Another Interesting Tool for Stock Appraisal

CORRELATION has always been an interesting tool for those requiring measurements criteria, and to the ever-growing list, in the field of security values, we can always add one more-this time, a test of the relationship between per cent of gross cash income (later defined) per common share paid out as dividend, and the reciprocal of the rate at which the gross cash income is capitalized. From the standpoint of the common-stock investor, the most important.product of the company is the cash it produces. On a gross basis, for his purpose, this may be considered to consist of the reported earnings before depreciation, interest, and any purely book charges, but after income taxes.