COMPANY BALANCE SHEETS.

Otago Daily Times, Issue 19501, 9 June 1925, Page 6

COMPANY BALANCE SHEETS.

PERPETUAL TRUSTEES ESTATE AND AGENCY COMPANY OF N.Z. (LTD.) Paid-up capital 1919-20, £12,500; 1921-23, £15,000; 1924-25, £17,500.

• Subject to deduction ol income tax lor Tear 1024-25. Tho not profit for tlio past yoar is £251 in excess of that of 1923-24 and is almost up to the high level mark attained live years ago. There is this difference, however- that whereas tho latter was reached by a sudden bound, the present position has been arrived at more leisurely and would be expected to be loss liable in consequence to any corresponding set-back. Tho figure, £6519, indicates a return of 37.25 per cent, on the paid-up capital. 'The dividend recommended for the year is the customary 15 per cent., a satisfactory return to the proprietors, but no larger than when tho profits were three-fifths of what they now are, and shareholders are placed in the somewhat anomalous position of seeing a sum equal to a third more than their °dividend going to swell reserve fund. When the depreciation provision has been made and goodwill with cost of alterations written oft, the net profit is over-drawn, and recourse is made to the floating balance which by the resulting depletion is brought lower than for some years past. With reduced taxation rates, it is probably not deemed necessary to maintain tho carry forward at its former proportions. A striking feature of tho figures is that, whereas the gross profit of £20,323 is well above any previously secured, and is over £SOOO higher than that of the prior year, the net result shows a comparatively small advance. It won Id almost, seem that the

new business acquired has taken a full share of (ho expenditure. General charges which had fluctuated of late, years have risen in no uncertain fashion- They now stand at £12,678 —an increase of 50 per cent, during the 12 months. They are grouped ns usual and, as there is nothing now among the items mentioned, it may bo assumed that there is a general advance all round. The rise in the expenditure under stationery and advertising tends to corroborate this view. The balance sheet totals are somewhat lower than usual. This is the effect of the smaller amounts representing balances due to and by the company, which occupy the olrief position on their respective sides. Relatively to each other these two items have not altered much during 1924-25 as will be seen below, viz. :

There is a certain vagueness in the definition of these two headings and for the benefit of shareholders something more precise appears desirable. Reserve fund will by the latest proposed addition, bo brought up to the amount of the paid-up capital- The time seems ripe for the directors to take another move in the direct-ion of relieving shareholders of a part of their liability by applying some of the reserve accumulations towards reducing the £3 11s that is now outstanding on each share. Perhaps as such a. step was taken five years ago and two years ago, it may bo judged advisable to wait 12 months more to keep up an even order of suoesaion by which time it may not unreasonably be expected that the reserve fund will have left the paid-up capital behind. In any' case it looks as if shareholders can regard with complacency the fact that each share carries with it a liability of 50 per cen t. jl'ho method of the grouping of the assets is not quite plain. Instead of mortgages being coupled with debentures, they are placed with leaseholds and buildings. As the last-named pair apparently represent the whole of the company's fixtures, they might naturally bo expected to be kept apart from the others, unless their aggregate is too small to make it worth while. This is an asset that has risen £6243 since the previous balancing date, and it looks os if mortgages wore not wholly responsible for this increase as the sum of £482 is suggested to be written off goodwill and cost of alterations at Invercargill office in reflect of that period. Debentures remain at their former total of £19,550, covering the margin between Balances due by and to the company. The bank account shows the substantial balance at credit of £12.806, while office furniture will bo reduced to £550 if the recommended depreciation is affected. A concern of this nature, bearing the same relation to a commercial company as the professional business man to the merchant, possesses the groat privilege of being independent of the valuation of stocks, (ho wear and tear of machinery, and the obsolesonco of plant- Its chief capital consists in the brains of those who conduct its business, and whoso personality is in the minds of dents perhaps merged to a. certain extent in the larger influence of the company, yet upon whose shoulders lie the v'aried responsibilities that have to be borne for its successful management.

liefer? 05. Gro^ prollt. Xet profit. Divdnd. A pi. 30. £ £ £ p.n. 11110 ... ... 14.001 V»86 3,802 15 1020 ... 04,750 13,330 6,630 15 1021 ... 10,158 1 820 5,654 15 1022 ... 17,510 13,804 4,6.10 15 1023 ... 10,046 4,684 15 1024 ... 17,885 15,207 6.268 U 1025 ... ... *20,641 20.323 6,510 15

Balances fine tf> t.he com pa nr Balances due l»y tlie company. IJlflprcnca. Ratio. Year. £ £ £ * 84.20 1918-19 ... 64.207 76,174 11.067 1919-20 ... 08,047 77,017 8,370 80.13 1920-21 ... 00,004 00,15!) 111 00.74 1921-22 ... 47,974 50,442 2,488 0.1.11 1922-23 ... 02.100 99,683 37,177 G3.30 1923-24 ... 81,401 100,574 10,173 80.o:i 1924-25 ... 6:5.542 82.900 10,148 70.57