COMPANY BALANCE SHEETS.

Otago Daily Times, Issue 19136, 2 April 1924, Page 6

COMPANY BALANCE SHEETS.

BOOTH, MACDONALD AND CO. LTD.). Mortgage Year Paid-up dcbiai- Re- Net Div. ended capital. tnres. serves, result. Ord. Prf. Dec. 31. £ £ £ £ p.c. P-c. 1918 142,666 1919 145,303 1920 345,879 1921 258,153 1922 259,208 119,325 968 435.313 -3$ 1923 259,213 118.948 2,546 424,165 • * Profit. 4 Loss. Shareholders who looked to 1923 to retrieve the debit balance on the previous year’s trading have been disappointed. The gress profit of £60,511 is a considerable improvement, and in the years prior to 1921 would have been sufficient to show a balance on the right side. But of late years the charges have been mounting up, and the financial period recently closed shows a record in this duvei icn with a total of £84,679. Whether this burden should all be borne by that period is not apparent, but from the report it is evident that the allocations fur bad and doubtful debts, and depreciation of working plant are being made on a generous scale. The result is a loss on the 1923 working of £24,105, which, when added to the debit brought forward, makes a total of £41,475. Two years ago the balance on the other eide was £19,300, backed up by reserves of £20,000. For fhe first lime for some years the profit and loss account gives the clear statement fornthe period under review. Hitherto the appropriation of the preceding balance has been included, and the printed accounts did not atate the actual result of the year’s transactions. The various charges are grouped, but as the grouping differs from that of 12 months ago, a fair comparison is scarcely possible. Attention is drawn to a payment of £3375 for land and income tax in addition to ordinary taxation. The other item specially mentioned is interest on the lately issued mortgage debentures absorbing nearly £9OOO. With these two amounts added to commissions, etc., however, fhe total falls short by over £I9OO of the 1922 figure. The remaining charges are well in excess of the previous period, this being poseibly due to the special provisions made for bad debts and depreciation. Owing to the gross profit being 58 pfcf cent, more, the loss ie reduced some £II,OOO. The ratio of expenses to gross profit works out as follows: } Gross Expenses, profit. Ratio. 1918 £41,227 £48,208 85T53 p.e. 1919 48.174 61,064 78.89 p.c. 1920 57,411 74,049 77.63 p.e. 1921 64,239 85,459 75.17 p.o. 1923 73,515 38,201 192.44 p.o. 1923 _. ... *84,679 60,514 139.93 p.c. •Including depreciation. Each year has brought an inovease until in six years the expenses have more than doubled. The largest asset is stocks on hand, £146,479. Considering the fluctuations in values lately, there has not been so much variation here as might have been expected. Plant, took, drawings, etc., on the other hand, have swollen considerably, notwithstanding the allowance made for depreciation, and have now reached the sum of £81,423. Sundry debtors at £85,744 are appreciably reduced, due partly perhaps as a result of extensive writing off. Whether the bank account is included in these or in sundry creditors is not disclosed. Freehold property is little altered, the expenditure therein being slightly increased, while the amounts owing in respect thereon are practically the same. What the “amounts owing” may actually be cannot be ascertained from the balance sheet. The main liability is the one incurred comparatively lately for mortgage debentures, £118,948, which are possibly held chiefly by shareholders. The annual interest bill for these ehows that the money has been borrowed at a high rate. Sundry creditors at 23,079 are lower than they have been for some years, but the total liabilities to the public aggregate a similar figure to that of last year. Contingent liabilties stand at £13,66p to outsiders for bills discounted, and at £16,588 for dividends accrued and due to preference shareholders, The subscribed capital is now fully paid and is divided between preferences and ordinary share capital in the proportion, roughly of two to one. After the interest payments on mortgage debentures are met, there is onethird of the capital approximately with a preferential claim of 6$ per cent., and another portion requiring 6 per cent. Under such circumstances the prospects of a return to th© ordinary shareholder in the shape of dividend for his capital invested seem rather remote in the meantime.