Studies in securities

Bibliographic data

Monograph

Identifikator:: 1757542078

URN:: urn:nbn:de:zbw-retromon-134903

Document type:: Monograph

Title:: Studies in securities

Edition:: Revised

Place of publication:: New York

Publisher:: Jas. J. Oliphant & Co.

Year of publication:: 1927

Scope:: 81 S.

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Air Reduction Co.

Collection:: Economics Books

STUDIES IN SECURITIES A ESP Air Reduction Co. pe LS ae = Eo h S57 The Air Reduction Co. now making its record for the second decade of its corporate life seems established on an annual earning power basis of well over $20 a share available for dividends and depreciation. Record in the ten years ended 1925, of $94 a share aggregate net of which $41 a share was charged off for deprecia- tion of plants and amortization of patents, $30 paid in dividends, and $23 surplus kept in the property, laid a splendid foundation. In 1926, the first year of its second decade, Air Reduction Co. earned $20 a share after expenses and taxes, of which $9 was charged off for reserves, indicating as yet no let-down in the management’s obviously liberal depreciation policy. It is known depreciation on property is charged off at annual rates ranging from 2% to 25% and amortization of patents in sums computed to entirely provide for them by expiration. Thus as of December 31, 1926 plants were carried net at $6,544,000 after reserves of $6,889,000, and patents at $588,000 after reserves of $1,988,000. Clearly the reported earnings for stockholders have been soundly arrived at after such liberal charge-offs, even admitting the tech- nical nature of the company’s business. An eminent chemist and corporate executive once said: ‘‘You must remember that a hoary bearded professor in his laboratory with a test tube in hand may wipe out a million plant investment;’’ and Air Reduction man- agement have apparently the same idea. The depreciation policy has been an outstanding feature of this company. With plants in over 30 cities and distributing its products from 150 warehouses throughout the country, Air Reduction manu- factures and sells oxygen, acetylene, nitrogen and other gases, carbide, and oxy-acetylene cutting and welding equipment used principally by steel manufacturers, foundries, railroads, shipyards, automobile makers and repair shops. Additions and acquisitions (made largely from earnings) have resulted in a well-integrated, rounded-out, operating industrial. ‘With air one of its principal raw materials and its manufacturing process largely automatic, ratio of operating expenses to gross, at 63% in 1926, is relatively low. Gross business has expanded to $12,735,000 in 1926 from $1,173,000 in 1916. Capitalization has been simplified by conversion in past years of bonds and preferred stock into one issue, now outstanding in amount of 211,655 shares of no par capital stock. As of December 31 last, current liabilities were $1,334,000 and current assets $7,520,000 (of which $2,803,000 was cash). Ex- cluding patents, Air Reduction stock has a sound asset value of $80 a share with fixed assets carried at ultra-conservative figures. 91

Access restriction

Copyright

fullscreen: Studies in securities

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation