UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM N-CSR

                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                        MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number                   811-00505
                                    ------------------------------------------

                            Philadelphia Fund, Inc.
------------------------------------------------------------------------------
              (Exact name of registrant as specified in charter)

          1200 North Federal Highway, Suite 424, Boca Raton, FL 33432
------------------------------------------------------------------------------
          (Address of principal executive offices)          (Zip code)

                         Baxter Financial Corporation
          1200 North Federal Highway, Suite 424, Boca Raton, FL 33432
------------------------------------------------------------------------------
                   (Name and address of agent for service)

Registrant's telephone number, including area code: (561) 395-2155
                                                   ---------------------------

Date of fiscal year end:   November 30, 2006
                         -----------------------------------------------------

Date of reporting period:  December 1, 2005 - November 30, 2006
                         -----------------------------------------------------




<PAGE>

ITEM 1.  REPORTS TO STOCKHOLDERS.

                            PHILADELPHIA FUND, INC.


PRESIDENT'S LETTER - January 9, 2007

Dear shareholders,

Since our last letter on July 5, 2006, the market has worked its way higher,
after first suffering from indigestion during May and June 2006. The markets
have grown more familiar with the new Federal Reserve Chairman, and took
comfort from the Fed's approach. The chairman did not rock the boat and has
kept a steady hand on the tiller.

The whoosh of air from the real estate bubble has had a sobering effect on the
stock market. We expect continued downward pressure on real estate prices in
the "hot markets". The media has speculated that the decline in real estate
prices may ripple through the economy. Studies indicate that homeowners
borrowing against the increased value of their homes direct only 16 percent of
those funds to consumption; therefore, we suspect the risk to the economy may
be overstated.

The economy's hoped for course is a soft landing, with the Federal Reserve
cutting interest rates a notch or two this year. This assumes no "sudden
events" to disrupt the international equilibrium.

With a soft landing, the equity markets should perform well. The market is not
especially high priced and massive money lies tucked in money market funds,
waiting for the right situation.  Moreover, corporations have high levels of
cash available for increasing dividends or buying back stock. A further
positive factor is the large number of buyouts and mergers.

These strong positives lead us to think the markets may provide an environment
for growing profits this year.

During the second half of the fiscal year, we added 20,000 shares of Progress
Energy Inc. to our 50,000 share position. We like Progress Energy because of
its dividend and the population growth in its service area.

We increased our position in Energy East Corp. from 80,000 shares to 120,000
shares. We like the management and are pleased with the dividend.

We invested in 50,000 shares of Procter & Gamble Co., which is in the process
of assimilating Gillette and its many products. We think the merger will
increase profits from the combined products.

We bought 100,000 shares of Bristol-Myers Squibb Co. because the depressed
stock price presented an attractive dividend yield and a product pipeline with
potential.

Telecom issues drew our attention, and we bought 60,000 shares of AT&T Corp.,
which is combining with Bellsouth in pursuit of economies of scale. It owns all
of Cingular, the largest wireless company in the United States, with 58 million
subscribers. The company's dividend is icing on the cake.

In addition to AT&T, we invested in 90,000 shares of Verizon Communications
Inc., which focuses on wireless for growth. Like AT&T, Verizon has an appealing
dividend.

We have 10.8% of our portfolio in short term investments, ready to take
advantage of opportunities we constantly seek.

                                             Very truly yours,

                                             /s/ Donald H. Baxter

                                             Donald H. Baxter
                                             President
<PAGE>

Comparison of the change in value of $10,000 investment in Philadelphia Fund
and the Standard & Poor's 500 Composite Stock Index*

<TABLE>
<CAPTION>
The printed report shows a line graph with the following points.

              PHILADELPHIA   S&P 500
              FUND           INDEX*
<S>           <C>            <C>
11/30/96      $10,000        $10,000
11/30/97      $12,762        $12,851
11/30/98      $14,334        $15,892
11/30/99      $15,188        $19,213
11/30/00      $14,902        $18,402
11/30/01      $14,570        $16,153
11/30/02      $13,351        $13,485
11/30/03      $15,057        $15,521
11/30/04      $18,585        $17,516
11/30/05      $20,366        $18,995
11/30/06      $22,758        $21,699
</TABLE>


Average Annual Total Returns as of 11/30/06

        1 Year   5 Years   10 Years
        ------   -------   --------
        11.74%    9.33%      8.57%


The return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be more or less than their original cost.
Past performance is not predictive of future performance. Returns shown do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of shares. The Fund's annual operating expense
ratio for the fiscal year ended November 30, 2006 was 1.49%.


* The Standard & Poor's 500 Composite Stock Index is a widely recognized
  unmanaged index of common stock prices. Performance figures include the
  change in value of the stocks in the index and reinvestment of
  dividends.

PORTFOLIO SUMMARY BY INDUSTRY - NOVEMBER 30, 2006

                           % of Total                               % of Total
                           Net Assets                               Net Assets
                           ----------                               ----------

Electric Utilities            22.2%    Health Care Plans                4.0%
Banks                         19.3     Personal & Household Products    3.7
Oil & Gas Operations          12.0     Retail Specialty                 3.7
Short-Term Corporate Notes    10.8     Pharmaceuticals                  2.9
Telecommunications             6.0     Publishing                       2.6
Natural Gas Utilities          5.4     Conglomerate                     2.2
Food Processing                4.6     Information Services             0.1
                                                                      -----
                                       Total Investments               99.5
                                       Other Assets, less Liabilities    .5
                                                                      -----
                                                                      100.0%
                                                                      =====

                                        2

<PAGE>
                            PHILADELPHIA FUND, INC.

PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2006
<TABLE>
<CAPTION>
Shares                                                               Value
-------                                                          -------------
<C>      <S>                                                     <C>
                             COMMON STOCKS-88.7%

                                  BANKS-19.3%
 80,000   Bank of America Corp. . . . . . . . . . . . . . . . .  $  4,308,000
 80,000   Fifth Third Bancorp . . . . . . . . . . . . . . . . .     3,154,400
 50,000   National City Corp. . . . . . . . . . . . . . . . . .     1,805,000
 63,792   Regions Financial Corp. . . . . . . . . . . . . . . .     2,337,977
 40,000   Wachovia Corp.  . . . . . . . . . . . . . . . . . . .     2,167,600
 80,000   Wells Fargo & Co. . . . . . . . . . . . . . . . . . .     2,819,200
                                                                 ------------
                                                                   16,592,177
                                                                 ------------
                               CONGLOMERATE-2.2%
 70,000   Hawaiian Electric Industries, Inc.  . . . . . . . . .     1,894,200
                                                                 ------------
                            ELECTRIC UTILITIES-22.2%
 30,000   American Electric Power Co., Inc. . . . . . . . . . .     1,245,300
124,800   Duke Energy Corp. . . . . . . . . . . . . . . . . . .     3,958,656
120,000   Energy East Corporation . . . . . . . . . . . . . . .     2,931,600
 40,000   FirstEnergy Corp. . . . . . . . . . . . . . . . . . .     2,393,600
 70,000   Progress Energy, Inc. . . . . . . . . . . . . . . . .     3,343,900
 80,000   Southern Company  . . . . . . . . . . . . . . . . . .     2,900,000
 40,000   TXU Corp. . . . . . . . . . . . . . . . . . . . . . .     2,295,600
                                                                 ------------
                                                                   19,068,656
                                                                 ------------
                             FOOD PROCESSING-4.6%
 40,000   Corn Products International, Inc. . . . . . . . . . .     1,452,800
 50,000   Kellogg Co. . . . . . . . . . . . . . . . . . . . . .     2,489,000
                                                                 ------------
                                                                    3,941,800
                                                                 ------------
                            HEALTH CARE PLANS-4.0%
 70,000   United Health Group Incorporated  . . . . . . . . . .     3,435,600
                                                                 ------------
                           INFORMATION SERVICES-0.1%
  4,500  *Idearc Inc. . . . . . . . . . . . . . . . . . . . . .       123,930
                                                                 ------------
                          NATURAL GAS UTILITIES-5.4%
 85,000   Sempra Energy . . . . . . . . . . . . . . . . . . . .     4,632,500
                                                                 ------------
                          OIL & GAS OPERATIONS-12.0%
 35,000   ChevronTexaco Corp. . . . . . . . . . . . . . . . . .     2,531,200
 45,000   Marathon Oil Corp.  . . . . . . . . . . . . . . . . .     4,247,100
 70,000   Occidental Petroleum Corp.  . . . . . . . . . . . . .     3,523,800
                                                                 ------------
                                                                   10,302,100
                                                                 ------------


Shares                                                               Value
-------                                                          -------------
                      PERSONAL & HOUSEHOLD PRODUCTS-3.7%
 50,000   Procter & Gamble Company  . . . . . . . . . . . . . .  $  3,139,500
                                                                 ------------
                             PHARMACEUTICALS-2.9%
100,000   Bristol-Myers Squibb Company  . . . . . . . . . . . .     2,483,000
                                                                 ------------
                                PUBLISHING-2.6%
  3,000   Washington Post Co. Class "B" . . . . . . . . . . . .     2,204,700
                                                                 ------------
                             RETAIL SPECIALTY-3.7%
 60,000   Costco Wholesale Corp.  . . . . . . . . . . . . . . .     3,135,600
                                                                 ------------
                            TELECOMMUNICATIONS-6.0%
 60,000   AT&T Corp.  . . . . . . . . . . . . . . . . . . . . .     2,034,600
 90,000   Verizon Communications Inc. . . . . . . . . . . . . .     3,144,600
                                                                 ------------
                                                                    5,179,200
                                                                 ------------

Total Value of Common Stocks (cost $47,695,465)                    76,132,963
                                                                 ------------

Principal
 Amount
---------
                       SHORT-TERM CORPORATE NOTES-10.8%
$1,300M   American Express Credit Corp.,
          5.176%, due 12/04/2006  . . . . . . . . . . . . . . .     1,299,447
 4,000M   General Electric Capital Corp.,
          5.217%, due 12/07/2006  . . . . . . . . . . . . . . .     3,996,573
 4,000M   U.S. Bancorp.,
          5.145%, due 12/07/2006  . . . . . . . . . . . . . . .     4,000,000
                                                                 ------------

Total Value of Short-Term Corporate Notes (Cost $9,296,020) . .     9,296,020
                                                                 ------------

Total Value of Investments (Cost $56,991,485)#  . . . .   99.5%    85,428,983

Other Assets, Less Liabilities  . . . . . . . . . . . .     .5        453,803
                                                         -----   ------------
Net Assets  . . . . . . . . . . . . . . . . . . . . . .  100.0%  $ 85,882,786
                                                         =====   ============
</TABLE>

# Aggregate cost for tax purposes is $56,991,485.
% Represents percentage of net assets.
* Non-income producing security.


                       See notes to financial statements

                                       3

<PAGE>
                            PHILADELPHIA FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES - NOVEMBER 30, 2006

<TABLE>
<S>                                                   <C>        <C>
ASSETS
      Investments in securities, at value
        (identified cost $56,991,485) (Note 1A). . . .           $ 85,428,983
      Cash . . . . . . . . . . . . . . . . . . . . . .                346,526
      Dividends and interest receivable  . . . . . . .                288,358
      Other assets . . . . . . . . . . . . . . . . . .                  5,489
                                                                 ------------
          TOTAL ASSETS . . . . . . . . . . . . . . . .             86,069,356


LIABILITIES
      Payable for capital stock reacquired . . . . . . $85,317
      Accrued advisory, administrative and 12b-1 fees.  82,304
      Other accrued expenses . . . . . . . . . . . . .  18,949
                                                       -------
          TOTAL LIABILITIES  . . . . . . . . . . . . .                186,570
                                                                 ------------


NET ASSETS . . . . . . . . . . . . . . . . . . . . . .           $ 85,882,786
                                                                 ============


NET ASSETS CONSIST OF:
      Capital Paid-In  . . . . . . . . . . . . . . . .           $ 53,737,614
      Undistributed net investment income  . . . . . .                664,307
      Accumulated net realized gain on investments . .              3,043,367
      Net unrealized appreciation in value
         of investments  . . . . . . . . . . . . . . .             28,437,498
                                                                 ------------

NET ASSETS for 10,774,014 shares outstanding . . . . .           $ 85,882,786
                                                                 ============

NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE ($85,882,786 / 10,774,014 shares)  . . . . .                  $7.97
                                                                        =====
</TABLE>
                       See notes to financial statements

                                       4

<PAGE>
                            PHILADELPHIA FUND, INC.

STATEMENT OF OPERATIONS - YEAR ENDED NOVEMBER 30, 2006
<TABLE>
<S>                                             <C>           <C>


INVESTMENT INCOME
      Dividends . . . . . . . . . . . . . . . . $ 1,889,872
      Interest  . . . . . . . . . . . . . . . .   1,063,361
                                                -----------

         Total income . . . . . . . . . . . . .               $  2,953,233


EXPENSES (Notes 3 and 5):
      Investment advisory fee . . . . . . . . .     644,413
      Administrative fee  . . . . . . . . . . .     214,808
      Distribution plan expenses  . . . . . . .     128,885
      Professional fees . . . . . . . . . . . .      70,890
      Director fees and expenses  . . . . . . .      45,001
      Transfer agent and dividend disbursing
        agent's fees and expenses . . . . . . .      38,780
      Fund accounting agent's fees  . . . . . .      37,914
      Custodian fees  . . . . . . . . . . . . .      30,454
      Insurance expense . . . . . . . . . . . .      16,173
      Other expenses  . . . . . . . . . . . . .      52,104
                                                -----------
         Total expenses . . . . . . . . . . . .   1,279,422
         Less: Fees paid indirectly . . . . . .       6,566
                                                -----------
         Net expenses . . . . . . . . . . . . .                  1,272,856
                                                               -----------

         Net Investment Income  . . . . . . . .                  1,680,377


REALIZED AND UNREALIZED GAIN ON INVESTMENTS (Note 4):
   Net realized gain on investments . . . . . .   3,050,085
   Net unrealized appreciation of investments .   4,771,433
                                                -----------
   Net gain on investments  . . . . . . . . . .                  7,821,518
                                                               -----------


NET INCREASE IN NET ASSETS RESULTING FROM
 OPERATIONS . . . . . . . . . . . . . . . . . .                $ 9,501,895
                                                               ===========
</TABLE>
                       See notes to financial statements

                                       5

                            PHILADELPHIA FUND, INC.

STATEMENT OF CHANGES IN NET ASSETS - YEARS ENDED NOVEMBER 30, 2006 AND 2005

<TABLE>
<CAPTION>
                                                       2006            2005
                                                   -------------  -------------
<S>                                                <C>            <C>
INCREASE (DECREASE) IN NET ASSETS:

   OPERATIONS
     Investment income - net . . . . . . . . . . . $  1,680,377   $  1,425,688
     Net realized gain on investments  . . . . . .    3,050,085      8,299,341
     Net unrealized appreciation (depreciation)
      of investments . . . . . . . . . . . . . . .    4,771,433     (1,714,605)
                                                   -------------  -------------
        Net increase in net assets resulting
         from operations . . . . . . . . . . . . .    9,501,895      8,010,424

   DISTRIBUTIONS TO SHAREHOLDERS
     Net investment income ($0.131 and $0.11
      per share, respectively) . . . . . . . . . .   (1,448,610)    (1,203,546)
     Net realized gain on investments ($0.78
      and $0.375 per share, respectively)  . . . .   (8,296,818)    (4,075,346)

   CAPITAL SHARE TRANSACTIONS
     Increase (decrease) in net assets resulting
      from capital share transactions (Note 2) . .      142,727     (1,622,850)
                                                   -------------  -------------
        Net increase (decrease) in net assets  . .     (100,806)     1,108,682

NET ASSETS
   Beginning of year . . . . . . . . . . . . . . .   85,983,592     84,874,910
                                                   -------------  -------------
   End of year (including undistributed net
    investment income of $664,307 and $432,540,
    respectively)  . . . . . . . . . . . . . . . . $ 85,882,786   $ 85,983,592
                                                   =============  =============
</TABLE>

                       See notes to financial statements

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES
    Philadelphia Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as a diversified open-end management investment company.
The Fund's investment objective is to achieve long-term growth of capital and
income. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.

    A. Security Valuation - securities listed on national exchanges are valued
at the closing sales price on November 30, 2006, while securities trading on
the NASDAQ National Market are valued at the NASDAQ Official Closing Price. If
market quotations are not readily available, securities will be valued at their
fair values as determined in accordance with procedures approved by the Board
of Directors. Short-term obligations acquired at par are stated at cost which,
when combined with interest receivable, approximates fair value. Short-term
obligations acquired at a discount are stated at amortized cost which
approximates fair value.

                                       6
<PAGE>


                            PHILADELPHIA FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

    B. Federal Income Taxes - no provision has been made for Federal income
taxes on net income or capital gains, since it is the policy of the Fund to
continue to comply with the special provisions of the Internal Revenue Code
applicable to investment companies and to make sufficient distributions of
income and capital gains to relieve the Fund from all, or substantially all,
such taxes.

    C. Distributions to Shareholders - the Fund distributes its net investment
income quarterly and net realized gains annually. Income and capital gain
distributions which are determined in accordance with income tax regulations
are recorded on the ex-dividend date.

    D. Use of Estimates - the preparation of the financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the reporting
period. Actual amounts could differ from those estimates.

    E. Other - the Fund records security transactions on the trade date.
Dividend income is recognized on the ex-dividend date. Interest income is
recognized on the accrual basis and includes accretion of discounts and
amortization of premiums. Estimated expenses are accrued daily.

    The Fund indemnifies its officers and directors for certain liabilities
that might arise from the performance of their duties to the Fund.
Additionally, in the normal course of business, the Fund enters into contracts
that contain a variety of representations and warranties and which provide
general indemnification. The Fund's maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Fund and/or its affiliates that have not yet occurred. However, based on
experience, the Fund expects the risk of loss to be remote.

2. CAPITAL STOCK
    As of November 30, 2006, 30,000,000 shares of $1.00 par value capital stock
were authorized. Transactions in shares of capital stock were as follows:

<TABLE>
<CAPTION>
                                      2006                      2005
                            ------------------------    ---------------------
                              Shares       Amount        Shares      Amount
                            ----------   -----------    ---------  ----------
<S>                         <C>          <C>            <C>        <C>
Shares sold . . . . . . .      194,840   $1,460,816      169,520  $ 1,341,335
Shares issued in
 reinvestment of
 distributions  . . . . .    1,087,943    7,965,868      576,392    4,378,125
Shares redeemed . . . . .   (1,210,632)  (9,283,957)    (930,748)  (7,342,310)
                            ----------   -----------    ---------  ----------
  Net increase (decrease)       72,151   $  142,727     (184,836) $(1,622,850)
                            ----------   -----------    ---------  ----------
</TABLE>

3. INVESTMENT ADVISORY AND OTHER TRANSACTIONS WITH AFFILIATES
    Baxter Financial Corporation (BFC) is the investment advisor and the
administrator of the Fund. Certain officers and a director of the Fund are also
officers and a director of BFC.

                                      7
<PAGE>
                            PHILADELPHIA FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

    As investment advisor, BFC supervises the Fund's investments on a
continuous basis and provides the Fund with investment advice and
recommendations for an annual fee equal to .75% of the first $200 million of
net assets, .625% of net assets between $200 million and $400 million,
and .50% of net assets in excess of $400 million.

    As the Fund's administrator, BFC is responsible for providing overall
supervision of the Fund's administrative operations and receives an annual fee
of .25% of the average net assets of the Fund.

    Both the investment advisory fee and the administrative fee are payable
monthly, based on month-end net asset values of the Fund.

    During the year ended November 30, 2006, directors of the Fund who are not
affiliated with BFC received directors' fees aggregating $29,950, and the
Fund's custodian provided credits in the amount of $6,566 against custodian
charges based on the uninvested cash balances of the Fund. Thomas J. Flaherty,
a director and former officer of the Fund, receives a monthly pension from the
Fund which amounts to $12,500 annually.

    Keith Edelman serves as the Fund's Chief Compliance Officer (CCO). Mr.
Edelman is also an employee of BFC and a Vice President of the Fund. For the
year ended November 30, 2006, the Fund's CCO salary expense for Mr. Edelman
amounted to $10,327.

4. INVESTMENT TRANSACTIONS
    For the year ended November 30, 2006, purchases and sales of securities
(other than U.S. Government obligations and short-term notes) aggregated
$31,670,830 and $20,849,785, respectively.

    The specific identification method is used to determine tax cost basis when
calculating realized gains and losses.

5. DISTRIBUTION PLAN
    Pursuant to an amended Distribution Plan adopted under rule 12b-1 of the
Investment Company Act of 1940, the Fund may pay a fee in an amount up to .5%
of the Fund's average net assets calculated monthly. A component of the 12b-1
fee (.25% of the Fund's average net assets) is paid to BFC for providing
shareholder services, which include advice and information regarding: share
accounts; applications; use of the prototype retirement plans of the Fund;
assistance with questions regarding the Fund's transfer agent, as well as other
information and services. At its discretion, BFC may make payments to
registered broker-dealers and members of the National Association of Securities
Dealers, Inc. for providing Fund shareholders with similar services.

    The remainder of the 12b-1 fee may be used to pay brokers and dealers which
enter into agreements with BFC or which provide sales, promotional, or
advertising services to the Fund, and to pay for other distribution,
advertising, registration and promotional expenses associated with the sale of
Fund shares.

                                       8

<PAGE>
                            PHILADELPHIA FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

    Until further notice, BFC has agreed to reduce the Fund's 12b-1 fees to
..15% of the Fund's average net assets.

6. DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF NET ASSETS
    The tax character of distributions paid during the years ended November 30,
2006 and 2005 were as follows:

                                                  2006           2005
                                               ----------     ----------
Distributions paid from:
   Ordinary income . . . . . . . . . . . .    $ 1,448,610    $ 1,203,546
   Long-term capital gains . . . . . . . .      8,296,818      4,075,346
                                               ----------     ----------
                                              $ 9,745,428    $ 5,278,892
                                               ==========     ==========

    As of November 30, 2006, the components of net assets on a tax basis were
as follows:




Undistributed income . . . . . . . . . . . . . . . . . . .   $   664,307
Undistributed long-term gain . . . . . . . . . . . . . . .     3,043,367
Gross unrealized appreciation  . . . . . . . . . . . . . .    28,496,940
Gross unrealized depreciation  . . . . . . . . . . . . . .       (59,442)
Capital paid-in  . . . . . . . . . . . . . . . . . . . . .    53,737,614
                                                              ----------
     Total . . . . . . . . . . . . . . . . . . . . . . . .   $85,882,786
                                                              ==========


7. YEAR-END DISTRIBUTION
    Realized gains from security transactions are distributed to shareholders
in December following the end of the Fund's fiscal year. A distribution of
$.347 per share, consisting of $.285 from realized gains and $.062 from
ordinary income, was declared on December 11, 2006. The distribution is payable
on December 27, 2006 to shareholders of record on December 26, 2006.

8. NEW ACCOUNTING PRONOUNCEMENTS
    On July 13, 2006, the Financial Accounting Standards Board ("FASB")
released FASB Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions
should be recognized, measured, presented and disclosed in the financial
statements. This standard defines the threshold for recognizing the benefits of
tax-return positions in the financial statements as "more-likely-than-not" to
be sustained by the applicable tax authority, and requires measurement of a tax
position meeting the more-likely-than-not criterion, based on the largest
benefit that is more than 50 percent likely to be realized. Adoption of FIN 48
is required for fiscal years beginning after December 15, 2006 and is to be
applied to all open tax years as of the effective date. At adoption, companies
must adjust their financial statements to reflect only those tax positions that
are more-likely-than-not to be sustained as of the adoption date. As of
November 30, 2006, the Fund has not completed its evaluation of the impact, if
any, that will result from the adoption of FIN 48.

                                       9
<PAGE>
                            PHILADELPHIA FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

    In September 2006, FASB issued Statement On Financial Accounting Standards
(SFAS) No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157
clarifies the definition of fair value, establishes a framework for measuring
fair value in generally accepted accounting principles and requires additional
disclosures about the use of fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal
years. The changes to current generally accepted accounting principles from the
application of SFAS No. 157 relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of November 30, 2006, the Fund does not believe the adoption
of SFAS No. 157 will impact the amounts reported in the Fund's financial
statements; however, additional disclosures may be required about the inputs
used to develop the measurements and the effect of certain of the measurements
reported on the statement of changes in net assets for a fiscal period.

                             FINANCIAL HIGHLIGHTS
        (For A Share of Capital Stock Outstanding Throughout Each Year)


<TABLE>
<CAPTION>

                                             Year Ended November 30,
                                     ---------------------------------------
SELECTED PER-SHARE DATA               2006    2005    2004    2003    2002
-----------------------              ------  ------  ------  ------  ------

<S>                                  <C>     <C>     <C>     <C>     <C>
Net Asset Value, Beginning of Year.. $ 8.03  $ 7.80  $ 6.51  $ 6.06  $ 6.89
                                     ------  ------  ------  ------  ------

INCOME FROM INVESTMENT OPERATIONS
Net Investment Income...............   0.15    0.13    0.11    0.12    0.08
Net Realized & Unrealized
  Gains (Loss) on Investments.......   0.70    0.59    1.39    0.62   (0.63)
                                     ------  ------  ------  ------  ------
Total From Investment Operations....   0.85    0.72    1.50    0.74   (0.55)
                                     ------  ------  ------  ------  ------
LESS DISTRIBUTIONS FROM:
Net Investment Income...............   0.13    0.11    0.13    0.12    0.07
Net Realized Gains..................   0.78    0.38    0.08    0.17    0.21
                                     ------  ------  ------  ------  ------
Total Distributions.................   0.91    0.49    0.21    0.29    0.28
                                     ------  ------  ------  ------  ------
Net Asset Value, End of Year........   7.97  $ 8.03  $ 7.80  $ 6.51  $ 6.06
                                     ======  ======  ======  ======  ======

TOTAL RETURN (%)....................  11.74    9.59   23.43   12.78   (8.37)
------------

RATIOS/SUPPLEMENTAL DATA
------------------------
Net Assets, End of Year
  (in thousands).....................$85,883 $85,984 $84,875 $74,129 $71,543


Ratio to Average Net Assets:
  Expenses (%).......................   1.49   1.52    1.52    1.54    1.48
  Net Investment Income (%)..........   1.96   1.64    1.56    1.99    1.17


Portfolio Turnover Rate (%)..........     33     26      44      52     140
</TABLE>


                       See notes to financial statements

                                    10



<PAGE>
            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Shareholders and Board of
Directors of Philadelphia Fund, Inc.


We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of Philadelphia Fund, Inc., as of November 30,
2006, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
ended November 30, 2006 and financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of November 30, 2006, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Philadelphia Fund, Inc., at November 30, 2006, the results of its operations,
the changes in its net assets and its financial highlights for each of the
years presented, in conformity with accounting principles generally accepted in
the United States of America.


                                           BRIGGS, BUNTING & DOUGHERTY, LLP


Philadelphia, Pennsylvania
December 15, 2006 (Except for Note 7
as to which the date is December 27, 2006)



                                       11








<PAGE>
                            PHILADELPHIA FUND, INC.

INFORMATION ABOUT YOUR FUND'S EXPENSES - For the six months ended November 30,
2006

As a shareholder of the Fund, you incur ongoing costs, including management
fees and other Fund expenses. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Fund and to compare these
costs with ongoing costs of investing in other mutual funds. The example is
based on an investment of $1,000 made at the beginning of the period and held
for the entire semi-annual period, June 1, 2006 through November 30, 2006.

This table illustrates the Fund's costs in two ways:

ACTUAL FUND RETURN: This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from the
Fund's actual return for the past six month period, the "Expense Ratio" column
shows the period's annualized expense ratio, and the "Expenses Paid During
Period" column shows the dollar amount that would have been paid by an investor
who started with $1,000 in the Fund at the beginning of the period. You may use
the information here, together with your account value, to estimate the
expenses that you paid over the period. To do so, simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number given for the Fund in the first line
under the heading entitled "Expenses Paid During Period."

HYPOTHETICAL 5% RETURN: This section is intended to help you compare the Fund's
costs with those of other mutual funds. It assumes that the Fund had an annual
return of 5% before expenses, but that the expense ratio is unchanged. In this
case, because the return used is not the Fund's actual return, the results do
not apply to your investment. This example is useful in making comparisons to
other mutual funds because the Securities and Exchange Commission requires all
mutual funds to provide examples of expenses calculated and based on an assumed
5% annual return. You can assess the Fund's costs by comparing this
hypothetical example with the hypothetical examples that appear in shareholder
reports of other funds.

Please note that the expenses shown in the table are meant to highlight and
help you compare your ongoing costs only and do not reflect any transactional
costs such as sales charges (loads), redemption fees, or exchange fees. The
Philadelphia Fund does not charge any sales loads, redemption fees, or exchange
fees, but these fees may be present in other funds to which you compare the
Fund. Therefore, the hypothetical portions of the table are useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.

                            BEGINNING       ENDING
                          ACCOUNT VALUE  ACCOUNT VALUE  EXPENSE  EXPENSES PAID
                            06/01/06       11/30/06      RATIO   DURING PERIOD#
                          -------------  -------------  -------  --------------

Actual Fund Return*  . .     $1,000        $1,075.40     1.49%       $7.75

Hypothetical 5% Return .     $1,000        $1,017.60     1.49%       $7.54

* The actual total return for the six-month period ended November 30, 2006 was
  7.54%. The actual total return figure assumes the reinvestment of all
  dividends and capital gain distributions, if any.
# Expenses are equal to the Fund's annualized expense ratio multiplied by the
  average account value over the period, multiplied by the number of days in
  the most recent fiscal half-year, then divided by 365.

                                      12

<PAGE>
                               PHILADELPHIA FUND, INC

OFFICERS AND DIRECTORS

The names, ages, length of service, principal business occupations for at least
the past five years and other directorships of the officers and Directors of
the Fund are listed below. In most cases, more than five years of business
experience is included in order to present shareholders with a better awareness
of the Directors' experience. All officers and Directors hold identical
positions with Eagle Growth Shares Inc., a registered investment company also
advised by Baxter Financial Corporation, and with the Fund. The Directors do
not serve a specified term of office. Each Director will hold office until the
termination of the Fund or his resignation, retirement, incapacity, removal or
earlier death. The address of each Director and officer is 1200 North Federal
Highway, Suite 424, Boca Raton, FL 33432. Additional information about the
Board is available in the Fund's Statement of Additional Information which can
be obtained free of charge by calling (800) 749-9933.


INDEPENDENT DIRECTORS

Thomas J. Flaherty,        Director (Since 1989)                    Age: (82)
                           Audit Committee Member (Since 2001)

Retired. Formerly, Executive Vice President, Philadelphia Fund, Inc.; formerly,
President, Eagle Growth Shares, Inc.; formerly, President and Director,
Universal Programs, Inc. and Eagle Advisory Corporation (investment advisors);
formerly, Partner, Fahnestock & Co., Inc.


Kenneth W. McArthur,       Director (Since 1987)                    Age: (71)
                           Audit Committee Chairman (Since 2001)

Chairman, Shurway Capital Corp. (private investment company); Trustee, BMO
Mutual Funds (Canadian registered investment company); Trustee & Investment
Committee Member, Canada Post Pension Fund; Lead Director, Oppenheimer
Holdings, Inc. (financial services holding company); formerly, Vice President
and Director, Nesbitt Investment Management; formerly, President, Chief
Executive Officer, and Director, Fahnestock & Co., Inc. (securities brokerage);
formerly, Senior Vice President and Chief Financial Officer, Nesbitt Thomson
Inc. (holding company).


Robert L. Meyer,           Director (Since 1989)                    Age: (66)
                           Audit Committee Member (Since 2001)

President, Ehrlich Meyer Associates, Inc. (investment management); Consultant,
The Roosevelt Investment Group, Inc. (investment management); Chartered
Financial Analyst; formerly, Principal Officer, Convergent Capital Corporation
(holding company); formerly, Director, Vice President, and Senior Vice
President, Fahnestock & Co., Inc.



Donald P. Parson,          Director (Since 1987)                    Age: (65)
                           Audit Committee Member (Since 2001)

Counsel, Satterlee Stephens Burke & Burke LLP; Vice Chairman and Director, Home
Diagnostics, Inc. (publicly registered medical device company); formerly,
Chairman of the Board, Syracuse University College of Law.

                                      13
<PAGE>
                            PHILADELPHIA FUND, INC.

OFFICERS AND DIRECTORS (Continued)

INTERESTED PERSONS

Donald H. Baxter,          Director and President (Since 1989)      Age: (63)

Director, President, and Treasurer, Baxter Financial Corporation; Director and
President, Universal Programs International Limited (distributor); formerly,
Director, Sunol Molecular Corp. (biotechnology); formerly, Director, Great
Eastern Bank; formerly, Director, Frost Hanna Capital Group (publicly
registered acquisition company); formerly, Managing Member, Crown Capital Asia
Limited Liability Company (private investment company); formerly, Managing
Member, Baxter Biotech Ventures Limited Company (private investment company);
formerly, Portfolio Manager, Nesbitt Thomson Asset Management Inc.


Ronald F. Rohe,            Vice President, Secretary,               Age: (63)
                           and Treasurer (Since 1990)

Chief Operating Officer and Marketing Director, Baxter Financial Corporation;
Secretary, Universal Programs International Limited (distributor); formerly,
registered representative, Paine Webber Incorporated.


Keith A. Edelman,          Vice President                           Age (41)
                           and Chief Compliance Officer (Since 2004)

Director of Operations and Director of Computer Operations, Baxter Financial
Corporation; Director of Operations, Philadelphia Fund, Inc.; Director of
Operations, Eagle Growth Shares, Inc.


Diane M. Sarro,            Vice President (Since 2005)              Age (42)

Director of Shareholder Services, Baxter Financial Corporation, Philadelphia
Fund, Inc. and Eagle Growth Shares, Inc.

                                       14

<PAGE>
                            PHILADELPHIA FUND, INC.

OFFICERS

DONALD H. BAXTER, Chairman and President
RONALD F. ROHE, Vice President/Secretary/Treasurer
KEITH A. EDELMAN, Vice President/Chief Compliance Officer
DIANE M. SARRO, Vice President/Director of Shareholder Services


DIRECTORS

DONALD H. BAXTER
THOMAS J. FLAHERTY
KENNETH W. McARTHUR
ROBERT L. MEYER
DONALD P. PARSON


PHILADELPHIA FUND, INC.
1200 North Federal Highway, Suite 424, Boca Raton, FL 33432 (561) 395-2155


INVESTMENT ADVISOR, ADMINISTRATOR AND UNDERWRITER
BAXTER FINANCIAL CORP., member N.A.S.D.
1200 North Federal Highway, Suite 424, Boca Raton, FL 33432


CUSTODIAN
U.S. BANK, N.A., 425 Walnut Street, Cincinnati, OH 45202


TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
UNIFIED FUND SERVICES, INC. P.O. Box 6110, Indianapolis, IN 46206-6110

LEGAL COUNSEL
STRADLEY, RONON, STEVENS & YOUNG, LLP, Philadelphia, PA


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BRIGGS, BUNTING & DOUGHERTY, LLP, Philadelphia, PA

                                       15












<PAGE>


        Philadelphia Fund, Inc.                       PHILADELPHIA
        1200 North Federal Highway                     FUND, INC.
[LOGO]  Suite 424
        Boca Raton, FL 33432                             ANNUAL
        (561) 395-2155                                   REPORT

                                                    November 30, 2006


The Fund files its complete schedule
of portfolio holdings with the
Securities and Exchange Commission
(SEC) for the first and third
quarters of each fiscal year on Form
N-Q. The Fund's Forms N-Q are available
on the SEC's website at
http://www.sec.gov, by calling the
Fund at 1-800-749-9933, and may be
reviewed and copied at the SEC's
Public Reference Room. Information on
the operation of the SEC's Public
Reference Room may be obtained by
calling 1-800-SEC-0300.


The Fund's proxy voting policies and
procedures and how the Fund voted
proxies relating to portfolio
securities during the most
recent 12-month period ended
June 30, 2006 are available without
charge (i) upon request, by calling
1-800-749-9933; (ii) by writing to the
Fund at the above address; and (iii) on
the SEC's website at www.sec.gov.


                                                     Established 1923
You will find important information
about PHILADELPHIA FUND - its
investment policy and management, past
record and the method of calculating
the per-share net asset value - in the
current prospectus. This report is
submitted for the general information
of the Fund's shareholders. It is not
authorized for distribution to
prospective investors unless preceded
or accompanied by an effective prospectus.



<PAGE>

ITEM 2.  CODE OF ETHICS.

         The registrant has adopted a code of ethics that applies to its
         principal executive officer and principal financial officer. During
         the period covered by the report, no amendments were made to the
         provisions of this code of ethics.  During the period covered by the
         report,  the registrant did not grant any waivers, including implicit
         waivers, from the provisions of this code of ethics.  The registrant
         has filed this code of ethics as an exhibit pursuant to Item 12(a)(1)
         of this Form N-CSR.

         The registrant's Code Of Business Ethics for Principal Executive
         and Financial Officers is available, without charge, upon request,
         by writing to the above address, or by calling 1-800-749-9933.


ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT.

         The registrant's Board of Directors has determined that Mr. Kenneth W.
         McArthur meets the definition of "audit committee financial expert" as
         such term is defined in the instructions to Item 3(a) of Form N-CSR.
         In addition, Mr. McArthur is an "independent" member of the Audit
         Committee, as defined in the Item 3(a)(2) of Form N-CSR.  Mr. McArthur
         also serves as the Audit Committee Chairman.


ITEM 4.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

         (a) Audit Fees. The aggregate fees billed in each of the last two
             fiscal years for professional services rendered by the principal
             accountant for the audit of the registrant's annual financial
             statements or services that are normally provided by the
             accountant in connection with statutory and regulatory filings
             or engagements for those fiscal years are as follows.


             For the fiscal year ended 11/30/06:  $37,600
             For the fiscal year ended 11/30/05:  $36,050


         (b) Audit-Related Fees. No fees were billed in each of the last two
             fiscal years for assurance and related services by the principal
             accountant that are reasonably related to the performance of the
             audit of the registrant's financial statements and are not
             reported under paragraph (a) of this item.

         (c) Tax Fees. The aggregate fees billed in each of the last two
             fiscal years for professional services rendered by the principal
             accountant for tax compliance, tax advice and tax planning are as
             follows. The preparation of Federal and state income tax returns
             and Federal excise tax returns comprised the fees disclosed under
             this category.

             For the fiscal year ended 11/30/06:  $1,400
             For the fiscal year ended 11/30/05:  $1,400


         (d) All Other Fees. No fees were billed in each of the last two
             fiscal years for products and services provided by the principal
             accountant, other than the services reported in paragraphs (a)
             through (c) of this item.

         (e)(1) The Audit Committee Charter of the Board  requires that the
                Audit Committee (a) pre-approve, and to recommend to the Board,
                the selection, retention or termination of the independent
                auditors to provide audit, review or attest services to the
                Fund, and, in connection therewith, to evaluate the
                independence of the auditors, and, in connection therewith, to
                receive the auditors' specific representations as to their
                independence; (b) pre-approve all non-audit services to be
                provided to the Fund by the independent auditors when, without
                such pre-approval, the auditors would not be independent of the
                Fund under applicable federal securities laws, rules or
                auditing standards; (c) approve all non-audit services to be
                provided by the Fund's independent auditors to the Fund's
                investment adviser or to any entity that controls, is
                controlled by or is under common control with the Fund's
                investment adviser and that provides ongoing services to the
                Fund, when, without such pre-approval by the Committee, the
                auditors would not be independent of the Fund under applicable
                federal securities laws, rules or auditing standards; and (d)
                establish, if deemed necessary or appropriate as an alternative
                to Audit Committee pre-approval of services to be provided by
                the independent auditors as required by paragraphs (b) and (c)
                above, policies and procedures to permit such services to be
                pre-approved by other means, such as by action of a designated
                member or members of the Audit Committee, subject to subsequent
                Audit Committee review or oversight.

         (e)(2) None of the services described in each of paragraphs (b)
                through (d) of this Item were approved by the Audit Committee
                pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation
                S-X.

         (f) Not applicable.

         (g) There were no non-audit fees billed by the registrant's
             accountant for services rendered to the registrant other than
             those described above. No non-audit fees were billed by the
             registrant's accountant for services rendered to the registrant's
             investment adviser or any entity controlling, controlled by, or
             under common control with the adviser that provides ongoing
             services to the registrant for each of the last two fiscal years
             of the registrant.

         (h) Not applicable.


ITEM 5.  AUDIT COMMITTEE OF LISTED REGISTRANTS.

         Not applicable to registrant, which is an open-end management
         investment company.


ITEM 6.  SCHEDULE OF INVESTMENTS.

         Not applicable; full Schedule of Investments filed under Item 1 of
         this report.


ITEM 7.  DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
         MANAGEMENT INVESTMENT COMPANIES.

         Not applicable to registrant, which is an open-end management
         investment company.


ITEM 8.  PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

         Not applicable to registrant, which is an open-end management
         investment company.


ITEM 9.  PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
         COMPANY AND AFFILIATED PURCHASERS.

         Not applicable to registrant, which is an open-end management
         investment company.


ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.


         There were no changes to the procedures by which shareholders may
         recommend nominees to the registrant's board of directors during
         the reporting period.


ITEM 11. CONTROLS AND PROCEDURES.

        (a) The registrant's principal executive officer and principal
            financial officer have evaluated the registrant's disclosure
            controls and procedures (the "Procedures") within 90 days of the
            filing of this report, and have concluded that the Procedures are
            effective in providing reasonable assurances that the information
            required to be disclosed by the registrant in its reports or
            statements filed under the Securities Exchange Act of 1934 is
            recorded, processed, summarized and reported within the time
            periods specified in the rules and forms of the Securities and
            Exchange Commission.

        (b) There were no changes in the registrant's internal control over
            financial reporting (as defined in Rule 30a-3(d) under the
            Investment Company Act of 1940, as amended) that occurred during
            the registrant's second fiscal quarter of the period covered by
            this report that have materially affected, or are reasonably
            likely to materially affect, the registrant's internal control
            over financial reporting.


ITEM 12. EXHIBITS.

        (a)(1) The registrant's Code Of Business Ethics for Principal Executive
               and Financial Officers required by Item 2(a) is attached as an
               exhibit hereto.

           (2) The certifications required by Rule 30a-2(a) under the
               Investment Company Act of 1940, as amended, and Sections 302
               and 906 of the Sarbanes-Oxley Act of 2002 are attached as
               exhibits hereto.


<PAGE>

                                  SIGNATURES


 Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

(Registrant) Philadelphia Fund, Inc.
 --------------------------------------------------------------------

By (Signature and Title)* /s/ Donald H Baxter
 -------------------------------------------------------
  Donald H. Baxter, Chief Executive Officer

Date  January 26, 2007
 ---------------------

 Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

By (Signature and Title)* /s/ Donald H. Baxter
 -------------------------------------------------------
  Donald H. Baxter, Chief Executive Officer

Date  January 26, 2007
 ---------------------

By (Signature and Title)* /s/ Ronald F. Rohe
 -------------------------------------------------------
  Ronald F. Rohe, Chief Financial Officer

Date  January 26, 2007
 ---------------------

* Print the name and title of each signing officer under his or her signature.