Common Stock Ratio

Common Stock ratio - The common stock ratio is when you take a company or corporation's common stock and divide it by the company or corporation's total capitalization, and then express it as a percentage. To arrive at the capitalization of a company you take the market price of the whole company, which is calculated by multiplying the outstanding number of shares the company holds, by the price of each share. This is also referred to as the market cap or market capitalization. Capitalization takes into account the company or corporation's long-term debts, retained earnings, and stock.