UNIVERSITY OF ILLINOIS BULLETIN Issuep WEEKLY August 28. 1628 VoL. XXV "Entered as second-class matter December 11, 1912, at the post office at Urbana, Illinois, under the Act of August 24, 1912. Acceptance for mailing at the special rate of postage provided for in section 1103, Act of October 3, 1917, authorized July 31, 1918.7 BUREAU OF BUSINESS RESEARCH COLLEGE OF COMMERCE AND BUSINESS ADMINISTRATION BULLETIN NO. 20 (Distributed, Tuly, 1928) THE SOURCES OF PUBLIC UTILITY CAPITAL = ikriacd ® 7h PRICE 50 CENTS PUBLISHED BY THE UNIVERSITY OF ILLINOIS, URBANA 1028 [t is the purpose of the Bureau of Business Re- search of the University of Illinois— (1) to study and as far as possible to ex- plain economic and industrial conditions within the State: (2) to direct attention to experience-tested practices of good business management : and. (3) to investigate methods for securing the best executive control of business. BUREAU OF BUSINESS RESEARCH Cumas. M, TuaoMpsoN, Ph.D., LL.D., Director A. C. LirtLeroN, A.M., C.P.A., Assistant Director BULLETIN NO. 20 THE SOURCES OF PUBLIC UTILITY CAPITAL PUBLISHED BY THE UNIVERSITY OF ILLINOIS, URBANA 1928 BE = Ty en Ww om 5 ~ > ad Sor ILLINOSS! P cis T we PREFACE In the preface of Bulletin No. 9, the first of the series of studies in Public Utility ratios, the following statement was made: “The use- fulness of financial ratios depends somewhat upon the opportunity which individual companies have of comparing their own recent ratios with other similar ratios as standards. There are two ways in which a serviceable ‘standard’ for comparison may be obtained. The indi- vidual enterprise may calculate ratios for its business over a sufficiently long period of time to develop in the minds of its executives an ap- proximate ‘standard’ for their own enterprise. On the other hand, the attempt may be made to present a reasonable standard figure for the industry as a whole, so that individuals may compare their own ratios with a so-called ‘standard-of-the-industry’ ratio.” The Bureau is attempting in these studies to derive reasonable “standard-of-the-industry” ratios by tabulating data in sufficient quan- tities to permit the determination of modes; i.e. averages about which the ratios tend to concentrate. These averages may then be used as the best available standard ratios. To obtain the mode exactly on the basis of given data arranged in a frequency distribution, it is necessary to obtain the frequency curve. The highest ordinate of this curve yields the theoretical mode. It was felt, however, that for the purposes of this study, the approximated modes would yield a sufficiently accurate figure to indicate character- istic financial ratios. Determination of the respective modes by both methods disclosed the fact that ordinarily the approximation yielded results which are quite close to the more accurately calculated figures. The formula used is Pe + fe where / equals lower limit of the modal group ¢ equals class interval fc equals the frequency of the next higher class interval fc equals the frequency of the next lower class interval Some small degree of error is introduced by the use of such an approximation, and a slight adjustment of the modes is required in order that the ratios for the various groups will add up to 1.00. The modal ratios presented cannot be considered as ideal. They are rather —— eee . *Appendix A, Bulletin No. 18, Bureau of Business Research, University of linois. to be thought of as “typical”’—as expressive of the central tendencies found in the two hundred companies studied. Those companies, it may be noted, include more than half of the total investments in the gas. electric, and traction industry. This study (the sixth of the series) takes up the Sources of Capital of Public Utilities, completing the picture of the typical balance sheet set-up as given in Bulletin No. 18, wherein the Property Invest- ments were analyzed. The six ratios to which this study is devoted are: Long Term Debt to Total Equities? Current Liabilities to Total Equities Capital Stock to Total Equities Preferred Stock to Total Equities Common Stock to Total Equities Surplus and Reserves to Total Equities The ratios of Preferred Stock and Common Stock are subdivisions of the ratio of Capital Stock to Total Equities. These two ratios (Pre- ferred Stock and Common Stock) are not considered in the same detail as the other ratios, although complete tables will be found in the Ap- pendix, Following the outlines of the preceding bulletins of this series, the data have been broken down into sub-classes by: (1) geographical location of the company, (2) size of company, (3) different years in the business cycle, and (4) type of operative activity of the company. In this manner, the ratios are analyzed under varying conditions, and the effects thereon, if any, are brought out. In accordance with the policy followed throughout this series of bulletins, no effort is made to explain the underlying economic causes which might account for any differences brought out by the analyses of the data. Acknowledgment is made of the indebtedness to A. H. Winakor, C.P.A., for the preparation of the manuscript of this number of the series planned by A. C. Littleton, C.P.A., Assistant Director, and to the Bureau staff generally for their efficient help. *Total Equities” is used in this bulletin in place of the term “Total Assets” which was used in previous bulletins of this series, in order to avoid possible confusion which may arise from accounting terminology. I. THE RATIO OF LONG TERM DEBT TO TOTAL EQUITIES A good indication of the stability of the utility industry is found in the large funded debt appearing in the ordinary public utility com- pany’s financial statement. The utility industry is an industry using large fixed assets and having relatively stable earnings. To a great extent, it is these two factors which make possible the load of long term obligations. In the following pages, the proportion of the total equities which is provided by this type of financing is discussed with the aid of bar charts showing the concentration of the ratios about certain average figures. The height of these bars is proportional to the number of cases in the groups, thereby showing at which point the greatest con- centration of cases takes place. An average figure, representative of the greatest number of cases in the distribution, is then calculated and is used as an aid to discussion. This average, which is representative of a greater number of cases than any other average, is the mode. Out of a total of 1,581 cases examined, 110 had no ratios of long term debt, 4 had a ratio of less than .02, and 20 had a ratio of over .80.2 The remaining 1,447 cases, shown in Chart la, have been grouped in 6 per cent intervals, beginning with .02. The type of the distribution is of interest in that it indicates that there is a fairly uniform dis- tribution of cases in the four highest bars. The highest bar contains 15 per cent of all the cases, which means that 15 per cent of all the cases had a ratio between 44 and 499. The mode (average) is located in this bar, being .481. The degree to which this average is typical of the cases analyzed can be further measured by the percentage of cases concentrated about the mode in the three highest bars. which. for this distribution. is 44 per cent. THE GEOGRAPHICAL DISTRIBUTIONS Distributions of the data for those companies in the East, Middle West, West, and South are shown graphically in Chart 1b. Differences are at once apparent in the spread and height of the distributions — Preferred stock was classified as a long term debt in those few cases where it was preferred both as to assets and dividends. cumulative, and non- voting, ‘The cases in the class interval containing the mode and the cases in the ‘wo class intervals immediately adjacent to the modal interval are included in his percentage. In the following tables the three class intervals are included for each distribution. °For the basis of these geographical divisions see Bulletin No. 9, The Cur- ent Ratio in Public Utility Companies, Bureau of Business Research, University 01 Tilinois. Burrerin No. 20 Bureau of Business Research University of Hlinois D Ny LE 3 & Avaroge (Mode) 48] RQ R w, Q 1) 4 nN % 8 Pre “ls s 8 2 4 28 333 38 88 5 8 + 8 & 8 3 ¥ 2 os 8d Aarios Expressed as Fercenrages CHART 1A—FREQUENCY DISTRIBUTION OF THE LonG-TerM-DEBT-T0-TOTAL- Equities Ratios or Pusric UriLrry COMPANIES. 1015-1924 The approximated modes and the concentration of cases abou these modes are: Middle Entire East West West South U.S. Modal ratio. ...................... .484 .469 .401 .484 .481 Concentration about the mode....... 37% 529, 349%, 63% 449, The ranges in the ratios and in the percentages are wide. If the data for each section of the country are arranged according to the size of the ratio, the result is as follows: Middle West. . ....ooviiii iii, South. .........oviinn... I East... Ratio (Mode) .401 .469 484 A484 Concentration About Mode 349, 529, 639%, 379, Tue Sources oF PusLic UriLity CAPITAL 3p Li _r llinois bh "ws of v | \ 5 10 » Hh < Averaqe ___. Averaqe (Mode ) (Mode. 484 469 Average Averaqe (Made) (Mode) 401 484 }! N phos. BEE gc gE F 88RAREE Lead Pr Exh BRO Y sYEBIEE BEE REE East ’ Middle West West South Ratios £vnressed as Percentages Crart 13B—FREQUENCY DISTRIBUTIONS OF THE LoNG-TERM-DERT-TO-TOTAL- Eouiries Ratios oF PusLic UtiLity COMPANIES BY GEOGRAPHICAL DISTRICTS The low ratio for the West and the high modal ratio for the East are less typical of their respective distributions than the ratios of the Middle West and South. This is shown by the percentages of con- centration for the four sections of the country. Although the South has just as high a ratio as the East, there is great dissimilarity in their percentages of concentration. It should be borne in mind here that not only are these ratios of long term debt indicative of the proportion of total equities obtained from long term obligations, but they are conversely a measure of the proportion of the total equities devoted to the net worth, since the current liabilities are uniformly small in the utility industry. Thus where the ratio of long term debt is small, the ratios constituting the net worth will be large, and vice versa. DISTRIBUTIONS BY SIZE OF COMPANIES The amount of the total equities of the companies were also used as a basis for the division of the data; the companies were classified into those having 5-9 million dollars of equities, 10-49 million dollars BuLrerin No. 20 Tne OF ysiness Nesearce wh gig of Hlineis on 1" Averaqe (Mode) ADT Averaqe Mode? 415 Average (Moda) 530 ~ x N 0 ) A y £ . ; ox woe. on 8 aE sor R28 FF BF Liaw $F Erdmoegoyox 5-9 Millions of Assets 10-49 Milliens of Assets 50 Millions or over of Asset Ratios Expressed as Fercentages CHART 1c—FREQUENCY DISTRIBUTIONS OF THE LonG-TeRM-DEBT-10-TOTAL- Equities Ratios oF PusLic UriLity COMPANIES BY S17E oF COMPANY of equities, and 50 million dollars of equities and over. The distribu- tion for these divisions are shown in Chart lc. The large companies have a greater proportion of their capital provided by bonds than the smaller companies, but they are in a position to risk trading on a smaller equity, The approximated modes for these sizes and the per- centages of cases concentrated about these modes are as follows : Companies with ~~ Companies with Companies with Total Equities Total Equities Total Equities of 5-9 of 10-49 of 50 mallions millions millions and over Modal ratio. ................ .407 .475 .530 Concentration about the mode. 449, 519%, 449, While these figures show that the larger companies assume greater bonded indebtedness than smaller companies, they also show that there is a greater degree of uniformity of policy in the moderate size com- panies than the others, as shown by the percentages of cases which approximate the modal ratio. Stated differently, the modal ratios in the small and large companies are less typical than the ratio for the companies with 10-49 millions of equities. Tue Sources or PueLic UriLity CaPITAL DISTRIBUTIONS BY KIND OF COMPANY Distributions of the data according to type of operative activity are given in Table Id, Appendix (no chart is given).® Three broad types were chosen: Gas and Electric, Traction, and Holding Com- panies. The modes calculated for these three distributions, and the degree in which they are typical of their respective cases, are as fol- lows : Gas ond Electric Traction Holding .508 .420 .473 43% 429, 49% The Traction Companies have the lowest ratio, followed by the Holding Companies, and Gas and Electric Companies. The ratio for the Gas and Electric Companies is .088 higher than the Traction Com- panies, indicating that the former borrow more of their funds through bonds than the latter. DISTRIBUTIONS BY TYPE YEARS The last analysis which was made of the ratio of long term debt is for selected years covered by the study. Distributions and the modes for four of these years are given in Table Ie. The years chosen are: 1917, a war year with high prosperity; 1919, a fairly normal year with increasing business activity; 1921, a year of depression and declining activity ; and 1924, a recent year of prosperity and normal activity.’ For these selected vears. the modes and percentages are as follows: Modal ratio. .................... Concentration about the mode... ... 1917 .429 4507 1919 1921 1924 .478 .495 .480 4097, 4767, 4997 In these sample years there has been a movement of cases from the lower ratios to the higher ratios. This can be shown by following the trend of cases in one or more class intervals. Percentage of casesin the ratio group: 1077 30-870 cup pemirapnrrswnsivne S100 50-.559.......... SE A Qo TT WA) 1921 1924 139, 129, 179, 169, The class interval, .32-.379, which is below the modal ratios shows that the cases are decreasing in these ratios, while the second group having ratios of .50-.559 shows an increasing number of cases. This might indicate that more companies are burdening themselves with larger bonded indebtedness with the passing of time, although the *In those instances where no charts are given, reference is made to the tables of frequency distributions in the Appendix. "Following the indications of the Harvard B Curve. MN BurLLeTiN No. 20 modal ratio after reaching the “peak” of 495 in 1921 declined to .480 by 1924. SUMMARY OF THE LONG TERM DEBT RATIO The typical ratio of Long Term Debt to Total Equities for the 200 public utility companies studied is .481 when taken for all the companies in the entire United States. Forty-four per cent of the cases were located in three class intervals out of thirteen, The ratio varies widely according to the groups in which the data were analyzed. When these same data were broken down into different groups, the variations in financing with funded obligations were brought out. Those companies in the East and South obtained $ 48 of each dollar of their capital from bonded debt. In the Middle West the typical figure was $.47, and in the West it was $ 40. Clearly, the companies in the West do not rely on bonds to the same extent as companies in other sections of the country. Further, the ratios of the East and West were less typical of their distributions than those of the Middle West and South. The analysis by size of company showed that larger companies finance with larger proportions of long term debt. The companies with 5-9 millions of equities had a modal ratio of 41, those with 10-49 millions had a ratio of 48, and those companies with more than 50 millions of equities had a modal ratio of .53. Gas and Electric companies obtain approximately 51 per cent of their capital requirements from bonds, whereas Traction Companies use bonds to the extent of 42 per cent only. Midway between these are the Holding Companies with a ratio of .47. From 1917 to 1921 this ratio increased from .44 to .50, and then declined to .48 in 1924. These figures appear quite in accordance with the well known difficulty which utilities had in financing themselves from 1917 to 1921. Conditions for a time forced them to use bonds, and then, after the readjustment of industry and credit conditions, they were able to use stocks more freely instead of bonds. II. THE RATIO OF CURRENT LIABILITIES TO TOTAL EQUITIES The Current Liabilities of a utility company constitute only a small fraction of its Total Equities. Unlike most industries, the utility com- panies sell a service furnished through their vast fixed plants, and do not trade in a merchandise to be resold. This condition is reflected in the Current Liabilities. A survey of the ratio of Current Liabilities to Total Equities of companies over the entire United States gave the following: Total cases analyzed........... Cases with no Current Liabilities. . .. Cases with very highratio............. Cases incorporated in Chart 2a. . . 3 26 t,581 29 1.552 The 26 high ratios ranged from .36 to .94, of which 9 belonged to one company. The concentration of these ratios about a central figure (average) is shown as follows. The 1,552 ratios were divided into 18 uniform groups of 2 per cent each from 0-.019, .02-.039, etc. Slightly over 25 per cent of these cases fell in one group—that from .02-.039—while 61 per cent of all these cases fell in the three groups included from .00-.059. Looking at this from another view, the Current Liabilities of 61 per cent of the cases constituted less than 6 per cent of the Total Equities. The typical ratio for this distribution is .031; i.e., 3.1 per cent of the total equities consist of current liabilities in the typical company. THE GEOGRAPHICAL DISTRIBUTIONS Table IIb gives the frequency distributions for the ratio of Cur- rent Liabilities to Total Equities when the cases are divided according to their territorial locations of East, Middle West, West, and South. The approximated mode for each section, and the respective de- orees of concentration are as follows: Modal ratio. ......... ee Concentration about the mode. .. Middle East West West South 033 .033 .028 .034 529 70%, 679%, 629, The modes (averages) do not vary much, the West with its aver- age of .028 differing from the other three sections. In each group the concentration is high, especially in the Middle West where 70 per cent of all the cases are located in the highest bar and the bar on each side. BuLLerin No. 20 Bureau of Business esearch University of Minors 2a Ras J . ~~ 4) ! J G” S Nef $ BS 16" Average {Mede) O31 ") PD »» 8 5 388 6 hk os $8 TEs NS Aaros L-oressed as Fercentages CuARrT 2A—FREQUENCY DISTRIBUTION OF THE CURRENT-LIABILITIES-TO-TOTAL- Eourries Ratios or PusLic Urry Companies, 1915-1024 DISTRIBUTIONS BY SIZE OF COMPANIES Variations in the ratios of companies which are due to the size of the concern are always of interest because they show the relative efficiency of the large and small units. The distributions for the ratio of Current Liabilities to Total Equities according to size of the com- pany are given graphically in Chart 2c, The distribution for companies having over 50 millions of equities shows a very great degree of concentration and very narrow spread as compared to the two groupings for smaller companies. The differences between the sizes can be shown as follows: Companies with ~~ Companies with Companies with Total Equities Total Equities Total Equities of 5-9 of 10-49 of 50 millions mallions millions and over Modal ratio. ................ .028 032 .036 Concentration about the mode. 609%, 579, 7207, TuE Sources oF PunLic UtiLrty CAPITAL Bure v of Jusincss few Uni ersity of lilinois Ey - 8% J; La Lage VE IC (Mode) Avera e A (Moda) 032 verage (Mode) 036 S ~ Ss nN L le , ry Vv -» de allo iE grsfefiil TiVITETE $3 E22 I ARR 3T Se yRE 8T2if dyes 5-9 Millions of Assets 10-49 Millions of Assets 5O0Millions or over of Asset Ratios Lapressed as Fercentages CHART 2c—FREQUENCY DISTRIBUTIONS OF THE CURRENT-LIABILITIES-TO-TOTAL- Equities Ratios oF PusLic UtiLity COMPANIES BY S1ZE oF COMPANY The modal ratios increase with the size of the company, but this is not true of the percentage of cases grouped about these ratios. The concentrations of cases are all high, especially the largest size (those Companies having total equities of 50 millions and over) which have 72 per cent of the cases in the modal bar and its two adjoining bars. The larger size companies carry heavier burdens of current debt than the small companies, indicating a greater use of creditors’ funds for supplying working assets. DISTRIBUTIONS BY KIND A question naturally arises as to what differences in the ratios are due to differences in the types of companies included in the study. Classifying the data into the three groups of Gas and Electric, Trac- tion, and Holding Companies gave the results presented in Chart 2d. The Gas and Electric Companies have an even distribution ; these cases fall off gradually in the higher ratio groups. The Traction Companies do not give so even a distribution, being irregular in the higher ratio sroups; and the Holding Companies have practically no cases with ratios above .18. Another point of interest is that the distribution for the Traction Companies shows four bars with each more than 15 per BULLETIN No. 20 Bureav of Buaihess Rese University of iflinois 2d ir ~ 3 Pr Aver--¢ (Moda) 035 — Average (Mode) o3l v © (Mode) 026 iS Q 15! -~ 3 10! > ] . Ll ll 5 FT 8% @ 8% 88 8T Tie IEIEH fT Eselya Gas & Flectric Traction Holding Patios Expressed as Fercentages CHART 2D—FREQUENCY DISTRIBUTIONS OF THE CURRENT-LIABILITIES-TO-TOTAL- Equities Ratios oF PusrLic Utiuity COMPANIES BY TYPE oF COMPANY cent of the cases, while the other two distributions have only two bars each with more than 15 per cent of the cases. The approximated modes and percentages of concentration of the cases about these typical ratios are as follows: Gas and Electric Traction Holding .035 L031 .026 59% 58% 72% The ratios of each group are highly typical of their respective dis- tributions as shown by the large number of cases grouped about these ratios. DISTRIBUTIONS BY TYPE YEARS The effect of varying business conditions from year to year upon the ratios of Current Liabilities are given in Table ITe. The years 1917, 1919, 1921, and 1924, which were chosen for detailed study, are years of varying degrees of business activity. The types of distribu- tions for these years are quite similar, the most significant difference being the shifting of the highest bar from the class interval of .02-.039 to .04-.059 in the year of 1919, Tue Sources oF PusLic UtiLity CAPITAL 1917 1919 1921 1924 Class interval.............. .02-.039 .04-.059 .02-.039 .02-.039 Modal ratio. .............. .032 .048 .033 .033 Concentration about the mode 60% 549, 599%, 62% The typical ratios are practically constant, except for the year 1919, when the mode rose to .048. In addition to this general tendency for most of the companies to increase their current liabilities, there seems to have been an opposite movement by a small number of the companies in the year 1919 whereby they actually decreased the amount of Current Liabilities. This is shown as follows: Percentage of cases falling in class interval 1917 1919 1921 1924 00-019. ....... ... 1397 189, 139, 149, Eighteen per cent of the companies had a ratio of Current Liabil- ties to Total Equities of less than .02 in 1919 as compared to 13 per cent for 1917 and 1921. That is, 5 per cent more companies took a conservative position in 1919 than in either 1917 or 1921. SUMMARY OF THE CURRENT LIABILITIES RATIO While the Current Liabilities Ratio is a small item of the Total Equities, yet in relation to its own size, it varies almost 100 per cent. For all the companies together the typical approximated ratio is .031 with a high concentration of the cases, 61 per cent. in the three highest bars out of eighteen. The typical ratios by geographical location are .033 for the East and Middle West, .034 for the South, and .028 for the West. The percentages of concentration are all high. The size of this ratio in- creases with the size of the company. Based on the Total Equities of the companies, the ratios are .028 for those with 5-9 millions, .032 for those with 10-49 millions, and .036 for those with 50 millions and over. The lowest ratio of Current Liabilities to Total Equities was for the Holding Companies with .026. The Traction Companies had a ratio of .031 and the Gas and Electric had .035. As in all the other analyses of this ratio, the percentages of concentration were high here too, varying from 58 per cent to 72 per cent. The highest typical ratio of Current Liabilities was recorded in the analysis by years. For 1919 the ratio was .048 whereas it was .032 in 1917 and .033 in 1921 and 1924, IIL. .THE RATIO OF CAPITAL STOCK TO TOTAL EQUITIES The Capital Stock as discussed here includes all common and pre- ferred stock combined in one total, except in a very few cases where the preferred stock was preferred as to assets and dividends, cumula- tive, and non-voting. In these few cases the preferred stock was classi- fied with the long term debt. In Parts V and VI of this bulletin the ratios of Preferred Stock to Total Equities and Common Stock to Total Equities are discussed individually. The importance of this ratio (Capital Stock) lies largely in the indication which it gives as to the types of financing; i.e., whether financing is done primarily with bonds or with stocks, and what is the thickness of the buffer over which the bonds are placed. Chart 3a shows the distribution of 1,578 cases ranging from 00-.96. Three cases having ratios above .96 were omitted. Eighty per cent of the cases are located in the five highest bars out of twelve, while 52 per cent of all the cases are located in three bars out of the twelve. Stated differently, slightly more than half of all the ratios of Capital Stock analyzed were between .32 and .56 of the Total Equities of their respective companies. The approximated mode is .417, and is clearly typical of this distribution THE GEOGRAPHIC DISTRIBUTIONS Differences in types of financial structure and the different pro- portions of capital stock used in different sections of the country are brought out by a regrouping of the data into those companies located in the East, Middle West, West, and South. Results obtained in this grouping are as follows * Middle East West West South .413 .445 .519 .452 . 479, 589%, 419, 759% The smallest ratio of Capital Stock to Total Equities of 413 is for those companies located in Eastern United States, followed by the Middle West, South, and West in order of size of their ratios of A445, 452, and .519 respectively. The West, which has the highest ratio, .519, has only 41 per cent of the cases concentrated about this ratio; the East, which has the lowest ratio, has 47 per cent of the cases grouped about the mode. On the other hand, the South and Middle West, whose respective ratios lie between the extremes of the West and East, have higher degrees of concentration about the modes. es- Tue Sources oF PusLic UriLity CAPITAL Bureav of Business flesearch University of linois a 2 Vz 0 3 vy Dd Q ny 3 No 3 L > - I Average (Mode) 417 iil —-— f A A cans 8 ¢ X 8 ¢ § 28 FX 8 8 Aatios Lxpressed as Fercentages CHART 3A—FREQUENCY DISTRIBUTION OF THE CAPITAL-STOCK-TO-ToTAL-EQUITIES RaT108 OF PusLic UtiLity CoMPANIES, 1915-1924 pecially in the South where three-fourths of all the cases are in three class intervals out of twelve. These differences in the percentages are plainly shown by the types of the distributions given in Chart 3b. The distributions for the East and West are squat and well spread out, while the distributions for the Middle West, and especially the South, are tall and concen- trated near the central bars. DISTRIBUTIONS BY SIZE OF COMPANIES Does the size of the company influence or determine the propor- tions of capital stock used in financing public utility companies? An answer is found to this question by the grouping of the data into com- BuiLeriy No. 20 1 Losls #esaar & read of Loviiness Tesear: Ute sing of linols 3 T 3 | iz ) 3 s Average Average Average Average (Mode) (Mode) (Mode) (Mode) M3 445 &19 452 18 5 y Io 5 5 L N all LL Ji, su E88 PEELE ss sia¥iE BERIT E $e He 8 sire gen23d East Middle West West South Ratios Lxoressed as Fercentages CHART 33—FREQUENCY DISTRIBUTIONS OF THE CarrraL-Stock-To-TorAL-EQUITIES Ratios oF Pusric UtiLity COMPANIES BY GEOGRAPHICAL DISTRICTS panies with 5-9 millions of equities, 10-49 millions of equities, and those with 50 millions of equities and over. Chart 3c shows that the small companies have a flat type of dis- tribution, that the companies with 10-49 millions of equities have a slightly peaked distribution, and that the companies with over 50 millions of equities have a tall distribution with narrower spread. The mode for each of these distributions is located in a different ‘class interval. Companies with Companies with Compantes with Total Equities Total Equities Total Equities of 5-9 of 10-49 of 50 millions mallions millions and over Class interval... ... Lo. .48-.559 .40-.479 .32-.399 Modal ratio. ................ .515 .442 .354 Concentration about the mode 489, 57% 649, From these figures, it is plain that the smaller companies use a substantially greater proportion of stock than the larger size companies. For the companies with 5-9 millions of equities the typical ratio is .515, slightly more than half of the total equities being composed of stocks. In the larger companies the ratio decreases. indicating that the larger THE Sources oF PusLic UtiLity CAPITAL pppoe rrr urea of Business i socarcr Universiy »f Minos ER | > Averaqe Moda) 55 Average (Made) 442 Average Mode} B54 w— or A] S 15] LS 3) " " > | 5 J le Fs § vo C2 8 238 bs om 7 8 3 ¢ 4% 3 6 5-9 Millions of Assets 10-49 Millions of Assets SO/Millions or over of Assets Fatios FE xoressed as Fercentaaes CHART 3¢—FREQUENCY DISTRIBUTIONS OF THE CAPITAL-STOCK-T0-ToTAL- EQUITIES Ratios oF PusLic UriLity COMPANIES BY Size oF COMPANY companies can finance with a thinner equity of stock. The companies with over 50 millions of equities use 35 per cent stock as contrasted to 52 per cent for the companies with 5-9 millions of equities. But in regard to the concentration about the mode, the trend is opposite to that of the ratio. As the ratio decreases in the larger com- panies, the degree to which this ratio may be called typical increases, as shown by the increased percentage of cases grouped about the mode. It seems to be a safe conclusion that there is a greater uniformity of policies for large companies than for small companies, in regard to their financing with stocks. DISTRIBUTIONS BY KIND Tabulation of the data for the ratio of Capital Stock to Total Equities for Gas and Electric, Traction, and Holding Companies are given in Table IIId of the Appendix. The differences among these three groups may be shown in part as follows: Modal ratio. .......oviviviniiinnneninnn, —oncentration about the mode... Ce. Gas and Eleclric Traction Holding .405 .472 .452 51% 53% 499, Burrerin No. 20 The ratio for the gas and electric companies is lowest of the three with 405, although it has a high percentage of cases grouped about the mode. The ratio for Traction Companies is 472, which is ap- proximately the same as the ratio for holding companies, .452. The percentage figures denoting concentration of cases about the mode for these three distributions are all high. DISTRIBUTIONS BY TYPE YEARS As in the previous analyses by years, the years 1917, 1919, 1921, and 1924 were selected to note the effect over a period of years and under varying degrees of prosperity upon the ratio of Capital Stock to Total Equities. Table IIe of the Appendix gives the frequencies for each year and also the comparable percentages. - For the year 1917 the distribu- tion is even and symmetrical, whereas in the years 1919, 1921, and 1924, the distribution has become steadily less symmetrical. Changes are taking place. The nature of these changes are readily grasped by noting the number of class intervals having more than 5 per cent of the cases. In 1917, eight of the class intervals each had over 5 per cent of all the cases for that year; in 1919, seven class intervals con- tained over 5 per cent of the cases each; in 1921, only six of these intervals reached the 5 per cent figure; and by 1924, only five of the class intervals contained over 5 per cent of the cases. This change has taken the form of an increasingly greater percentage of the cases fall- ing in a smaller number of class intervals. The approximated modes for these years are as follows: 1917 1919 1921 1924 .482 .427 .421 .410 499%, 529%, 52% 51% Except for the year 1917, the ratios are practically constant. There is a drop from .482 in 1917 to 427 in 1919, while between 1919 and 1921 and also between 1921 and 1924 there is little variation, al- though there still appears to be a downward tendency for the ratio of Capital Stock to Total Equities when analyzed by vears. SUMMARY OF THE CAPITAL STOCK RATIO When other factors are not taken into consideration, the ratio o? Capital Stock to Total Equities which is most typical of all the com- panies in the United States is .417. Fifty-two per cent of all the cases are located in three class intervals out of twelve—attesting to the fact that this approximated modal ratio is representative. THe Sources oF PusLic UriLity CAPITAL 21 Those companies in the western division of the United States secure more than half of their capital from stockholders. The ratio of Capital Stock to Total Equities in this section of the country is .519. The modal ratios for the other sections of the country are 413 for the East, 445 for the Middle West, and 452 for the South. However, in the South there is a large concentration (75 per cent of all the cases) about the typical ratio of 452, When analyzed according to the size of companies, it is found that companies with 5-9 millions of equities normally finance with approxi- mately .52 of their total equities as stock. Those with equities be- tween 10 and 49 millions of dollars have a typical ratio of .44 and those with 50 millions and over of equities have a typical ratio of .35. The percentages of concentration increase as the size of company in- creases. The typical ratios for Gas and Electric Companies, Holding, and Traction Companies are 41, 45, and .47 respectively. When analyzed by years, the modal ratios decline from .48 in 1917 to .43 in 1919. and then to .41 by 1924. IV. THE RATIO OF SURPLUS AND RESERVES TO TOTAL EQUITIES The utility industry has ordinarily not built up substantial sur- pluses such as are found in the industrial enterprises. This is largely attributable to differences in methods of public utility financing, where- by the stockholders usually do not supply more than fifty per cent of the capital, to the slow turnover of the utility capital, and to the public regulation of rates. Yet the study of the ratio of Surplus and Re- serves to Total Equities is of interest as it shows to what extent ex- pansion has taken place through reinvestment of earnings. A tabu- lation of the ratios gives: Cases without any ratio. ...... 1 Cases with deficits (negative ratios). . veowesnene 100 Cases with surplus (positive ratios) ............... . 1,480 Total cases examined (1915-1924) .. .. . .... 1.581 Chart 4a shows graphically the frequency distribution of 1,542 of these cases. Of the 100 negative ratios listed, 24 were omitted from the chart and tables, because they were widely scattered beyond a ratio of —.21, the lower limit of the chart, For the same reason 14 ratios were omitted from the upper limits of the chart. The chart shows the few scattered cases with deficits, and the high concentration of cases having ratios ranging from 00 to .12. The shortening of the bars for the negative ratios to the left of the zero is abrupt, whereas the decrease of the bars to the right (the positive ratios) is gradual and regular. Because of the high concentration of cases in the positive ratios ranging from 00 to .12, the mode is 071; i.e. instead of being located in the highest bar, .03-.059, it has been located in the next bar to the right, .06-.079, which is the truer center of the greatest concentration of cases. The degree to which this ratio of .071 is typical is evident from the high concentration of 47 per cent of the cases in three bars (the modal bar and the adjoining bar on each side) out of the total number of 22 bars. Although 7 out of 22 of the class intervals con- tain deficits (negative ratios) only 4.9 per cent of the cases are located in these seven intervals DISTRIBUTIONS BY GEOGRAPHICAL LOCATION A study of Chart 4b shows widely divergent types of distributions for those companies located in different sections of the United States. THE Sources oF PusLic UtiLity CAPITAL 2 Bureav or Business Research University of lffinois <a Deficit (Neqative rotios) TT 3 Surplus (Positive ratios) 3 =e 35 Q Averaqe (Mode) DPT ie S Q \ 4 , aan fll ITIitRIErEeRiitanieg REYT 353888 8nenggiindey Fates Expressed as Fercenrages CHART 4A—FREQUENCY DISTRIBUTION OF THE SURPLUS-AND-RESERVES-T0-TOTAL- Equities Ratios oF PusLic UriLity CoMraNIES, 1915-1924 In the East the distribution is squat and symmetrical with a goodly number of the cases having deficits. The Middle West has a mod- erately high distribution, falling off gradually to the right and abruptly to the left. For this section of the country, there are practically no deficits. The West has a moderately peaked distribution, an irregular number of cases with deficits, and a very sharp decline of cases with positive ratios of over .15. For the South, the distribution gives a very high concentration in two bars out of the twenty-two accompanied by a sharp decline in the cases on either side of these two bars. The approximated modes for these four distributions are as fol- lows * Modal ratio. . ......oovvr ieee, Concentration about the mode Middle East West West ~~ South .070 .053 .052 .030 1409, 599, 559, 7907, Burrerin No. 20 ureay of Univarsing e Tey “Mois —=~Deticit (Negative notios) ———3urplus (Positive ratics ) Average (Mode) — O10 Average { Made) tan ima LO5% Average (Mode) O52 Average (Mode) 030 — A . 3 24 3 iy No § x " Rl i» 3 Cd RCE TOE I TE Tite 5840 GEBtsguciaiy fe8Baeiatid PHEBaiciané LotBsiieiil East Middle West West Jouth Rarios Laxpressed as Fercentages CHART 43—F REQUENCY DisTrIBUTIONS OF THE SURPLUS-AND-RESERVES-TO-TOTAL- Equities Ratios or PusLic UriLity COMPANIES BY GEOGRAPHICAL DISTRICTS For the East the mode is highest with .070, but there are fewer cases grouped about the mode than in the other sections of the country. The Middle West and the West are similar in their modal ratio, and also in the degree to which the ratio is typical of the distribution. The South differs from the others with the low ratio of 03 and the high concentration of 79 per cent of the cases grouned in three bars out of a total of 22, Further differences are brought out as follows « Middle East West West ~~ South Deficits (negative ratios 0-.209)............ 1% 19, 9% 39% The Middle West has practically no cases with deficits, the South has 3 per cent, while the East and West have respectively 7 per cent and 9 per cent. In the East a considerable number of companies have been able to build up substantial surplus and reserve items as shown by those companies having high ratios. To a less extent this is also true of the Middle West. 9 sf Se Tue Sources oF Pusric UriLity CAPITAL -—-Detieit {Neqotive ratios) ——Surplusl Positive rotiog) Bureay of IF Te Averages (Moda) 050 1 Average wos Average (Node) (Mode) 081 4 080 ” iy A So 9 Qe r N. x * * | ln NER Lu] _ IL, Lo e222 wl v 3 EE hae; fo SHERT DIR oy¥r EIA D0, oy. adiRy §98%triotacy foffiiiaaat §EESiiicyia 5-9 Tilions of Assets 10-49 Millions of Assets SO/filions or over of Assely Fafios Lapressed as Fércente- CHART 4c—FREQUENCY DISTRIBUTIONS OF THE SURPLUS-AND-RESERVES-TO-TOTAL- Eourties Ratios or PusLic UtiLity COMPANIES BY S1zE oF COMPANY Percentage of cases with positive ratios of .15 East Md ? West South Or OVer...... .. 33% 22% 5% 7% These figures show that one-third of all the cases in the East had surplus and reserve items greater than 15 per cent of their total equities, whereas in the Middle West the percentage of cases with a ratio of over .15 is 22 per cent. The West and South have respectively 5 per cent and 7 per cent of the cases with a ratio of over .15. DISTRIBUTIONS BY SIZE OF COMPANIES Using the amount of total equities of the companies as the basis of classification the cases were grouped into those with 5-9 millions of equities, 10-49 millions of equities, and 50 millions of equities and over. These three distributions are given in Chart 4c. The approximated modes for each of these three groups and their respective percentage figures are as follows: Companies with Companies with Companies with Total Equities Total Equities Total Equities of 5-9 of 10-49 of 50 millions millions millions and over Modal ratio. ..........cvn.tn .050 .051 .080 Concentration about the mode. 559, 529; 479, BuLierin No. 20 2. —===Deticit (Negative ratios) — Surplus ( Positive rotios) Averaqe (Mode) O52 Average (Mode) £77 T- requ of usi-esx [Tesearch University 4 Hitnols Average Mods £049 $ 3 ny 10 ™N 2 ii ery. FH FE EEE IEEE TT tT FEI tft aeanads Sipsiilafil gedgiitiid Gas & Electric Traction Holding Ratios Lo xpressedl as Fercentages CHART 40—FREQUENCY DisTRIBUTIONS OF THE SURPLUS-AND-RESERVES-TO-TOTAL- Eourmes Ratios oF Pustic UtrLity COMPANIES BY TYPE OF COMPANY As compared to one another, the companies in the 5-9 millions group and those in the 10-49 millions group have similar typical ratios, and the percentages of cases are likewise similar, but for those com- panies with 50 millions of assets and over, the typical case has a sur- plus and reserve item equal to 8 per cent of its total equities which is considerably higher than the smaller companies. The differences in their degrees of concentration are not very large. A still greater dif- ference exists between the two small groups of companies on one hand and the large companies on the other as shown below : Companies with Companies with Companies with Total Equities Total Equities Total Equities of 5-9 of 10-49 of 50 mallions Percentage of cases with neg- millions millions and over ative ratios (0—.209) . 5.6% 6.39, nN In the two smaller groups of companies, 5.6 per cent and 6.3 per cent of the cases had a deficit instead of a surplus, while no cases of a deficit are recorded for the companies with over 50 millions of total equities. In every respect, the large companies appear to be in better condition so far as this is reflected in the size of the item surplus and reserves. Tan Zo en & 3 DISTRIBUTIONS BY KIND OF COMPANY XN A brief survey of Chart 4d shows the features of diieréhed o> tween Gas and Electric Companies, Traction Companies, and” Hotdifig Companies regarding their ratios of Surplus and Reserves, Outstand- ing among these are the few cases with deficits in the Gas and Electric Companies and the Holding Companies in contrast to the large number of bars showing deficits in the Traction Companies. The approximated modes for these three distributions and the percentages of cases grouped about these modes are as follows: Modal ratio. .......... Concentration about the mode. . Gas and Electric Traction Holding .052 077 .049 479, 47% 68% The Holding Companies and Gas and Electric Companies have similar modes although there is a substantially greater concentration of cases about-the mode for the Holding Companies. The Traction Com- panies have 7.7 per cent of their total equities made up of surplus and reserves, and this figure is justly typical as indicated by a concentration of 47 per cent of the cases about this ratio. However, a judgment of the three types of companies based on the above figures alone would be misleading. An important contrast is brought out below. Gas and Total percentage of cases with deficits Electric Traction Holding (negative ratios 0—.209)... 297, 139, 497 The great contrast here lies between the Traction Companies with deficits for 13 per cent of all the cases, and the Gas and Electric, and Holding Companies with deficits for 2 per cent and 4 per cent re- spectively. DISTRIBUTIONS BY TYPE YEARS To determine the effect upon the ratio of Surplus and Reserves to Total Equities of differing degrees of prosperity, the ratios for the years 1917, 1919, 1921, and 1924 have been selected for analysis. The details of the distribution for the ratio of surplus and reserves for these years are given in Table IVe. The modes calculated by the ap- proximation formula, and the percentage of cases grouped about these modes are as follows: Modal ratio. .....oouvn... Concentration about the mode. . 1917 1919 1921 1024 ,047 .047 .051 L077 599, 5207, 499, 489, The ratios for 1917 and 1919 are alike at .047, but 1921 and 1924 show increased ratios of .051 and .077. While the ratio has thus been 28 BuLLerin No. 20 increasing, there has been a decrease of the percentage of cases grouped about the mode. That is, a few of the companies have increased their surplus and reserves ratio to a greater extent than the typical company. Consequently, although the modal ratio has increased, the percentage of concentration has decreased, due to the still greater increase of the ratios in a few of these companies above the modal average. SUMMARY OF THE SURPLUS AND RESERVES RATIO In the United States as a whole the typical utility company has a Surplus and Reserve item in its balance sheet which constitutes .071 of its Total Equities. Companies in the Middle West and West have ratios of .0S, those in the East have a ratio of .07 and those in the South a ratio of .03. The very low ratio of surplus in the South is highly representative of the companies on which it is based ; 79 per cent of the cases were concentrated about the mode in three out of 22 class intervals. Typical ratios of Surplus and Reserves for companies of 5-9 mil- lions and 10-49 millions of equities are .05. Companies with 50 millions of equities and over have a higher proportion of Total Equities in Surplus and Reserve, namely, .08. Furthermore, the largest group of companies shows practically no deficits. In the analysis by operative function of the companies, the Trac- tion Companies have the highest modal ratio of 08 (.077) with ap- proximately .05 for both Gas and Electric, and Holding. However, in contrast to this is the great percentage of negative ratios in Traction Companies, wherein 13 per cent of the cases had deficits instead of surplus. When analyzed by selected years, the modal ratios are almost con- stant from 1917 to 1921, ranging from .047 to 051, but in 1924 the ratio jumped to .077. This large increase in this ratio is easily ac- counted for by the reaction and recovery of utility company profits following the decline of business in 1921 and 1922 with its accompany- ing fall of operating costs due to reduced commodity prices. V. THE RATIO OF PREFERRED STOCK TO TOTAL EQUITIES The four ratios already described in this bulletin constitute in themselves a complete picture of the total equities of the utility com- panies. One of these ratios—the Capital Stock—will now be analyzed to determine in what proportions it is composed of preferred stock and common stock under the various conditions. The ratio of Preferred Stock to Total Equities is the one taken up here; the Common Stock to Total Equities follows in section VI. Since many of the companies grouped all their stock under the caption of capital stock and since some companies did not finance through preferred stock, only 884 ratios of Preferred Stock to Total Equities were obtained. Chart 5a gives the graphic distribution of 858 of these cases; 26 of the ratios were omitted because they were unusually large. The mode for this distribution is .156. The degree to which this ratio is typical is shown by the percentage of cases concentrated about the mode, namely, 50 per cent. This ratio shows a very strong tendency to remain in the lower class intervals, as evidenced by the high con- centration between 00 and .24. Specifically, 83 per cent of all these cases had Preferred Stock of less than .24 of the Total Equities. THE GEOGRAPHICAL DISTRIBUTIONS Table Vb of the Appendix gives the frequency and percentage distributions for the ratio of Preferred Stock to Total Equities by geographical location. Because of the irregularity of distributions, no exact modes have been calculated. The class interval with the largest number of cases and the percentage of cases grouped about that class interval for each section are: Middle East West West South Dominant class interval. ......... .... .16—-.199 .08-.119 .12-.139 Concentration about the interval... .... 479, 509%, 709, No figures are given for the East because the distributions for that section do not show a tendency towards any central peak. If the class intervals for the other three sections of the country are rear- ranged. thev follow in the order: Went. ovommesnmmesrmus amp ss mus eammss mens BOE, 44 nos mm es HRs SESS FRAY BEE FES 4 Middle West . . . Class Interval Concentration .08-.119 5097 .12—-.159 709, .16-.199 479, BuiLLermv No. 20 Buyreav of Business Resear University of linois 5, N Averoqe (Mode) 186 INE XQ S QS 8 5 3. g \ $ 8 & 8 & ¢ & § 8 & Ratios Lroressea as Percentages CHART 5A—FREQUENCY DISTRIBUTION OF THE PREFERRED- STOCK-TO-ToTAL-EQUITIES Rati0s oF Pusmric UriLity CoMPANIES, 1915-1024 It is evident now that the center of the data differs by one class interval for each of these sections. The percentages of concentration about these class intervals are high, especially the South with 70 per cent. DISTRIBUTIONS BY SIZE OF COMPANY The distributions of the ratio of Preferred Stock to Total Equities by size of companies are given in Table Vc. Here, too, a rough ap- proximation is obtained by the use of the class interval with the great- est number of cases in it. For the classification of the data by size of company, these are as follows: Companies with Companies with Companies with Total Equities Total Equities Total Equities of 5-9 of 10-49 of 50 millions millions millions and over Dominant class interval. ....... .20-.239 .16-.199 .04-.079 Concentration about the interval. 47%, 529, 469, THE Sources or PusLic UrtiLity CAPITAL 31 The smallest companies, those with 5-9 millions of total equities, have the largest dominant ratio group, .20-.239, and those companies with 10-49 millions of total equities have the greatest number of cases in the group .16-.199. In sharp contrast to these smaller companies, the companies with 50 millions of equities or over have their greatest number of cases in the very low ratio group of .04-.079; ie., for these largest companies, more cases had a ratio of Preferred Stock between 4 per cent and 7.9 per cent of the total equities than for any other class interval. + DISTRIBUTIONS BY KIND Distributions of the data for Gas and Electric Companies, Traction Companies, and Holding Companies are given in Table Vd. The Gas and Electric and Traction Companies have fairly symmetrical dis- tributions, but the Holding Companies do not have any distinct central tendency. The approximated modes and the percentage of cases con- centrated about the modes are as follows: Modal ratio. ........ Concentration about the moc - Gas and Electric Traction 141 .156 579% 519, The type of distribution obtained for holding companies does not lend itself to the calculation of a typical average. DISTRIBUTIONS BY TYPE YEARS Frequency distributions of the ratios of Preferred Stock to Total Equities are given for the years 1917, 1919, 1921, and 1924. These distributions which are given in Table Ve are not all symmetrical and are not satisfactory for the calculation of typical ratios. The class intervals in which the greatest percentage of cases fall for each year are as follows: 1917 1919 1921 1924 Class interval........... eee. 12-159 16-199 .... .16-.199 Concentration about the interval....... 350% 519, 579% For the year 1917 the dominant bar is for the class interval next below those for 1919 and 1924. No class interval is given for 1921, because it has no distinct central tendency.. There is not a great deal of difference in the concentration of cases as shown by 50 per cent in 1917 and 57 per cent in 1924. VI. THE RATIO OF COMMON STOCK TO TOTAL EQUITIES The distributions of the ratio of Common Stock to Total Equities given in Chart 6a are based on 906 cases. Two ratios were omitted which were below .02, and 46 ratios were omitted which were above 569. Four cases analyzed had no common stock and consequently no ratio, and the remaining cases out of a total of 1,581 analyzed had their preferred stock and common stock combined as capital stock, or else it was impossible to determine whether their capital stock included stocks other than common stock. For this distribution the typical ratio is .261; ie., 26 per cent of the total equities are common stock, and the degree in which this ratio may be considered as typical is shown by the concentration of cases about the ratio. In this distribution 44 per cent of all the cases are grouped about the ratio of .261. That is, 44 per cent of all the cases fall in three class intervals out of eleven. DISTRIBUTIONS BY GEOGRAPHICAL LOCATION The different types of financing existing in the various sections of the United States are brought out by the distributions given in Table VIb. A symmetrical flat-topped distribution is obtained for the East, a less regular but more peaked distribution for the Middle West, a very symmetrical distribution with concentration at one end for the West, and a narrow peaked distribution for the South. Although the Middle West and West show some tendency towards a bimodal distribution,® there is nevertheless a predominant center of concentration in each. The approximated modes and their respective percentage figures for these different sections are as follows - Modal ratio. ........................... Concentration about the mode............. . Middle East West West South .242 .260 .424 .302 459, 529, 4107 509, Thus 24 per cent of the total equities in the East consist of com- mon stock, and 26 per cent in the Middle West. Contrasted against these, 30 per cent of the total equities in the South are common stocks, and 42 per cent in the West. Almost half of the total funds and properties of the typical utility company are owned by the common stockholders in the western sections of the United States, The figures on percentages of concentration are practically iden- tical for the South and Middle West, with 50 per cent and 52 per cent SA distribution with two peaks I'ue Sources oF Pusric UrtiLity CAPITAL 1 Bureau of Business Resaorct University of [llinois. en Ba ty i § KX 10 A veraqe (Mode) 26! Se S 9 bo, \ 4 n pid = = L 8 QR " 2 T ¥ a % = ; , . k y a v ’ § #& + 8 § B&B KF § 5 Rotios Lxpressed as [Rercenfages CHART 6A—FREQUENCY DisTriBUTION OF THE COMMON-STOCK-TO-TOTAL-EQUITIES Ratios oF PusLic UtiLity CoMPANIES. 1915-1924 respectively. The West, which has such a high ratio of common stock, has the lowest percentage figure, namely 41 per cent, which shows that there are fewer companies in the West whose ratios approximate the high typical ratio of .424 than there are in other geographical sections. DISTRIBUTIONS BY SIZE OF COMPANY The frequency distributions for companies according to the amount of their total equities are given in Table VIc. The cases are grouped according to those having total equities of 5-9 millions, 10-49 millions. and 50 millions and over. For the companies with from 5-9 millions of equities, there does not appear to be any single typical type of financing as shown by the distributions of ratios. Seven bars out of eleven each contain more than 10 per cent of the cases. The companies with 10-49 millions of 4 BurLerin No. 20 equities have a symmetrical distribution, but the distribution for com- panies with 50 millions of equities or over is irregular. The class intervals with the greatest number of cases for each group, and the concentration of cases about the interval are as follows Dominant Class ~~ Concentration Interval about Interval Companies with 50 and more millions of equities. .17-.219 319, Companies with 10-49 millions of equities. ...... .22-.269 509, Companies with 5-9 millions of equities. ........ .27-.319 379, Starting with the largest group of companies, and progressing tc the smallest group, the class interval of greatest prominence increases, each one being one class interval higher. That is, the larger companies appear to finance with less common stock than is the case with the smaller companies, The percentage figures of concentration are very low for the larg- est and smallest size companies, showing that ‘the ratios of the com- ponent.companies are not greatly concentrated about any single figure or average. The 50 per cent concentration for the companies of 10-49 millions of assets is large compared to the others. DISTRIBUTIONS BY KIND OF COMPANY Classifications of the ratio of common stock were made according to Gas and Electric, Traction, and Holding Companies, and the result- ing frequency distributions are given in Table VId of the Appendix. In each of these distributions, the class interval with the greatest num- ber of cases and the concentration of cases about the interval are as follows * Type of Company Gas and Electric. . |... Holding ....... Traction _ Concentration Class Interval of Cases .17-.219 419, .22-.269 . 479%, 132.360 4867 From these figures, it appears that the Gas and Electric Companies use less common stock in their financing than either the Holding or Traction Companies. The Traction Companies use the most common stock; a larger number of companies have a ratio from 32 per cent to 37 per cent than any other figure. More gas and electric companies had a Common Stock to Total Equities ratio of between .17 and .219 than for any other ratio group. DISTRIBUTIONS BY TYPE YEARS That changes are taking place in the ratios of Common Stock to Total Equities is shown by the trend over a period of years, As in THE Sourcis or PusLic UriLity CAPITAL 35 the previous discussion of the ratios, the years selected are 1917, 1919, 1921, and 1924. The class intervals which have the most cases in them and which represent the center of greatest concentration for each year are as follows: 1917 1919 1921 1924 Class interval with most cases .27-.319 .22-.269 .17-.219 .12-.169 Concentration about interval. 509, 469%, 449, 479, The most interesting fact here is the shifting of the class interval. For each of the.years given above, the dominant class interval has shifted to the next lower interval. Whereas 50 per cent of the cases had ratios approximating .27-.319 in 1917, 47 per cent of the cases have ratios approximating .12-.169 in 1924. The size of the ratio group has been cut in half during the period 1917 to 1924, from .27-.319 to .12-.169. In spite of this rapid lowering of the ratios of Common Stock to Total Equities, the percentage of cases concentrated about these ratios is almost as high in 1924 with 47 per cent as it was in 1917 with 50 per cent. Although the vears chosen for analysis are years of differing business prosperity, the degree of prosperity.seems to have little, if any, effect upon the downward trend of the ratios of Common Stock to Total Equities. APPENDIX LONG TERM DEBT TABLE Ia.— “TOTAL EQUITIES RATIO Frequency distribution of the ratios of long term debt to total equi- ties of 200 public utility companies, 1915-1924 Ratio Groups 02-079 08-139 14-199 10-259 26-319 32-379 38-439 44-499 50-559 56-619 52-679 58-739 74-700 Ratio | Frequencies 64 76 156 196 210 10 206 132 67 28 Cumulative | Percentage Frequencies Distribution 143 119 £1 2.28 1.42 3.25% 375 571 781 | 000 10.78 13.55 14.51 15.13 1206 1338 1405 1433 1447 4.24 9.12 4.63 1.94 yy Cumulative Percentages ..18 5.46 9.88 15.13 25.91 39.46 53.97 69.10 83.34 92.46 97.09 99.03 100.00 Average: A pproximated Mode ; LONG TERM DEBT TABLE Ib— TOTAL EQUITIES RATIO BY GEOGRAPHICAL LOCATION Frequency distributions of the ratios for public utility companies by territorial divisions Ratio Groups Rast Fre- | Per- quencies centages Totals cad 0 02-079 08-139 14-199 20-250 47 32 +. 66 3.57 6.37 1 O77 26-319 32-379 38-439 14-400 R& ir 7% Rz 13.66 11.65 11.65 ‘3.04 50-559 56-619 52-679 58-730 80 | § | 17 12.42 6.83 6.83 2.64 14-700 1. Averages: Approximated Mode .484 Middle West Fre- | Per- Tuencies ! centages 4727 100 2.13 5 45 ry dt 6.40 i9.20 19.20 16.11 81 68 71 50 10 0 h] 16.82 11.85 2.37 460 South Fre- | Per Fre- | Per- quencies ' centages | quencies | centages 229 100 100. 29 l.18 £.37 Q.30 | 10 19 ’.95 3.29 2.63 1.32 35 26 24 18 15.29 £1.35 10.48 12.23 6 14 30 0 3.95 9.21 19.73 25.65 17.11 13.16 29 12.66 18 7.86 13 5.68 1 4.80 2 26 20 0 0 nN +01 {6 Tue Sources oF PusLic UriLiry Capital LONG TERM DEBT TABLE le.— “TOTAL EQUITIES RATIO BY SIZE OF COMPANY Frequency distributions of the ratios of public utility companies according to the amount of total equities Ratio Grouns Totals ..... 02-079 08-139 14-199 0-250 26-319 32-379 38-439 14-400 50-559 56-619 62-679 68-739 TA_700 Averages: Aporoximated Mode With assets of 5-0 millions Fre- | Per- luencies centages 163 100. . 'Q 94 1.75 6.26 59 6 52 12.74 20.74 11.23 11.88 9.50 7.78 | 7.99 ! 1.73 1 73 id 3¢ 37 o .4017 With assets of 10-49 millions Fre- | Per- quencies centages bis X] 100 30 11 1.¢s 4.16 5.69 10.13 10.40 16.79 17.20 73 75 121 124 20 61 12 19 7 16.64 8.46 1.66 2.64 oe | With assets of 50 millions and over Fre- | Per- quencies centages 262 100. 4.19 4.57 4.57 2.28 9.13 9.52 14.08 15.22 uy 42 35 18 15.99 13.22 6.85 .38 LONG TERM DEBT TABLE Id— “TOTAL EQUITIES RATIO BY KIND OF COMPANY Frequency distributions of the ratios for public utility companies according to tvpe Ratio Groups Totals 02-079 08-139 14-199 M0259 26-319 32-379 38-439 14-490 50-559 56-619 62-679 8-739 T4.-.700 Averages: A pproximated Mode Gas and Flectrie Fre- encies Per- centages sT 4) ‘NOY L 36 18 1.76 2.44 4.18 5 57 76 110 124 A1 8.82 12,75 14.38 16.36 16.24 10.67 3 2c -40 9" 2 3K Traction Fre- quencies ANA 54 6° 41 29 35 Holding Per- centages 1 O00 Fre- ! Per- auencies centages 100. 1.10 4.97 3.87 g 20 .74 5.20 2.72 15.84 16.84 14.36 10.64 10.15 25 7.18 11 8.66 4 4.21 a 7 99 8.84 9.94 15.47 10 35 13.81 6.08 2.21 4 97 yr, Burreriv No. 20 LONG TERM DEBT TABLE le.— “TOTAL EQUITIES RATIO BY SAMPLE YEARS Frequency distributions of the ratios for public utility companies in selected typical vears Ratio Groups War year with high prosperity 101 7% Fairly normal year with increasing activity 1919% Year of depression and declining activity 1921%* Fre- Per- quencies | centages Fre- | Per- quencies | centages Fre- | Per- quencies | centages Totals... .. 114 100 186 100 t 70 100. 02-079 08-139 14-199 20-259 2.29 2.59 4.31 5.17 10.34 17.24 13.79 13.70 2% 3.21 3.21 5.77 3 6 4 18 5.87 1.71 S oO 26-319 32-379 38-439 44-400 12 20 16 16 19 22 20 23 12.18 14.10 12.82 14.74 1 7.65 12.94 16.47 13.53 29 17.06 19 11.18 6 3.53 4 2.35 50-559 56-619 62-679 68-739 74-790 1 12 g 9.49 10.34 6.90 2 80 10 1 1 12.18 7.05 7.69 2.56 1.28 6 ~r) Averages: Approximated Mode .439 L478 Following the indications of the Harvard B Curve. 495 Recent year of prosperity and normal activ- ity 1924% Fre- | Per- quencies | centages 100. 6 8 2.48 3.73 4.97 3.11 21 19 20 32 | 13.04 11.80 12.42 19.88 16.15 | 9.32 1.24 1.24 62 26 15 2 480 CURRENT LIABILITIES TABLE Ha. — =—T5TAL EQUITIES RATIO Frequency distribution of the ratios of current liabilities to total equities of 200 public utility companies. 1915.1974 Ratio Groups 00-019 02-039 04-059 06-079 NR-O00 10-119 12-139 14-159 16-179 18-100 20-219 22-239 24-259 26-279 28-200 30-319 32-339 34-350 Ratio Freauencies 290 203 NE 'Q Cumulative Frequencies 62s 241 1144 1258 1354 1406 1441 1468 { 4AR7 1501 1509 1518 1529 1534 1541 1545 ‘881 Percentage Distribution EL 25.24 19.72 13.08 7.35% 6.19 3.35 2.26 1.74 { 22 20 £2 58 7 .32 .45 26 AR Cumulative Percentages 3.66 40.90 60.62 73.70 81 05 87.24 90.59 92.85 94.59 05.81 96.71 97.23 97.81 98.52 08.84 99.29 99.55 100. 00 Average: Approximated Mode Tue Sources oF PusLic Uriity CAPITAL CURRENT LIABILITIES TABLE 1Ib—~—"TQTAL EQUITIES _ RATIO BY GEOGRAPHICAL LOCATION Frequency distributions of the ratios of public utility companies bv territorial divisions Ratio Groups Rast Fre- | juencies 3 [ Per- centages | Totals... 100. 00-019 02-039 04-059 06-079 NR{-00 93 (£9 (16 102 sR A] »7. 37 . 10-119 2-139 | 4-159 16-179 1Q_1Q0 6 JA 7.78 £.70 18 2.63 I Q4 20-219 22-239 24-259 26-279 18-200 1.66 42 .83 .69 rg 30-319 32-339 24-350 Averages: Anproximated Mode .033 Middle West Fre- | Per- quencies ! centages a7 100 0.25 28.14 26.08 (1.44 EE 26 0 iE >? 7.03 ..60 2,29 .92 Q7 46 £0 23 .46 2 e N32 West Fre- | Per- quencies centages 226 100. J 25. 24.58 7.38 11.02 £8.05 26 19 | 2 5.08 1.54 42 .85 47 ,85 .85 1.69 2 .85 0 vy 42 Sotth Fre- Per- juencies | centages 186 100. 12.82 26.91 22.44 16.03 10.90 2 25 7 3.85 3.21 .64 1.28 .64 1.28 ) } 1 2 n i CURRENT LIABILITIES TABLE lle.———70TAL EQUITIES RATIO BY SIZE OF COMPANY Frequency distributions of the ratios of public utility companies according to amount of total equities With assets of 5-0 millions With assets of 10-49 millions With assets of 50 millions and over Ratio Groups Fre- juencies Per- q centages Totals ..... 407 100. 00-019 02-039 04-059 06-079 NK—90 (0° 52 26 27472 21.74 15.10 10.45 2 722 0-119 2-139 4-159 16-179 I1R-100 7.04 3.82 3.02 2.21 2 472 20-219 22-239 24-259 26-279 28-299 30-319 32-339 34-350 £.81 60 20 .21 40 3 ” 3 .60 40 ®1 Averages: Approximated Mode 19 Fre- | Per- Fre- Per- quencies centages quencies centages 770 100. 285 100. 8.07 35.44 28.42 16.14 7 29 05 R3 150 105 66 2.71 73.75 19.48 13.64 R.87 7.14 1.03 2.34 2.08 01 2.11 .70 10 35 -35 8 6 57 <5 91 65 39 52 | 26 20 4 2 3 }] 0 n 16 BurLermv No. 20 CURRENT LIABILITIES TABLE IId.— ~ TOTAL EQUITIES — RATIO BY KIND OF COMPANY Frequency distributions of the ratios for public utility companies according to type Holding Fre- Per- Fre- | Per- Fre- Per- Juencies - centages quencies centages quencies centages terete ieee _— 2 100. 390 100. lotals.... 00-019 02-039 4-059 J6-079 NR-000 | i] 227 207 112 ~3 2.27 24.19 22.26 12.04 7 {8 15.90 4.86 17.43 18.71 7.18 28.45 30.17 13.36 7.76 5.60 7 IR [8 12 10-119 12-139 14-159 16-179 [8-100 76 30 8.17 1.30 1.94 |. 51 | 61 i.54 l.54 3.08 79 1 6.03 2.59 2.16 2.59 .86 4 10-219 22-239 24-259 26-279 28-299 30-319 32-339 34-350 1.08 32 .54 .43 43 ..03 1.28 03 |. 54 26 | 43 | 3 3 32 27 mm ..03 26 03 0 0 Averages: Approximated Mode .035 026 CURRENT LIABILITIES TABLE He — = OTAL EQUITIES — RATIO BY SAMPLE YEARS Frequency distributions of the ratios for public utility companies in selected typical vears Ratio Groups War year with | high prosperity 101 7% Fairly normal year with increasing activity 1910% Fre- | Per- | luencies ' centages 129 100 Fre- quencies ee Fotals oo Per- centages 168A 0nn 0-019 02-039 04-059 06-079 DR—-0N00 | 20 19 < 13.10 31.07 15.50 14.73 6.20 “0 22 38 1 | & 18.07 19.89 22.89 11.45 3.61 | 10-119 12-139 14-159 16-179 1R-100 5.20 2.33 3.88 L. 55 | .85 1 in 6.63 6.02 1.81 2.41 2 41 20-219 12-239 24-259 26-279 28-299 30-319 32-339 34-350 .78 78 (78 IT .60 [.20 1.81 0 | 3 O | 1.20 Averages: Approximated Mode .032 L048 Following the indications of the Harvard B Curve. Year of depression and declining activity 1021% Recent year of prosperity and normal activ- itv 1024% Fre- | Per Fre- ! Per- quencies ' centages | quencies centages 100 ? 4: 3c 25 10 13.33 24.44 21.67 13.89 5.56 i 22 20 14,38 27.01 20.69 12.65 11 40 6.67 1.44 2.22 1.11 l..1 2.88 4.02 1.15 2.30 1.11 56 2/23 .56 | 1.11 57 57 57 57 i & 0 n 0 3 i 1% JX. IT'ue Sources oF PusLic Urtinity CAPITAL CAPITAL STOCK TABLE Ha.— TOTAL EQUITIES RATIO Frequency distribution of the ratios of Capital Stock to Total Equities of 200 public utility companies, 1915-1924 Ratio Groups 00-079 08-159 16-239 24-210 32-399 40-479 48-559 56-630 64-719 72-799 80-879 {]..Q050Q Ratio | Cumulative i Percentage Frequencies Frequencies Distribution i53 394 6.15 14 64 310 264 239 nd 694 958 1197 {401 19.65 16.73 15.15 12.92 79 56 22 20 1480 1536 1558 1578 5.01 3.55 1.39 L.27 Cumulative Percentages 3..a 9.69 4 33 43.98 60.71 75.86 88.78 93.79 97.34 98.73 100.00 Average: Aporoximated Mode .417 CAPITAL STOCK TABLE IlIb.— TOTAL EQUITIES RATIO BY GEOGRAPHICAL LOCATION Frequency distributions of the ratios for public utility companies bv territorial divisions Ratio (3rouns Totala 00-079 08-159 16-239 24-319 32-399 40-479 48-559 56-630 64-719 72-799 80-879 R050 Foot Fre- quencies ~41 Per- centages 100 3 2 63 135 1 2.07 8.50 18.22 18.08 14.03 14.71 11.88 32 4.32 28 3.78 12 1.62 R 1 0K 134 104 109 RR Middle West Fre- | Per- quencies centages 430 100 ..59 3.19 2.96 12.07 25.06 19.37 13.21 14.81 ho 13 53 10 25 58 ARS 22 5.01 6 1.37 3 .68 A .68 West. Fre- quencies Per- centages 100 240 0 / 20 30 24 zl 40 2Y 2.92 8.33 12.50 14.17 8.75 16.66 15.42 20 8.33 19 7.92 4 1.67 8 3.33 South Fre- | Per- quencies | centages 158! 100. 1 ]12 163 8 93 32 54 ?- 20.25 34.19 20.25 RR RAK 5 3.16 3 1.90 3 1.90 1 63 Averages: Anoroximated Mode .413 BULLETIN No. 20 CAPITAL STOCK TABLE Mle—T6TAL EQUITIES RATIO BY SIZE OF COMPANY Frequency distributions of the ratios of public utility companies according to amount of total equities Ratio Groups With assets of 5-9 millions With assets of 10-49 millions Fre- Per- Fre- | Per- quencies centages quencies centages | 100. Totals, ..... wad 100. 0-079 J8-159 16-239 24-310 ad 41 RA 1.96 8.04 16.47 35 93 ..66 1.21 4.46 11.86 32-399 10-479 18-559 56-630 64 68 93 1 12.55 13.33 18.24 15.80 154 161 130 03 19.64 20.55 16.58 1.86 54-719 72-799 80-879 R]_050 32 6.27 15 2.94 10 1.96 2 2 38 33 27 5 1.21 3.44 .64 20 Averages: Approximated Mode S]% With assets of 50 millions and over Fre- Per- quencies centages 2 mier—— 100. 7.39 19.02 32.40 12.33 5.63 10.56 PA 54 o> 35 16 30 14 | 14 7 4.93 4.93 2.46 8 CAPITAL STOCK FABLE IIId.— TOTAL EQUITIES RATIO BY KIND OF COMPANY Frequency distributions of the ratios for public utility companies according to type Ratio Groups Gas and Electric Holding Fre- | Per- Fre- | Per- quencies centages quencies centages 100. Fre- | Per- quencies centages 937 100 lotals....... 00-079 8-159 16-239 14-319 15 51 174 1.60 5.44 1% 57 2 10 13 5.64 9.80 10.54 13.97 20.82 18.63 13.24 4.90 2.21 L258 2.58 2.15 2.58 6.01 32-399 10-479 18-559 36-620 226 (25 [29 123 24.12 13,34 13.77 13.13 35 76 4 11.58 23.17 14.59 11.58 14 6.01 | 16 6.87 12 5.15 18 7.73 54-719 72-799 80-879 RR_QE0 | 45 31 | 4.80 3.31 96 ~y | 20 a 4 Averages: Approximated Mode 105 TrE Sources oF Pusric UtiLity CAPITAL CAPITAL STOCK TABLE Hle— TOTAL EQUITIES RATIO BY SAMPLE YEARS Frequency distributions of the ratios for public utility companies in selected typical vears War year with high prosperity 101 7% Fairly normal year with increasing activity 1919% Ratio Groups Fre- | Per- quencies | centages Fre- guencies Per- centages Totals == 120 100 168 100. 00-079 08-159 16-239 24-310 % 9 14 3.08 6.92 10.77 4.62 ‘8.46 16.92 “NR L9 3.17 7.14 10.71 22 1R 32-399 40-479 48-559 56-639 19 24 22 4 35 5 7 20.83 14.88 16.08 1? 50 64-719 8 72-799 | 8 6.1% 80-879 2 1.24 | 88-950 3 2 x1 12 7.14 4 2.38 2 1.19 1 70 Averages: Approximated Mode .482 .427 *Following the indications of the Harvard B Curve. Year of depression and declining activity 1921% Fre- | Per- quencies | centages 1R2 100 0 75 5.49 17.57 22.52 14.84 14.29 13.74 10 32 Al 26 oh 5 3 | 2.75 2.78 1.65 Be 421 Recent year of prosperity and normal activ- itv 1924% Fre- Per- quencies | centages 100. 1.12 3.35 3.91 18 44 43 °8 21 “4 24.02 15.64 11.73 13.41 7 | 3 2.23 3.91 1.68 86 +10 SURPLUS AND RESERVES TABLE Va.—=""15TAL EQUITIES RATIO Frequency distribution of the ratios of surplus and reserves to total equities of 200 public utility companies. 1915-1924 Ratio Groups (~209)-(-18) (=179)-(-15) (~149)-(-12) (—119)~(-00) (~089)—(~06) (-059)~(-03) (-0201—( 00) 00-029 03-059 06-089 09-119 12-140 15-179 18-209 21-239 24-269 27-200 30-329 33-359 36-389 30-419 12-440 . 1 Ratio Freauencies > 14 - 238 309 231 182 Ice ry 11 21 17 1° Cumulative Freanenciee J IR 27 21 40 54 76 314 623 854 1036 14R"Y 1280 1342 1395 1432 146% 1486 1503 1521 1530 co Percentage Tietribntion 8 rg .58 .26 .58 01 1 49 15.44 20.05 14.99 11.80 aq 70 6.03 4.02 3.44 2.40 2 14 1.36 1.10 1.17 .58 ay. Cumulative Percentages .58 { 16 1.74 2.00 2.58 3.49 1 01 20.35 40.40 55.39 67.19 76 0% 83.01 87.03 90.47 92.87 Q5 01 96.37 97.47 98.64 99.22 100 00 Average: Aporoximated Mode Buirerixy No. 20 SURPLUS AND RESERVES TABLE Vb —""15TAL EoUTTIES — RATIO BY GEOGRAPHICAL LOCATION Frequency distributions of the ratios of public utility companies by territorial divisions Ratio Groups East Middle West Fre- | Per- Fre- y Per- quencies | centages | quencies centages Totals... (-209)~(-18) {~179~(~15) 293 100. 12% 100. 5 4 .83 _B§ 23 .23 16 (~149)—(-12) —119)-(-09) -089)-(—06) ~059)-(-03) 020%—{ 00% .69 .28 .97 1.80 1 89 12 00-029 03-059 )6-089 9-119 “2-140 | 75 104 24 91 7c 10,37 4.38 13.00 12.59 (0 27 73 :07 76 40 IT] .6.70 ‘1.49 7.38 9.15 0 28 15-179 .8-209 11-239 4-269 } 7-200 i6 30 2 6 6 7.75 1.15 $.43 3.60 3.60 28 9 20 8 3S 65.41 5.64 4.58 1.83 1.37 30-320 16 33-359 16 36-380 1a 30-419 o 19-440 2 2.21 2.21 1.94 10g .46 | .23 2 46 2 ru Averages: Approximated Mode 0870 JIS South Fre- | Per- Fre- | Per- quencies | centages | quencies centages 100. 158 100. 3 2 1.34 2.23 0 0 | saan 2.53 37.98 31.02 10.13 9.49 3.80 .63 .63 .63 163 1.90 .63 3 1.34 “89 ‘89 2 93 o | 0 u 0 £ 0 30 10 15 36 bY) 13.39 21.87 20.09 16.08 17 08 60 49 16 L5 z | 3.57 1.34 "180 0 3 x n cee .45 "7a } n n qs J30 THE Sources oF Pusric UriLity CAPITAL - SURPLUS AND RESERVES TABLE Ve—=""7O0TAL EQUITIES RATIO BY SIZE OF COMPANY Frequency distributions of the ratios of public utility companies according to the amount of total equities Ratio Groups Totals...... (-209)- (18) 1700-15) (-149)~(-12) (~119)—(-09) (—089)—(-06) (~059)—(-03) —020%—{ 00) 00-029 03-059 06-089 09-119 172-140 15-179 18-209 21-239 24-269 277-200 30-329 33-359 36-389 39-419 47-440 Averages: Approximated Mode With assets of 85-0 millions Fre- | Per- quencies centages 480 100. 1.04 2 62 42 .62 .21 {| 8K > my 18.13 20.21 17.08 10.83 R 06 d »2 23 5.88 2.92 L.67 1.88 1.67 1.04 1.04 .83 62 £9 2 D5, With assets of 10-49 millions With assets of 50 millions and over Fre- Per- Fre- | Per- quencies centages | quencies centages 770 100 283 100. Jl ad 77 26 77 1.67 1.67 0 n 13 1% J 0 n 137 168 103 e7 ks 17.58 21.56 13.22 11.17 R QQ ‘4 46 13 e 4.95 15.55 16.25 15.19 13 AR 1.24 1.95 1.75 2.31 | © 27 25 8 Lo 10 0.54 8.83 2.83 3.53 T §2 1.28 190 9 1.16 & ‘64 1.03 Q 5 5 1 2.12 1.77 1.77 as 28 IR BuLLeTmn No. 20 SURPLUS AND RESERVES TABLE 1Vd.— ~ TOTAL EQUITIES RATIO BY KIND OF COMPANY Frequency distributions of the ratios of public utility companies according to type Ratio Groups Gas and Electric Fre- | Per- quencies centages Totals. ....... (-209)-(-18) (~179)—(-15) Qn? 100 1 1 (~149)—(-12) ~119)-(-09) -089)—(~06) (-059)—(~03) _020Y—( 00% ) ” 22 id 1.08 1 10 00-029 03-059 06-089 09-119 12-149 130 182 i25 103 ng 14.10 19.74 13.56 [1.17 9.65 15-179 18-209 21-239 24-269 27-200 5.86 1.77 4.77 3.69 3.04 CR 30-329 33-359 36-389 39-419 42-440 19 17 la 2.06 1.84 1.63 .92 * 15 Averages: Approximated Mode Traction Fre- | Per- quencies centages 388 100 1.29 7 06 1.80 1.03 2.06 1.80 7? R4 59 5 15.21 12.36 19.85 14.43 11 OR ’ uh 13 3 7.73 3.35 1.55 52 .52 .26 ux ud Holding Fre- | Per- quencies centages 100 "43 2.59 ‘13 49 79 79 23 PPS 21.12 34.05 12.50 9.92 8.190 3.88 2.16 1.29 .43 1.29 a 9 .43 1.29 0449 Tue Sources oF PusLic UriLity CAPITAL SURPLUS AND RESERVES TABLE IVe—=——"3GTAL EQUITIES RATIO BY SAMPLE YEARS Frequency distributions of the ratios for public utility companies in selected typical vears War year with high prosperity 101 7% Fairly normal year with increasing activity 1910% Ratio Groups Fre- | Per- quencies | centages Fre- quencies Per- centages Totals. ..... (~209)~(-18) {(-179-(-1%) 127 lon. 166 100. .79 "60 (-149)-(-12) (~119)~(-09) (-089)—(-06) (~059)—(—03) -020)—( 00) 1 q 7 .79 0 ,60 .60 .60 1.20 Y 41% 00-029 03-059 06-089 09-119 17-140 27 30 18 $4 21.26 23.62 14.17 11.02 nN 74 27 19.89 19.89 12.66 9.64 oO /K4 i 16 Ca 15-179 18-209 21-239 24-269 27.7200 £72 79 3.94 2.36 1.87 4.82 2.41 6.02 3.61 0 30-329 33-359 36~389 39-419 42-449 1.81 1.20 1.20 ¥ n ok 2 79 “0 © | Averages: Approximated Mode .047 .047 ¥Following the indications of the Harvard B Curve. Year of depression and declining activity 1021% Fre- Per- quencies ! centages 170 100. .56 1.68 .56 56 1.68 1 12 26 ar 22 a 14.53 18.99 15.08 12.29 Q 48 7.26 5.03 2.23 2.79 1 192 1.68 .56 56 1.68 86 E Recent year of prosperity and normal activ- itv 1924% Fre- | Per- quencies ! centages 100. 1.18 Nn 1.18 ‘59 - n I: 8.88 13.62 18.93 15.38 11 KR} 26 My In 5.92 5.92 5.32 2.96 1.96 1.78 .59 1.78 1.18 ¢ 20 BuLrerin No. 20 PREFERRED STOCK TABLE Va. — —16TaT BouTTIES RATIO Frequency distribution of the ratios of preferred stock to total assets of 200 public utility companies, 1915-1024 Ratio | Groups 00-039 04-079 28-119 12-150 16-199 20-239 24-279 28-310 32-359 36-300 Ratio . | Frequencies 1. « 150 157 118 62 37 26 iy Cumulative Frequencies 289 130 596 714 776 R13 839 R58 Percentage | Distribution -54 48 5.30 15.75 7.23 4.31 3.03 2.21 Cumulative Percentages 19.35 33.69 51.17 69.47 83.22 90.45 04.76 97.79 100.00 Average: Approximated Mode PREFERRED STOCK TABLE Vb—"T6TAL BOOTIES RATIO BY GEOGRAPHICAL LOCATION Frequency distributions of the ratios for public utility companies by territorial divisions Ratio Groups East Fre- Per- quencies ! centages | Totals... . 771 100 00-039 04-079 08-119 12-159 16-199 20-239 24-279 1. 28-319 10 32-359 | ° 36-399 1 6.27 18.45 9.96 15.88 16.62 18.08 4.05 3.60 2.95 4.06 Middle West y West South Fre- | Per- quencies | centages Fre- | Per. Fre- | Per- quencies ' centages | quencies | centages 100. 307 100 93 .65 15.36 10.92 59 19.21 29 9.45 30 9.77 18 5.86 13 4.23 2.61 9.79 15.99 24.48 11.19 20 36 3€ 22 6.87 1.53 15.26 27.48 26.72 17.56 .76 2.29 1.53 20 | 12.59 11.88 13.98 2.10 3 q 2 0 Averages: Approximated Mode TrE Sources oF PusLic UtiLity CAPITAL PREFERRED STOCK TABLE Ve—~ "TOTAL EQUITIES | RATIO BY SIZE OF COMPANY Frequency distribution of the ratios for public utility companies according to the amount of total equities With assets of 5—0 millions With assets of 10-49 millions With assets of 50 millions and over Ratio Groups Totals... - 00-039 04-079 08-119 12-159 16-199 20-239 24-279 28-319 32-359 26-300 Fre- Per- juencies centages v8 ® 100 § 71 9.39 15.50 13.87 20.41 20.82 5.31 3.27 4.90 RR? .0 1 1x & Fre- | Per- quencies centages 466 100 2 5 62 00 s.22 12.02 13.30 19.30 20.39 11.80 7.73 4.94 2.58 1.72 95 55 36 23 12 2 Fre- i Per- quencies centages 100. 4.08 25.85 15.66 17 60 8.16 8.16 8.84 4.08 1.36 6 12 » 3 2 o Averages: Approximated Mode PREFERRED STOCK TABLE Vd.— “TOTAL EQUITIES RATIO BY KIND OF COMPANY Frequency distributions of the ratios for public utility comnanies according to tvne Ratio Grouns Totals.. 00-039 04-079 08-119 19-180 16-199 20-239 24-279 28-319 32-359 24-200 Gas and Electric Traction Fre- Per- | Fre- | Per- quencies centages quencies centages s0K 100 21a 100 9 4.74 15.05 18.56 18.97 18.97 12.99 4.95 3.51 1.86 40 5.66 15.09 6.60 23.59 21.24 16.51 3.30 3.30 omy 14 “rn £2 63 24 17 n 45 35 7 7 04 Holding Fre- | Per- quencies centages 1£1 100. 2.70 45 1.80 4.97 RJ 9 “a 12.42 12.42 19.25 8.07 5.59 0. 33 3 a KB Averages: Approximated Mode y(] BuLrerin No. 20 PREFERRED STOCK TABLE Ve— TOTAL EQUITIES RATIO BY SAMPLE YEARS Frequency distributions of the ratios for public utility companies in selected typical vears Ratio Groups War year with high prosperity 1G1 7% Fre- Per- quencies | centages Totals... 60 100 00-039 04-079 08-119 {2-150 3.33 13.33 13.33 18.34 16-199 20-239 24-279 . 28-319 32-359 - 16-300 18.34 13.33 6.67 3.33 5.00 5 00 Fairly normal year with increasing activity 1910% Fre- | Per- quencies | centages R3 100 1 2.05 14.46 18.08 21.69 10.84 10.84 3.61 1.20 241 " Ld 5 Year of depression and declining activity 1921% Recent year of prosperity and normal activ- ity 1924% Fre- Per- Fre- Per- quencies | centages quencies centages 108 100. 2.49 16.04 14.16 15.00 5.56 12.04 10.18 19.43 21.30 16.67 7.41 2.78 2.78 1.85 15 16 17 1 16.04 15.09 6.60 5.66 .94 |.8Q 23 18 £ 3 fr 6 1 3 1 Averages: Approximated Mode ... % hdd *Following the indications of the Harvard B Curve, COMMON STOCK TABLE Va. — TOTAL EQUITIES RATIO Frequency distribution of the ratios of common stock to total equities of 200 public utility companies, 1915-1924 Ratio | Ratio | (Grouns Freauenciae 02-069 07-119 12-169 17-210 “3 61 - 22-269 27-319 32-369 37-410 130 12.8 118 66 42-469 17-519 57-560 {4 Average: Approximated Mode 2M Cumulative Freauencies 28 96 187 14 454 582 700 766 812 254 ye Percentage / Cumulative Distribution Percentages > ng Sood 10.04 {8 12 3.09 10.60 20.64 35.76 50.11 64.24 77.26 84.54 89.62 94.26 LOO 00 14.35 14.13 13.02 7.28 5.08 4.64 KE 74 THE Sources oF PusLic UtiLity CAPITAL COMMON STOCK TABLE VIb.— TOTAL EQUITIES RATIO BY GEOGRAPHICAL LOCATION Frequency distributions of the ratios for public utility companies by territorial divisions East Viddle West West South Ratio Groups Fre- Per- juencies | centages [otals. ...... 316 100. 02-069 07-119 12-169 17-219 0 17 50 2.48 92.49 87 15.83 16.14 _2.€8 15.10 4.72 3.16 3.48 .95 22-269 27-319 32-369 37-419 51 16 45 42-469 47-519 52-569 ir 1. 3 Averages: Approximated Mode .242 Fre- quencies | Per- centages | 312 100. 30 15 56 37 18.26 49 15.38 35 1.23 7 5.45 11 3.53 | 3 196 29 9.29 3.53 2.62 4.81 17.95 an Fre- Per- Fre- Per- quencies | centages | quencies | centages 100. 3.90 3.90 10.39 5.84 Q 1. 1.61 10.48 17.74 13 13 9 19 8.44 8.44 5.84 12.34 12.34 16.23 12.34 2 26 15 7.26 21.77 20.97 12.10 19 25 19 6 4.84 3 | 2.42 1 ‘a1 107 COMMON STOCK TABLE Vle—F&TAL EQUITIES RATIO BY SIZE OF COMPANY Frequency distributions of the ratios for public utility companies according to amount of total equities With assets of 5-9 millions With assets of 10-49 millions With assets of 50 millions and over Ratio CITroUDS [otals.......- 02-069 07-119 12-169 17-219 22-269 27-319 32-369 37-419 42-469 47-519 532-560 Fre- | Per- [ Fre- . Per- juencies centages quencies centages | 268 100. LY 30 30 1.49 5.97 11.19 11.19 11.19 14.93 10.45 8.58 ’ 50 R11 2.95 7.81 0.55 17.09 30 10 28 23 87 70 58 3 [8.35 14.77 14.35 4.885 po 20 10.08 4.10 10 83 15 3.16 13 2.74 16 3.38 Fre- | Per- quencies centages 100. 5.52 9.20 6.75 15.96 te IF 22 20 7.98 11.04 13.50 12.27 | 4 18 ” 2.45 [1.04 4.29 Averages: Approximated Mode BuLrerin No. 20 COMMON STOCK TABLE VId.— TOTAL EQUITIES RATIO BY KIND OF COMPANY Frequency distributions of the ratios for public utility companies according to tvpe Ratio Groups Totals. ..... 02-069 07-119 12-169 | 72-210 22-269 27-319 32-369 37-419 42-469 47-519 EY_SLQ Gas and Electric Traction Holding Fre- Per- | Fre- | Per- | Fre- | Per- quencies centages quencies centages quencies centages 527 100. 100 100. 1 56 Q4. .09 C78 10.63 15.04 79 ..62 436 2.33 5.13 11.54 13.46 ad 372 78 64 64 2 14.81 12.14 12.14 5 21 25 39 45 23 | 9 0 ry 11.21 17.49 20.18 10.31 4.04 4 in oa 25 9 17.30 16.02 5.77 9.62 oy 33 6.07 6.26 6 !2 5 9 Py | 3.21 5.77 2.85 Averages: Approximated Mode COMMON STOCK TABLE Vle— TOTAL EQUITIES RATIO BY SAMPLE YEARS Frequency distributions of the ratios for public utility companies in selected typical vears Ratio Groups Totals 02-069 07-119 12-169 17-210 22-269 27-319 32-369 37-410 42-4£9 47-519 SILKAQ War year with high prosperity 101%7% Fre- 11enciese Per- centages Rik 1 GO 6.06 7.58 9.09 13.64 18.18 18.18 3.13 3.03 £.06 A OA Fairly normal year with increasing activity 101Q% Fre- | Per- fniencies centages OA 100 ‘ N 1.26 4.26 9.57 9.57 20.21 15.96 10.64 9.57 4.26 5.32 6 3% ‘ 0 15 10 9 2 Year of depression and declining activity 1921% Fre- | Per- auencies ' centages 1 “Nn on 1.36 1.82 15.45 10.91 13.64 5.45 1 f c 4 55 €.26 2 A4 Recent year of prosperity and normal activ- itv 1074% Fre- Per- auencies | centages 100 100 14 19 18 4.59 12.84 17.43 16.51 7 15 13 4 6.42 13.76 11.93 3.68 5.50 2.75 41 80Q 6 ! 3 Averages: Approximated Mode .... ‘uuu *Following the indications of the Harvard B Curve. PUBLICATIONS OF THE BUREAU OF BUSINESS RESEARCH UNIVERSITY OF ILLINOIS Bulletin No. 1—TIllinois Taxes in 1921. 8 pages. (Out of print.) Bulletin No. 2—Illinois State Revenue, 1895-1920. 12 pages. (Oui of print.) Bulletin No. 3—The Tax Rates of Illinois Cities in 1921. 16 pages. (Out of print.) Bulletin No. 4—Books About Shoes. 20 pages. (Out of print.) Bulletin No. 5—Methods of Training Employees in Stores of Mod- erate Size. 20 pages. (Out of print.) Bulletin No. 6—Books About Books. 28 pages. Bulletin No. 7—The Statistical Characteristics of Bookstore Sales. 32 pages. (Out of print.) Bulletin No. 8—The Method of Analyzing Business Data. 46 pages. (Out of print.) Bulletin No. 9—The Current Ratio in Public Utility Companies. 28 pages. Bulletin No. 10—The Productivity Ratios of Public Utility Companies. 32 pages. Bulletin No. 11—The Natural Business Year. 28 pages. Bulletin No. 12—State Expenditures in Illinois, 1895-1924. 14 pages Bulletin No. 13—The Disposition of Income in Public Utility Com- panies. 42 pages. Bulletin No. 14—1llinois Appropriations for Social and Educational Purposes. 13 pages. Bulletin No. 15—The Earning Power Ratios of Public Utility Com- panies. 44 pages. Bulletin No. 16—The Nature of Cyclical Flucuations in Electric Power Production Data. 48 pages. Bulletin No. 17-—Chicago as a Money Market. 61 pages. Bulletin No. 18—Property Investments in Public Utility Companies. 38 pages. Builetin No. 19—The Automobile and the Village Merchant. 42 pages. Bulletin No. 20—The Sources of Public Utility Capital. 52 pages. < ou 7 — : pat THE Sources oF PusLic Uririty CAPITAL T le nN 3 oa Ae “vr. COMMON STOCK aw VIb.— TOTAL EQUITIES RATIO BY GEOGRAPHICAL LOCATION Frequency distributions of the ratios for public utility companies by territorial divisions AS a [3] > Ch go obs East Middle West West South AN ol Fre- Per- guencies | centages 100 Fre- Per- quencies | centages Fre- Per- quencies | centages 100. Fre- | Per- quencies centages 124 100. i 3106 312 100 a lly Ny v.48 2 9.49 a7 | 14.87 50 15.83 16.14 12.66 15.19 1.75 3.16 3.48 ‘05 J 3 + 30 15 56 57 48 35 17 Jol 9.62 4.81 17.95 L » 13 1: 19 19 25 10 3.90 2h Le 33 5.84 R 44 ? 44 & 84 12.34 12.34 16.23 12.34 13 22 n 1.61 10.48 17.74 ) 3 2? 9g 51 40 48 15 10 18.26 15.38 11.22 5.45 7.26 21.77 20.97 12.10 + i9 9 GQ 11 3.53 3 96 29 9.29 £ 4.84 2.42 81 nated Mode .242 ae 1 r r m Bs ot 3 Ty — o 0 2 oy OD ND wo - 0) COMMON STOCK ABLE Vle—T5TAL EQUITIES RATIO BY SIZE OF COMPANY Frequency distributions of the ratios for public utility companies according to amount of total equities tio ups With assets of 5-0 millions With assets of 10-49 millions With assets of 50 millions and over Fre- Tuencies Per- centages Fre- | Per- | quencies centages Fre- quencies Per- centages 100. 8.52 9.20 6.75 IS 0&6 16R 100. 474 100. 163 69 -19 169 219 269 30 319 40 369 28 19 23 469 27 519 11 560 2Q A 19 11 19 50 1 10.53 17 00 1 11 26 11.19 14.93 10.45 !_858 87 72 68 bX 1 18.35 14.77 14.35 4.85 3.16 2.74 3 38 1° 12 22 20 4 18 7.98 11.04 13.50 12.27 10.08 | 4.10 10.83 15 13 a3 | 2.45 11.04 4 70 a > rl 8: 4. mated Mode %4 0 0 3 3 * Jee Po > FS 0 ‘on T