COMPANY BALANCE SHEETS.

Otago Witness, Issue 3773, 6 July 1926, Page 23

COMPANY BALANCE SHEETS.

GOLDSBROUGH. MORT * COMPANY (LIMITED). Dirnd.

* Subject to 10 per cent, bonus to stall. During the past year the authorised capital of this company has been increased by onesixth. and now stands at a million and three-quarter pounds. The paid-up capital has followed suit, and has been subscribed to a similar extent. As the new issue ranked for dividend for the latter six months only, the net profit for 1925-26 should be increased by one»twelfth to be on a par with that of Its predecessor. It has increased by £11,119, or approximately one-thirtieth, to £331,326. To meet the usual 15 per cent In dividend and bonus, a sum of £250,000 is required, and. while reserve benefits by an addition of £62.500, there Is a transfer of £SOO0 —the same as twelve months earlier—to provident fund. By the time the 10 per cent, bonus is distributed to the staff it is probable that practically all the surplus will be absorbed. Considering the quantity of wool handled during the season—2Bl,77l bales as against 163,884 for the preceding one—a larger increase th the gross profit than £40.000 might have been looked for. Prices, however, satisfactory though they were stated to be, had fallen, and an abnormally dry season materially affected the stock returns. Allowing for these disturbing factors, the figures show great progress during recent years, both gross and net profits having almost doubled since March, 1923. On the capital employed at the close of the latest two financial periods, the net returns represent 21.35 per cent, and 18.93 per cent, respectively. During 1925-26 general charges have risen practically pound for pound with the gross profit, and although there is a reduction of £20,000 approximately on interest paid out, taxes are increased some £BOOO. Salaries and wages are the main items in bringing about the enhanced expenditure, which bears the relation of 60.84 per cent, to the gross profit—slightly in excess of that of a year ago. The curtailment of the interest bilf is not due to any diminution in the money borrowed on debentures, and the smaller sum borrowed on deposit is not sufficient to account foT the difference. It looks as if the revenue from interest had appreciably increased. The rapid growth of reserves has been a marked feature of the latest two annual balance sheets. Distributed under various headi. gs, the total Is not far short of £1,600,000. or about 90 per cent, of the paid-up capital. It is to reserve fund that the growth is mainly due. Besides the sum of £62,500 transferred from the year's surplus the issue of 250,000 fresh shares provided a premium of £187,500, which also found its way to the general fund. With the addition of a quarter of a million pounds to reserve during the 12 months, the recent issue has had the effect of strengthening the position of the company. The primary reserve of £IOO,OOO has special gilt-edged securities earmarked for it, the nominal value of which is considerably in excess of that sum, although reduced by the book valuation to Its equivalent. The rest of the reserves are spread over the general assets. The heaviest liability is debenture stock, which, at £1,434.658. costs the moderate rate of 4} pe cent. There has only been a slight reduction during the year, and, with the latest issue of capital, the security has oeen substantially Increased. Sundry creditors at £644,752 have altered 1- .le How far they may be interest-bearing is not ascertainable, but deposits, reluced to £111,374. will make a difference In this respect. It may be assumed that the deposits are fixed for a stated period, as there is sufficient money in bank to meet an obligation three and a-half times as large. The chief asset—advances —keeps step with the expanding business. After making due allowance for bad and doubtful debts, they have reached £3,687,113. Compared with the total assets their relation has been as follows—viz.:

The ratio is down by some 5 per cent., there appears to be a considerable amount of money available for further employment in this way when required. At March, 1925. it looked as if there was to be a return to the abnormal period of four years earlier, but the movement has been checked, and, if the good winter prospects that are anticipated are realised, there may be a further reduction in the relation later on. The cash assets, swelled by the money raised from the issue of capital, comprise nearly one million pounds. Apart from the investments appropriated for primary reserve, there are Government and other debentures and Inscribed stock held for £266,320. Reserves are thus further provided for to this extent. Deposits are up by £50,000, but it* Is tn the cash that the Increase Is most marked. As they are larger by nearly £300,000 than at March, 1925, it would seem that there is apparently some special object for which the major portion of the balance is Intended. Freehold and leasehold business premises have undergone additions to the extent of some £47,000. A depreciation allowance of £SBOB has been made, and this seems small in view of the capital value of the properties. They stand at £624,549, and are chiefly responsible for the rise in the total fixtures (including stock) to £974,233. As this is a concern in which fixtures play by no means the most Important part, some idea of the magnitude of its business is indicated by these figures. Properties, freehold and leasehold, with stock valued in all at £315,500 are in the company's hands, and 'should contribute materially to the revenue. The provision for wastage on plant, machinery, and furniture works out at about 8 per cent., and considering that a fair portion is new, the allowance looks liberal. Judging from the directors' report, the past season was not considered to be specially favourable In dlmatio conditions for the purposes of the company's business. Looking to the results, it would be Interesting to see what *an admittedly good season would show.

One oT the first New Zealand sawmills to be operated by means of electric power is Mr Halliday’s new mill at Waitane. The power was switched on from the Southland Power Board's station at Monowai on Wednesday. The total installation of motors required to operate all the plant is of 150 h.p. The results so far nays been more than satisfactory.

Paid-up capital. ReaervesGrots profit. Net and profit bontu Mar. 31 £ £ £ £ p.o. 1918 ... 702,737 700,630 366,644 184,933 15 1919... 773,010 659,018 359,318 160,545 15 1930... 773,010 612,146 299,901 100,484 15 1921 ... 916,849 617,426 356,789 61,410 15 1922 ... 916,849 651,296 377,656 174,487 15 1923 ... 966,849 709,279 431,112 170,425 15 1924 ... 966,849 783,703 498,039 231,130 15 1925 ... 1,500,000 1,342,143 806.413 320.207 15 1926 ... 1,750.000 *1,606,969 846,050 331,236 15

Advances. Total assets. Batio. £ £ p.c. 1917-18 ... 1.824,770 3,171,213 57.54 1918-19 ... 1,730.044 3,199,848 53.75 1919-20 ... 1,967,430 3,112,516 63.21 1930-21 ... 2,284.606 3.208.803 71.20 1921-22 ... 2.130,126 3.287,799 64.48 1923-23 ... 2,018,667 3,447,816 58.55 1923-24 ... 2.105.676 3.575,757 58.89 1924-25 ... 3,631,158 6,258.779 69.05 1925-26 ... 3.687,113 5,744,338 64.19