a group of stockbrokers gathered under a buttonwood tree on Wall Street in New York City to make some rules to govern stock buying and selling. By the late 1990s, the NYSE listed some 3,600 different stocks. The exchange has over 1,300 members, or "seats," which are bought by brokerage houses at hefty prices and are used for buying and selling stocks for the public. Information travels electronically between brokerage offices and the exchange, which requires 200 miles (320 kilometers) of fiber-optic cable and 8,000 phone connections to handle quotes and orders.

How are stocks traded? Suppose a school teacher in California wants to take an ocean cruise. To finance the trip, she decides to sell 100 shares of stock she owns in General Motors Corporation. So she calls her broker and directs him to sell the shares at the best price he can get. At the same time, an engineer in Florida decides to use some of his savings to buy 100 GM shares, so he calls his broker and places a "buy" order for 100 shares at the market price. Both brokers wire their orders to the NYSE, where their representatives negotiate the transaction. All this can occur in less than a minute. In the end, the schoolteacher gets her cash and the engineer gets his stock, and both pay their brokers a commission. The transaction, like all others handled on the exchange, is carried out in public, and the results are sent electronically to every brokerage office in the nation.

Stock exchange "specialists" play a crucial role in the process, helping to keep an orderly market by deftly matching buy and sell orders. If necessary, specialists buy or sell stock themselves when there is a paucity of either buyers or sellers.

The smaller American Stock Exchange, which lists numerous energy industry-related stocks, operates in much the same way and is located in the same Wall Street area as the New York exchange. Other large U.S. cities host smaller, regional stock exchanges.

The largest number of different stocks and bonds traded are traded on the National Association of Securities Dealers Automated Quotation system, or Nasdaq. This so-called over-the-counter exchange, which handles trading in over 5,000 stocks, is not located in any one place; rather, it is an electronic communications network of stock and bond dealers. The National Association of Securities Dealers, which oversees the over-the-counter market, has the power to expel companies or dealers that it determines are dishonest or insolvent. Because many of the stocks traded in this market are from smaller and less stable companies, the Nasdaq is considered a riskier market than either of the major stock exchanges. But it offers many opportunities for investors. By the 1990s, many of the fastest growing high-technology stocks were traded on the Nasdaq.

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