COMPANY BALANCE SHEETS.

Otago Witness, Issue 3864, 3 April 1928, Page 29

COMPANY BALANCE SHEETS.

DUNEDIN AND KAIKORAI TRAM COMPANY, LTD.

Paid-up capital, £12,000.

After a succession of years which showed a uniform prosperity, the announcement that the net profit is down to £591, or little more than a fourth of its figure of 12 months ago, must come as something of a shock. Statistics show a fewer number of passengers carried -than for some years past, with the consequent reduction in ' traffic receipts. A comparison of the figures'since 1922 comes out as follows, viz.:—

. Proportionally there is a larger reduction in the down than in the up passengers. but the return per unit continues to diminish. It would be interesting to know if the general result is due to more, energy in walking on the part of the customary passengers or if motor- transit is competing closely. - • Evidently the management is not inclined to regard the present setback as anything else but temporary. The, annual dividend recommended is the same as that of the previous two years, and overdraws the profit by £609. In addition it is. suggested to transfer £5OO from appropriation account to reserve, which involves no change except that one section of reserves benefits at the expense of another. Reserves have been carefully nursed in the past, and are well able to meet the demand that it is proposed to make upon them. Exceeding the paid-up capital by nearly 40 per cent., after allowing for the proposed dividend, they occupy a strong position. They are employed mainly, in the business, but a considerable portion is invested in gilt-edged securities. Their function is now to equalise dividends, a purpose for which they are available. The general expenditure, which is fully detailed, shows little increase from that of 1926-27. It is noticeable that fewer passengers do not mean necessarily a curtailment in expenditure. The tendency is to move upward, although not more so than might be expected. Of the total, something like 60 per cent, consists of wages and salaries, while approximately 23 per cent, is covered by maintenance and repairs,- With these two and fuel excluded, the rest of the disbursements are comparatively light. For the last eight years general expenses stand to traffic receipts , as follows, viz.:—

Provision for depreciation of the wasting assets causes a further £1075 to be taken into account before the total expenditure is arrived at.

Hie liabilities to outsiders ape cut down to £492, comprised under the heading of sundry debtors. When placed against the liquid assets ; they look small. A concern of this nature deals in prompt cash, and hence sundry debtors make a negligible quantity. At the same time, there is neither time nor expense involved in their collection. The cash balances, spread over three banks, and what was in hand, amounted to £305, while investments totalled £4640. The revenue derived from interest amounted to £253. and was of material assistance in augmenting the net surplus for the past year. Stock in hand represents £2474, which is somewhat higlier than usual, and accounts, to some extent for the depleted bank balances. Die fixed,assets, with their respective additions during the' year -and 'their depreciation allowances, are entered with a completeness I that leaves nothing to be ■desired. First among them comes road construction, on which,s pep cent.-wastage has .been. allowed, bringing .it' down to , £12,100. 'As-property in that form occupies so ' large a proportion of the comrpany s assets, it demands careful attention, _ and. although it has received no addition for some time, its 'writing down is a matter of considerable importance. Plant and machinery, at £4623, are slightly up,-the'depreciation provision being outbalanced by the additions, and <the same process.has taken place in buildings, which, have risen to £1493. Rolling stock has received comparatively small additions, and is consequently reduced by some £6O, but possibly it is the asset that claims most foil maintenance and repairs. While, this company can look back upon a prosperous past, last year’s result, coming so. suddenly, leads to. the assumption that, competition in some form or other is making its presence felt, and tire current year’s results will be looked forward 'to with interest in order that it may be 'seen if the former position is to be regained. - r. . ’ ... . .. .-

lIUDDART, PARKERi LTD.

Paid-up copital, 191522, £1,000,001k. 192227, £1,250,000.. Dividend. •Reserves. Net earnings, pref. ord.

, Too net profit of £143,007 recorded for the past financial year is the largest in the h^f Pa Ji. y f h c lS !? ry ’ excet ; din g the previous best—that of the preceding 12 months—by nearly As. unliko last year, there was no special occasion to celebrate, the distribution has been kept within the bounds of the net surplus, the ordinary shareholders receiving 14 per ce nt. after the claims of the preference shareholders have been met. The rate of the normal ordinary uividend is thus gradually drawmg closer to its high-water mark in 1922. h preceded the capitalisation of CT077 00 ?. Of , rcse ”'es. After- a transfer of L 7877 has been made out of the surplus i?ioo oun<J °- ff the , reserv e fund, a balance of L 129 remains to be added to the undivided profits. Net earnings represent - a return of 11 44 per cent, on the capital employed is disclosed m the printed statement to show how the net earnings are brought out. J»ot only are no figures shown for disbursements, either in detail-or total, but deductions before arriving at the surplus are not mentioned by name. From the balance sneet, it is learned that bad and doubtful debts have been provided for but that appears to he the solitary item I ?'' orlna tion regarding the bringing oub ot the profit. In these • circumstances the heading of profit and loss seems superfluous. What is designated as such is the disposal of surpluses, the same information being given in fuller detail in the directors report. ■As in the prior year, a surplus has been realised on the disposal of certain assets. Apparently the assets have been of smaller value, as, with more help from the years profit, the addition to reserve fund is £lO,OOO, as against £60,000 for 1926. Insurance fund has advanced to £285,905 , s P c °ified reserves .increased to £380,213. the aggregate -is £1,065,135,' or practically a growth of £35.009 in the 12 months This total falls, short of the investment group among the assets by some £350,000. indicating the extent to which the company’s funds, apart from the accrued surplus, are being directed for that purpose rather than to the original one of a concern trading by shipping. The liabilities amount to £340,613, divisible between sundry creditors (£279.139) and deposits (£61.474). Each section has grown during the year, and it is noticeable that, concurrently, sundry debtors, and coal stocks, and stores have diminished. As a heading is retained, for certain specified reserves, sundry creditors, which more than outnumber sundry debtors by two to one, may be assumed to consist entirely of actual indebtedness. To what extent they may be incurring interest is not shown, but the .deposits must be claiming an increasing ..sum in that respect. The rate in this case is not likely to be high, as preference is borrowing by that method rather than by applying to the bank. ' o ipj w

. Ihe greater part of the assets is held in liquid form. To what extent is noc stated, as the shares in other companies are included in the fixed group. Moro than half, however, are invested in Government securities, and other debentures and investments at valuation. Allowing an average return of 5 per cent, would mean that approximately half the net earnings come from that source. The assumption is that the investments entered in this group are those least liable to fluctuate. While they have risen by soma £9O,CCO. cash in hand has more than trebled. The fall in stocks and stores, sundry debtors, and, the fixed group is not sufficient to account foy the. difference, ■which must partlv be accounted for by some hidden reserves being brought to light Possibly the surplus on some assets, mentioned ag disposed of. during the year, has been directed to, other reserves than reserve fund ■

The fixed group is* down. by some £45,000. As no mention is made in the directors’, report of. any additions to the fleet, while three steamers and one tug 1 have been sold during the year and one steamer lost by stranding, it might have been expected that the’ reduction -would have been greater.' It. looks as if the book value of the fleet has been well written down. Plant and furniture are unlikely to comprise a large share of the group, which, it may Be assumed, chiefly consists of freehold' and leasehold' properties. The reason of the inclusion of shares in other companies is not clear. Placing the assets and liabilities at the close of the period opposite those at the beginning gives, the. following figures, viz.:— Jan. 1, 1927. Bee. 31, 1927. Steamships, freehold and leasehold. - -properties, plant. furniture, etc-... £1,123,665 £1,078,001 Government and other debentures, Government

The net result shows a growth of soma £12,500, which, while considerably short of hte advance of 1926, cannot be regarded as other Uian satisfactory, especially when it is remenabered that "the claim by the final dividend on this occasion absorbed £22,500 less, ■

Gro.s Net 'Jan. 31 Ilesc-rres. receipts. profit; Divnd £ £ £ p.c. 1921 11,534 11,296 2312 7 1922 ... ... 12,312 11,683 1618 7* 1923 13,123 12,065 1651 7 1924 11,541 12,160 2318 7| 1925 ... ... 15,906 12,793 2333 s’ 1926 16,728 13,323 2432 *10 1927 17,348 13,620. 2041 10 1928 16,576 12,213 591 10 * Including bonus.

Traffic Per Year. Passengers. receipts. unit. 1922.23 ... 1,376,632 £11.803 2.057d ... 1,420,307 12,158 2.055d 1924-25 ... 1,483,9G2 12,736 2.060d 1925 26 . ... 1,539,129 13,242 2.065d 1926-27 ... 1,552,719 13,290 2.054d 1927-28 • ' ... 1,407,922 11,959 2.031d

General Traffic expenses. receipts. Ratio £ p.c. 1920-21 ' ... 8,580 11.183 76.72 1921-23 .. 9,CG6 11,581 83.46 1922-23 ... 9,994 - 11.803 84.51 1923-24 «... ... ' 9,456 12.158 77.78 1924-25 ... 9,88412.736 77.61 1925-26 ... 9,595 13,242 72.46 1926-27 - ... 10,450 13,290 78.63 1927-28 ... 10,547 ' 11,959 88.19

Dec. 31 £ £ p.c. p.C. 1915 ... 142.802 77,455 6 17 1916 ... ... 239,240 89,606 6 10 1917- ... ■ ■ 30SU14 87,747 6 ■ 10 1918 -574,610 98,529 6 ■ 11' 1919 . 809,403 100,717 . - 6 , ; 11 1920 ... ... ' 940,506 112,715.. , . 6 14 1921 r 1,024,966 109,718 6 11 1922- ... 1,159,253 1137388 6 15 1923 ... -** :! 937,399 . 130-.838 6 13: 1924 . ... . .953,282 .. .133,9856— -,124 1925 ...; .... 9.70,016 J123,866_. G. - 12J '1926 ' ' 1,030,185 141,063 . 6 16* 1927 ■ '... 1.065,135" 143,007 6 ' .ft ; .» -J . •Including''Superannuation Fund.' t With bonus. .• ; ■ ■ —

stocks aud other investments 7.. ... 1,320,754 1,410.872 Coal stocks and st >r?s ■ ... 57,002 55,041 Sundry debtors ... ... ... 161,768 134.81(1 Cash ... - u, — .... : ... 14,046 41,517 £2,677,236 £2,733,218 Less liabilities 307,050 340,611 £2,370,156 £2,382,635