CO129-423 - Governor Sir May - 1915 [7-8] — Page 19

Jondlovure 1.

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Hon. Attorney General,

The following is an abstract of the Prérét dia|

Losa accounts of Jebsen & Co's piece goods department for the

years 1910 to 1914:-

Year

1910

Turnover

$1,110,000

Gross Profit Expenses

Net Profit

$102,000

$60,000

$42,000

1911

560,000

40,000

40,067 10ss 67

1912

600,000

65,000

34,000

12,000

46,000

17,000

1913

860,000

93,000

$2,000

41,000

1914

929,000

(93,000)

(53,000)

(40,000)

The net profi te for any one year do not neces-

sarily represent the exact position as stocks are frequently

held over the year and their invoice value insorted in the

account, any less occurring when the goods are sold appearing

in the account of the year in which the goods are sold. The

above abstract however sufficiently accurately shows the

average profits and losses for a period of years.

It will be seen that the percentage of gross

profits to turnover in 1910, 1912, 1913, 1914 is roughly 10%; expenses vary between 5% and 7% of the turnover and net profits

vary accordingly between 5% and 3%. The loss in the year 1911

is clearly largely accounted for by the considerably reduced

turnover and the resulting high proportion (7%) of expenses to

turnover, expenses being in the case of salaries, office-rent,

etc. constant. The gross profits in this year work out at 7% as compared with the normal 10% of the turnover. This however

does not bear the interpretation that goods were sold deliber-

ately at or below cost. The books clearly do not disclose any

evidence of this but they do disclose a number of forced sales

at cost price due to failures of local buyers. I understand

that the year 1911 was an exceptionally bad one for trade. The arrival of a new manager of the piece goods department in this year may also have affected profits. It will be seen that the

year