Common stock ratios

Common stock ratios

Ratios that are designed to measure the relative claims of stockholders to earnings (cash flow per share), and equity (book value per share) of a firm.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Common Stock Ratio

The ratio of the value of a company's common stock to its total capitalization, expressed as a percentage. A common stock ratio is an expression of how much a company is financed by equity. A high ratio indicates that the company finances a great deal of its operations through equity and, perhaps, is averse to debt. This signifies a conservative financial plan, though some analysts question whether or not this is beneficial.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved