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-
