How Stocks and the Stock Market Work

The stock market appears in the news get highlights everyday since it is one of the most lucrative high risk high profit business as it reaches a new high or a new low, and you also hear about it daily in statements like "The Dow Jones Industrial Average rose 2 percent today, with advances leading declines by certain margin of..."
Do you have these questions on your mind?
What is a stock? 
What is a stock market? 
Why do we need a stock market? 
Where does the stock come from to begin with, and why do people want to buy and sell it?
Then this article will open your eyes to a whole new world!

consider you bought a building buy all the kitchen equipment, tables and chairs that you need, buy your supplies and hire your cooks, servers, etc.Then you made advertisement and started a restaurant business.
You spent $500,000 buying the building and the equipment.
In the first year, you spent $250,000 on supplies, food and the payroll for your employees.
At the end of your first year, you add up all of the money you have received from customers and find that your total income is $300,000.

Since you have made $300,000 and paid out the $250,000 for expenses, your net profit is:
$300,000 (income) - $250,000 (expense) = $50,000 (profit)

At the end of the second year, you bring in $325,000 and your expenses remain the same, for a net profit of $75,000. At this point, you decide that you want to sell the business. What is it worth?

One way to look at it is to say that the business is "worth" $500,000. If you close the restaurant, you can sell the building, the equipment and everything else and get $500,000. This is a simplification, of course -- the building probably went up in value, and the equipment went down because it is now used. Let's just say that things balance out to $500,000. This is the asset value, or book value, of the business -- the value of all of the business's assets if you sold them outright today.