The sources of public utility capital

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Monograph

Identifikator:: 1765274494

URN:: urn:nbn:de:zbw-retromon-144018

Document type:: Monograph

Title:: The sources of public utility capital

Place of publication:: Urbana

Publisher:: University of Illinois

Year of publication:: 1928

Scope:: 52 Seiten; graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: IV. The ratio of surplus and reserves to total equities

Collection:: Economics Books

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.

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