Re Otago Farmers' Co-operative Association of New Zealand (Limited). TO THE EDITOR.

Otago Witness, Issue 2674, 14 June 1905, Page 23

Re Otago Farmers' Co-operative Association of New Zealand (Limited). TO THE EDITOR.

Sib,—l have received a copy of the above association's report and balance sheet for j the year ended 31st March, 1905, and on ' comparing it with the balance sheet for tha { previous year it .seems to me that the posij tion is not such a glowing one as the clireci tors would have us believe. Their first remarks, dealing with the increase of busiI'osb—viz., £1000 more—are counterbalanced by the fact that to attain that end they have c.pent an equal amount. Surely this cannot be called good business; and certainly new business to acquire which takes the whole amount in expenses cannot he worth the having, unless the expenses can. be shown to be non-recurring, which is impossible. But looking more closely into the matter, I find that to acquire this £1000 of new business entailed an expenditure oj" very much more than £1000, ->r.ci rhe iol lowing comparison of revenue accounts will piove my statement: ExPENDrfcKvf "* . '_ 1903-4 ■ isol-$ • " In(11 months). "(12 ln'cfntlis). " crease. - £ s d £■-- s-cl £~ s <i Wage 3 and salaries .. 3142 5.4- 3955 3 7 812 IS 3 Working ?ncl , incidental expenses (including licenses, insurances, rates, et.) 892 14 10 IiOS 16 215 6 3 Travelling expenses 536 a 4 760 16 4 236 14 0 Rents .. 160 5 0 172 5 0 12 0 0 Stationery, printing, and advertising .. 228 16 6 439 3 3 210 6 9 Directcm' travelling expei ses 40 0 0 51 14 6 11 14 0 5000 4 0 6455 4 2 1496 19 8 Thus it will be noticed that while the expenses for 14 months were £5000, for the next 12 months they were £1500 more, and this to acquire £1000 more of business —a direct loss of £500 on the increased turnover. But to make the compaiison more accurate, the year 19034 should have the expenses of the two extra months deducted, and* if one-seventh of £5000,—viz., £714, is taken off, it meansthat the actual figxu'es for the two periods will show the expenses of the latter to be £2100 more than the previous year. Now. to take it another way, the net profit for 1903-4 -was £3395, but allowing one-seventh off for the two ■extra months gives the net profit for 12 months as £2910. For 1904-5 the net proStehows £2869, a decrease of £41, showing a loss upon the year's transactions, and then £2100 more was spent only to attain such a sorry result. Surely, sir, on the strength of these figures, the directors cannot have much reason for congratulation, and one ■would like some more solid assurance of the capabilities of the present management before taking up fresh shares in this company —I am, etc., 1-'_\R3i:l t>