COMPANY BALANCE SHEET.

Otago Witness, Issue 3823, 21 June 1927, Page 54

COMPANY BALANCE SHEET.

GOLDSBROUGH MORT AND COMPANY (LIMITED),

•Subject to 10. per cent, bonus to staff. A return of 18.80 per cent, is recorded for 1926-27, as against 18.93 per cent, for its predecessor. The distribution to shareholders, is again 15 per cent, in dividend and bonus. Reserve fund receives £50,000 and provident fund £5OOO, leaving a balance of £11,543 to meet the proposed 10 per cent, bonus to staff. If the bonus is of the same dimensions as last year, the net profit of £329,043 will be overdrawn by over £2OOO. The gross profit has reached its record figure in £855,272. Owing to a heavier demand by taxes and interest, its excess over the previous season is nullified, and a further sum of £2283 is absorbed as well. Expenses of management, at £321,742, remain much the same, although the amounts of their apportionment have altered. Apart from salaries, the largest charge is interest, which, including the claims of debenture stock, comes to £113,296. The total expenditure is equivalent to 61.53 per cent, o_£ the gross profit. The paid-up capital has been added to considerably of late years, and there is a proposal to increase it still further. It is approximately two and a-half times its amount of March, 1918, and, if the fresh proposal is carried at the forthcoming meeting, the total paid up will be £2,000,000. A large portion of the working capital is provided by debenture stock (£1,430,388), the average rate of interest on which works out at approximately 44 per cent. As long as a sum approaching one and a-half million pounds is procurable at such a low cost, the company will naturally make full use of it. although it means a specific charge over certain properties and a floating charge over the whole of the assets. A certain amount is furnished by deposits, which show a tendency to grow rapidly, and, with accrued interest, stand at £400,334. It is not stated in the directors’ report if the fresh capital is .11tended to redeem the deposits. The aggregate of capital, debenture stock, and deposits is over three and a-half million pounds, of which approximately one-half claims 15 per cent, and the other somewhere in the neighbourhood of 5 por cent, or -less.

The general liabilities are included in the one group of sundry creditors, which, at £642,292, are virtually the same as a year earlier. Judged by the extent of the annual interest bill,' a considerable portion of this sum is incurring interest. There is a large supply of visible reserves under different headings totalling £1,653,755, from which the bonus recommended of 10 per cent, to the staff falls to be deducted. This company might be said to specialise in the matter of reserves with their varied gradations. The prim ■ reserve of £lOO.OOO is fully invested in gilt-edged securities as per details given on the assets side, while the rest is employed in the business. The total stands very favourably in relation to the paid-up capital, and, as the suggested new share issue is to be made at a 75 per cent, premium, the relative positions should not be much affected by the altered capital. The assets are larger by some £330,000. The increase is mainly to be found among advances, which are up by over £700,000. Financing customers on a greater scale has apparently been the result of better prices obtained for average and good grade wools. To find the necessary funds, deposits belonging to the company have been depleted by over £200,000, while pre. mises account is less by over £loo.ooo—- — difference which presumably has been brought about by realisation of a section. The rise in borrowed deposits accounts for the major part of the balance. The position of advances with regard to the total assets is seen below—viz?

•After providing for bad .tnd doubtful debts. The advances have absorbed a greater proportion of the assets than at any other closing date since 1917. This position is a further example of the general tendency •to borrow at the present time. Depreciation has been duly allowed for in the case of the fixed assets. The allowance of £3790 on plant, machinery, etc'., looks generous, and apparently is intended to cope with the additions made during the period. Premises are reduced by slightly over 1 per cent., while- a sufficient sum to provide for their ultimate extinction is said to have been written off the freehold and leasehold properties. Business premises relatively would appear to have occupied a large place, and their reduction has set free money which is now available for employment in the liquid portion, apd has been utilised accordingly. The accounts are issued in a welldetailed form, and leave nothing to be desired in the W’ay of ordinary information. The large strides made by the company in recent years, and the manner in which the distribution of 15 per cent, has been maintained through all the increases of capital, speaks well for the supervision exercised by its officials.

. CHRISTCHURCH, June 14. The wheat market has advanced in quite a decisive manner since last report. A week ago Tuscan was selling somewhat sluggishly at 5s 6d a bushel on trucks. To-day, 5s 9d per bushel is readily available. _ The main cause of the rise is the firming in the Australian market. There is a pronounced scarcity of short-

berried wheats, there apparently having been a bigger swing-over to Tuscan than usual. Hunters have been selling up to 6s 3d a bushel, on trucks. This variety is much in demand by some millers, and is rated equivalent to Tuscan by others. The slight business in the export of oats to Australia, mentioned some weeks ago, has been revived. All the business in white oats has been done with the south, and a shipment is leaving this week for Sydney. The Canterbury pree is a shade above the Otago value, but the Australian demand has strengthened the market in the south. Values, on trucks, to farmers in Canterbury, are 2s 9d a bushel. Algerians are being shipped from Lyttelton in moderate quantities. A small consignment is leaving this week for Melbourne, the price on trucks being up to 2s 7d a bushel. It is understood that a few barley contracts have been entered into by malting interests for next year’s crop at 5s a bushel. Potatoes have hardened during the week, and £4 a ton, on trucks, is now being paid. June business is on a basis of £5 5s to £5 7s 6d, f.0.b., s.i., and July, August, and September £6 ss. The consignments to the north are now diminishing, but Auckland inquiries are more numerous. A policy of pitting has been fairly general, and the offering by farmers is comparatively meagre. An advance later is not improbable.

Paid-up Gross Net Dvdnd and Mar. 31. Capital. Hescrves . Profit. Profit. Bonus. £ £ £. £ p.c. 1918 702,737 700,630 366,644 184,933 15 1919 773,010 659,018 359,318 160,545 15 1920 773,010 612,146 299,901 100,484 15 1921 916,849 617,426 256,789 61,410 15 1922 916,849 651,296 377,656 174,437 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 1,597,213 846,050 331,326 15 1927 1,750,000 *1,653,755 855,272 329,043 15

•Advances. Total assets. Ratio p.c. 1917-18 £1.824,770 £3,171.213 57.54 1918-19 1,720,044 3,199,848 53.75 1919-20 1,967,430 3,112,516 63.21 1920-21 2,284,606 3,208,803 71.20 1921-22 2,120,126 3,287,799 64.48 1922-23 '... 2,018,667 3,447,816 58.55 1923-24 2,105,676 3,575,757 58.89 1924-25 3,631,158 5,258,779 69.05 1925-26 3,687.113 5,744,338 64.19 1926-27 4,397,223 6,073,267 72.40