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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Montgomery Ward & Co.

Collection:: Economics Books

JAS. H. OLIPHANT & CO. paid indirectly on $8,600,000 mortgages of subsidiary warehouse companies. Any reasonable profit margin covers this total eapi- tal levy with ample to spare. Concern of the management, since taking hold in the fiftieth year of this oldest mail order house to deal with the effects of $17,743,000 losses in 1920-21, was primarily to expand sales. The business increased as follows : 1926 1925 1924 1923 1922 .$183,801,000 170,593,000 150,045,000 123,702,000 84.739.000 It was made known in 1926 that effort would be directed rather to improvement of net earnings thenceforth. Five years’ aggregate sales were $712,879,000 and net earnings shown after taxes were $41,163,000 or 5.8% of the gross. After paying dividends, including in 1925 the last of $4,754,000 pre- ferred and class A accumulations, there remained $29,772,000 for development of the company. New plants were opened at Oak- land in 1924, and Baltimore (cost $2,000,000) in 1925, and additions made at Fort Worth in 1924, Kansas City (capacity in- creased 25%) and St. Paul in 1925, and Baltimore (new plant en- larged 40%) and Oakland (cost $550,000) in 1926. Despite the outlay on property, no bank loans were shown at December 31, 1922 to 1926 inclusive, and $24,000,000 was added since 1921 to working capital. Resort to financing was only when in 1926 $5,750,000 5% bonds were sold for subsidiary account. With the treasury replenished from the proceeds and with $1,224,000 sinking fund the $4,250,000 7% preferred stock issue was retired at 115 at the year- end. The finish of rehabilitation work was signified by beginning common dividends at $4 rate in November last. Record of earnings for the common stock is $2.05 a share in 1922, $4.40 in 1923, $6.20 in 1924, $8.05 in 1925, and $6.25 in 1926. These results were after $500,000, equal to 44 cents per common share, appropriations to sinking fund and surplus in years before 1926, and about $245,000, equal to 21 cents per common share, pay- ment of preferred dividends in every year, both of which charges are now eliminated. Thus real earnings of Montgomery Ward were nearly $2.25 a share less in 1926 than in 1925, attributed officially to declining commodity prices, greater proportion of small-profit merchandise sales, and special expenses of opening the Baltimore plant and of increasing catalogue circulation. Unofficially, the automobile tire sales, perhaps $30,000,000 in amount, are believed to have at best contributed nothing to net, although the strain of [562]

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