ELECTRICAL DEPARTMENT'S PROFITS.

Taranaki Herald, Volume LXVII, Issue 16614, 9 December 1919, Page 5

ELECTRICAL DEPARTMENT'S PROFITS.

TO TUB EDITOR. Sir,—Tho undermentioned aro the figures given in the •‘Working Expenditure Comparison" of the Borough Electricity Department: Working expenses, £SBU4 13s; depreciation ana renewals, .£■1314 17s lid; interest and sinking muds, £3113 10s lUd; nut profit, £s3Of 10s lid; total, £16,334 Os 3d. You aro quoting percentage of profit on capital and oven this as wrong if taken on the usual commercial method of reckoning. No company would expect to pay interest on its capital and also set aside a sinking fund before reckoning its percentage of profit. What I said in my first letter was that tho profits on cost exceeded 100 per cent. Tho actual percentage is 103.078 por cent. 1 said that the not profit shown after allowing for interest on capital and sinking mnd was nearly 65 por cent. Tho actual percontago is 64.866 per cent.; and that tho profit percentage on revenue was 31$ por cent. ; actually it is 31.847 per cent. May I suggest that you ask any public accountant in New Plymouth to answer tho following questions; (1) What percentage of profit on cost of working docs the borough.electrical undertaking show? (2), What percentage of profit is shown after interest on capital and sinking fund is allowed for? (3) What percentage of the total revenue is tho not profit? With regard to your concluding sentence ro recognised principle, surely what has been done is not necessarily right.—l am, etc., W. NASH. [May wo suggest a fourth question; What dividend, would it bo sale to pay if tho department wore a limited liability company?—Ed. T.H.]