COMPANY BALANCE SHEETS.

Otago Daily Times, Issue 19616, 21 October 1925, Page 6

COMPANY BALANCE SHEETS.

TUB DRAPERY AND GENERAL IMPORTING COMPANY OF NEW ZEALAND (LIMITED).

At the last fivo annual balancing dates of this company, the paid-up capital ha s remained for al! practical purposes at the same figure. During the same period the net profit has risen .666,354. The eudden ebb of four years ago has been followed by a flood-tide which, as shown by the latest published statement of accounts, is still advancing. The gross profit has increased over £13,000, and of this the net return has benefited to tho extent of £8216. The total net profit is £51,040, giving a return of 11.22 per cent. With the greater portion of tho paid-up capital consisting of preference shares carrying 6 per cent., there is asum of approximately £36,000 available after that claim i s met. A distribution of £17,731, less than one-half, is made to the ordinary shareholders, leaving over £IB,OOO to swell reserves. The satisfactory result from the year's trading has thus tended more to the advantage of reserve than of the ordinary shareholders —a procedure which in the end should benefit all concerned. Disbursements at £211,184 are higher than they were three years ago, although in their relation to the gross profit their proportion is less. Among the various items mentioned as contributing to bring out this aggregate, there is no mention of depreciation, nor doe s the directors' report refer to such a provision. Bad debts written oil and doubtful debts provided for may come in under charges. . On tho liabilities side, tho most noticeable change in tho balance sheet is that mortgages have been reduced by £48,000. Apparently this is due to one mortgage having been repaid during the year, and this has been accomplished without any perceptible effect on the investments and bank balance. Sundry creditors are also less, and their difference of nearly £26,000 is reflected in lower stocks. Reserve fund stands at £30,115, and its augmentation from the 1924-25 profits raises it by nearly 50 pet cent., bringing it up to £45,000. In two years it has more than doubled itself. By the oddition of the floating balance, reserves are raised to £7O 656, equivalent to 16.51 per cent, of the paid-up capital. This may seem a comparatively small proportion, but it has to be borne in mind that a sum of £40,328 appears in investments on the other side of the balance sheet. As usual, Iho largest asset is stocks and shipments ivfioat, amounting to £230,868, which, however, is somewhat below the two previous annual figures. Taken in conjunction with the upward movement of the gross profit during the same period, this looks a healthy sign, and bears evidence of the extent to which the sales have exceeded the purchases. In this respect 1921-25 compares favourably with its predecessor. Sundry debtors, including bills receivable, aggregate £88,222, practically the same as 12 months earlier. This is probably made up mainly of email sums, and in the case of those amounts due by shareholders will have been subjected to the special concession >k 2$ per cent., as well as to the ominary retail discount, before appearing in the balance sheet. Tho other liquid assets consist of cash in the form of investments, cash in bank, and cash in hand, totalling just over £49,000 —slightly higher than last year. Investments are responsible for £40,328 out of this, and are distributed between New Zealand Government 4J per cent. Inscribed Stock and others. hat the actual amount in the former class may be, and at what valuation it is entered, ie not disclosed. The fixed assets at £248,692 are down by about £3OOO. How far depreciation may have contributed to this end is not apparent, but the annual wastage on buildings, fixtures, and plant amounting to a quarter of a million pounds cannot be negligible. Buildings doubtless occupy the chief place in the above figures, and other causes operating may balance, or more than balance, the depreciation on them, but fixtures and plant are only likely to diminish in value, and do so at an increasing ratio. A point to ho considered when shareholders are computing their annual return from the company is that holders of the ordinary class are granted a 24 per cent, discount on their purchases. This is a scheme that (should recommend itself to customers, who are shareholders, and the co-operative principle of it should react to the benefit of all.

Orel. rsiM-tm cupitiil. Hedross profit. Nc-r plmrc profit, ilivd. Aup. 20 £ £ £ £ p.o. 1318 ... 241,373 86,344 150.011 22,884 8 1319 ... 242,558 37,071 108.103 .10,853 tlO 1920 ... 354,587 113.438 184,706 37,166 flO I!>21 ... 437,01!) 34.401 181,633 * 5.314 nil 1022 ... .427,153 23,386 223,287 19.242 5 ins 3 ... 427.328 40,287 242.088 37.734 7 1924 ... 427,604 52.282 243.093 42.821 t 9 1925 ... 427,834 70.656 262,211 51,040 flO • Loss. t Incli; [ding bor 1US.