ABRAHAM AND WILLIAMS LTD.

NZ Truth, Issue 1148, 1 December 1927, Page 4

ABRAHAM AND WILLIAMS LTD.

Summed Up

the past five years are as under: —

Disclosed Net Profit 1923 1924 1925 1926 1927 ££.£££ 16,992 20,774 21,446 15,346 15,557

In 1921 and 1922 owing to the slump ordinary shareholders received no dividend, but preferreds got their usual 6 per cent. Dealing with the balance-sheet, the paid up capital remains as last year at £294.240. This is all m £6 shares of which £82,020 is m 6 per cent, preferreds, the balance of £212,220 being m ordinaries and the whole of the subscribed, capital is paid up. The nominal capital is £500,000, £150,000 being -preferred and £350,000 ordinary so that the company has unallotted preference shares to the value of £67,980 and or-

id mar ie s to the

value of

£137,780,

sa total of £205,760

available

ex-

ipansion of business

when the manage -

ment decides to yo ahead with an enterprising policy. The general reserve account also remains unaltered at £20,500 at which figure it has stood for many years past. It must be pointed out, however, that after the final dividend has been paid for the year under review there will remain m the appropriation account approximately £14,000 of undivided profits which aooumulated m 1923, 1924 and 1925. For all purposes of weighing up the company's affairs this amount must also be treated as a reserve available for dividends or any other purpose. Sundry oredltora at £70,168 Bhow a roduotion of £9975 for the year, but since 1923 the Item shows an lnorease of £21.256.

The bank overdraft also shows a big reduction of £23,174 and now stands at £31,656. When considering thia item it has to be remembered that the firm now has £20,000 of cash on short oall.

slight increase of £1589 over the previous year and compared with 1923 sTiow a reduction of a few hundreds of pounds only, indicating that the decreased net profits do not warrant any reduction m the amount of stock carried.

T-he plant account, which includes office furniture, showss a reduction for the year of nearly £2000 whilst comparing the 1927 total of £4534 with that for 1923 (£9234) shows the huge decrease of £4700.

It seems difficult to account for this reduction by depreciation alone; the amount is too large and the alternatives are firstly that a considerable secret reserve has been created m this item or that a portion of the plant has been sold.

Shares m other companies continue to register a steady reduction and now total only £626; during the four years from 1923, £209 has been written off this item.

" l This depreciation may have been necessary owing to reduction m the market value of these shares, but it would appear more probable that a secret reserve is being built up m connection with this item.

The only remaining asset is the item of cash on deposit at short call, £20,000, which has several times been referred earlier m this review.

When reviewing this firm's affairs two years ago, "Fiat Lux" then expressed the opinion that the concern could very profitably employ further capital to extend its business and also suggested the desirability of building up the general reserve.

Neither of these suggestions have been given effect to but on the contrary the contraction of working assets affords fairly conclusive evdence that the management prefers to curtail rather than extend its business operations.

ouuum mis conclusion oe correct it is inexplicable that any firm should desire to do this at a time when prospects are most propitious for expansion.

Whether this conclusion is correct or not the future operations of the company alone will tell.

LIABILITIES ASSETS £ £ £ £ Capital, paid up .. 294,240 — Property .. .. 73.042 J17.061 Reserve .. ..• 20,500 — Debtors, less reserve 318,669 t35.279 Profit and loss . . 21,826 * 27 Bills receivable . . 580 t 398 Stock on hand .. 20,839 • 1,589 Shareholders' funds 336,566 * 27 Plant .. .. 4,534 t 1,912 Creditors .. .. 70,168 t 9-975 Shares m other Bank M „ 31,556 t 28,174 ;; 20 «« J^J "£738,290 t33,122 £ 438,290 t33.122 NOTE. — 'Indicates increase and t decrease compared with last year's figures.

Condensed Comparative Balance-Sheet, September 30 t 1927.