What's it: Common stock or ordinary stock is a security representing ownership in a company. Therefore, buying it makes us a shareholder. And as long as we hold it, we have the right to earn profits distributed as dividends without

# Equity

## Preferred Stock: Characteristics, Pros and Cons

What's it: Preferred stock (or preferred share) is an equity security that ranks between debt securities and common stock. It usually does not has voting rights but has priority over ordinary shares in receiving dividends and liquidated assets. In

## Debt-to-Equity Ratio: Calculation and Interpretation

What's it: The debt-to-equity ratio is a leverage ratio by compares the relative proportions of a company's capital structure. Specifically, it measures how much debt capital is compared to equity capital. A higher ratio indicates higher

## Assets-to-Equity Ratio: Calculation and Interpretation

What's it: The asset-to-equity ratio is a financial ratio indicating the extent to which a company's assets are financed through equity. We calculate it by dividing total assets by equity. We can find this ratio in the DuPont

## Return on Equity (ROE): Calculation and Interpretation

What's it: Return on equity (ROE) is a profitability ratio to measure how high the return is on the invested equity capital. We get it by dividing net income by total equity, expressed as a percentage. Also known as return on owners'