COMPANY BALANCE SHEET.

Otago Witness, Issue 3862, 20 March 1928, Page 73

COMPANY BALANCE SHEET.

KEMPTHORNE, PROSSER & CO.’S NEW ZEALAND DRUG COMPANY, LTD.

•Including bonus. The net profit of £56.642 is some £5OO down.from that of 1926-27, being the first retrograde movement in the annual profit for six years. At the same time, the gross surplus has touched the record figure of £177,159, in spite of a more generous depreciation allowance, indicating that there is no falling off in the turnover. The rise in charges of nearly £14,000 has, however, more than counteracted the increase in the gross profit. There is nothing to show in the printed statement how the larger charges have been brought about, no amounts being given for the separate items of expenditure. It would seem that a 13 per cent, rise in disbursements calls for some explanation—whether it is due to larger expenditure or to the transfer of item or items to profit and loss account that were formerly charged to trading account. On the capital in circulation at the close of each year the return for 1927-28 works out at 10.69 per cent., as against 11.18 per cent, for its predecessor. The same distribution is made to shareholders as for the previous four years, viz., 8 per cent, dividend and 2 per cent, bonus, the payment on this occasion involving approximately £4300 more than 12 months ago. With the contribution to the staff provident fund larger by £2OOO, there is little of the surplus available for reserve, the carry forward being swelled by £lOO4. Apart from the above addition, reserves stand as before. Their growth during the last 13 years has never stopped, although its rate has varied considerably. The past year has been one of the less fruitful periods, owing to the larger capital employed involving a larger dividend if the former rate is to be maintained. No funds appear on the other side of the balance sheet, as set aside for reserves, which are evidently used in the business. Additions of some £22,000 have been made to the fixed assets during the year. Being grouped, it is impossible to tell what section of the fixtures are affected, but, to judge by the larger allowance for depreciation, it is the more rapidly deteriorating part. The raising of the depreciation provision from £lO,OOO to £17,500 has meant a corresponding reduction in the gross surplus. In ther relation to the total assets, the fixed stand as below, viz.:— Fixed assets. Total assets. Ratio.

The effect of the latest annual addition has been mostly negatived, and the ratio has slightly fallen in consequence. It is interesting to note that in the last eight years the fixed assets have trebled their figure, indicating the expansion that has been in progress. The transfer of a greater proportion of the assets to the fixed section came after the extensions had been entered into pointing to the turnover having outgrown the means of production.

Stock, after providing for depreciation to an extent not stated, stands at £279,704. It now represents a sum exceeding 50 per cent, of the paid-up capital. The tying up of funds of such an amount, if it may be tak.n as an approximately average figure throughout the year, explains in some measure the destination of reserves. Book debts at £105.952 are little altered, and against them i all to be placed as before a special reserve of about 5 per cent. With bills receivable added, there is an aggregate of £129,730. Other open accounts—whatever they represent—■ are down by £ll,OOO, having returned to about the same level as that of two years ago, while cash in bank shows the substan. tial amount of £25,123.

On this occasion the liabilities to outsiders are all contained under one heading, comprising £153,391. The one definite item mentioned is bills payable, but as 12 months ago it only covered £193 it is unlikely to represent a large portion of the group now. There is nothing to show the nature of the component parts, how far they may" consist of actual liabilities or to what extent they may incur the charge of interest.

The issued capital is practically all paid up. It is satisfactory to find that its increase by approximately one-third in tree years has caused no diminution in the rate of distribution and that the gross surplus is mounting in a pronounced fashon. The interests of the company are well spread over the Dominion, and in safeguarding their interests the management can point to a progress that has been consistently maintained even allowing that the nature of the business renders it—less sensitive to prevailing conditions than some others.

Paid-up capital. Reserves. Grt>?s profit. Net profit. Divd. Jan. 31. £ £ £ £ p.e. 1915 265,000 54,961 67,094 23,459 7 1916 265,000 61,141 74,934 24,730 7 1917 265,000 ' 65,517 93,353 25,576 8 1918 273,600 68,725 107,237 29,666 8 1919 299,925 78,329 120,532 33,520 8 1920 334,192 100,103 139,909 39,811 *10 1921 386,560 107,309 157,603 43,551 *10 1922 399,865 108,402 113,442 32,921 8 1923 400,000 109,503 127,553 37,100 •9 1924 400,000 111,881 135,580 42,253 •10 1925 400,000 119,253 117,3.> 7 47,372 *10 1926 448,044 159,703 161,320 54,820 ♦10 1927 511,095 167,538 163,725 57,134 *10 1928 529,639 168,542 177,159 56,642 *10

Year. £ £ p.c. 1914-15 135,692 379,902 35.72 1915-16 151,972 398,900 38.10 1916-17 159,712 435,680 36.66 1917-18 149,528 429,967 34.78 1918-19 141,691 476,422 29.74 1919-20 110,114 568,248 24.64 1920-21 209,750 754,427 671,360 27.80 1921-22 311,831 46.45 1922-23 329,380 692,868 47.54 1923-24 308,870 668.298 46.22 1924-25 305,048 687,053 44.40 1925-26 373,481 770,097 48.50 1926-27 431,198 868,702 49.64 1927-28 435,914 883,716 49.33