SOUTHLAND FARMERS' CO-OP. ASSOCIATION, LIMITED.

NZ Truth, Issue 1105, 3 February 1927, Page 13

SOUTHLAND FARMERS' CO-OP. ASSOCIATION, LIMITED.

Gondensed Balance- Sheet, July 31; 1926.

Note: * Indicates increase iind f decrease compared with last- year's flgures:

consists of 33,655 £5 shares of three different classes. These shares are fully called-up which' make's £168,275, less calls m a'rrear. £8051 making the paid-up 'capital £160,224. Dividends • Now dividends have to be calculated' as a percentage upon paid-up capital, but it is a fact that the greater part of this paid-up capital was lost as a result of the slump and to-day there remains only £65,000 of the amount. The position then is that whilst dividends have to be calculated upon £160,224 .of ; paid-up capital only £ 65,000 of "the amount actually v exists and. is at work. The net earnings for the current your were just over £10,000. Now on the balance-sheet paid-up capital this represents an earning power of only 6.2 per cent. If the calculation,' however, is , - worked upon the 1 actual existing capital of ' £65,000 then the result is the very handsome net earning of a shade under 15J/<> per cent. : It is a' tremendous difference and one which will carry a lot of weight in' the search for additional, capital which the company urgently requires. . Under the ', circumstances the first Step m £econst:-uctibri is\ to write off the whole of the lost capital amountinsr to £95,000 and to do this all' the £5 sh.v os • should' be' written "down to £2 10s. .■■•'. , -

hauled bx practical men would represent real and not fictitious or doubtful values. The present .fictitious assets of £95,000 representing accumulated , losses would entirely disappear and per ..contra the capital account would represent real working capital upon which regular 7^2 pep cent, dividends could easily be '. paid. . ' •"/ These factors would N operate entirely m favor of placing new shares. , Sentiment for a farmers' concern may influence a few people to put money into shares m the company, although no dividend .has been paid for some time; but show the ordinary investor who is devoid of sentiment a prospective regular 7% per cent, and he will surely put his money up. If this company is to function profitably and successfully the lost £95,000 must be replaced m its coffers and to attract this money the finances of the concern must be put m order. It is idle to claim either that the additional capital is not needed or that it cannot be raised. If £"160,000 was profitably employed m the pre-slump period it can at least be as profitably employed now. Provided the directors will set their house m order and : show shareholders that .-■■■their money can again be profitably used the shareholders will readily respond; but the present chaotic state of affairs must first be remedied.

LIABILITIES. : ASSETS. Capital paid-up 160,224 *965 Land and buildings .. 24,898 *160 Profit and loss 23,478 *4771 Plant and fittings ... 6325 *44 — — Investments \...i.. : . 798 «i 3 183,702 *5736 Stocks : 14,915 f4123 Debentures ..-.-..•,-..... 57,862 *4287 Debtors ..136,672*24046 Creditors 30,046 k *4680 Bad debts susp. .... 12,092 — Creditors' trade 1534 >443 Accumulated losses . 83,162 — ' Bank 5713 *4994 £278,857*20,140 £278.~857 *20.140