The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1913-04-07
'RUMELY co. REPORT
HELPED ITS STOCK
Advances Six Points When
Net Profits Were Figured
at ST ,824,5OO
palladium Specially

NEW YORK, April THE long
awaited report of the NJ. Rumely Co,
manufacturers Of farm implement ma
chinery, for the year 1912, that has
been looked for with great interest by
the stock market for an explanation OF
the sensational break in the common
stock from 92A in January to 37A on
Wednesday, has just been made pub
lie.
On it's publication the common stock
jumped points from 381a to 4413, on
the strength of the earnings reported,
which were larger than expected.
The income account of the report
set down net profits as $1,824, 800. This
profit was Immediately figured in the
financial district as equal to 80 per
cent earned on the common stock af-
ter allowing for deduction of $700,614
for the per cent. preferred dividend
Examination of the balance sheet
and the income account, however,
showed that the actual earnings for
the year applicable to the common
stock, not figuring in the cost Of ANAL
gamation of the companies, are $731,-
p OFT, or 81 per cent. on the amount OF
the stock, which is per cent issue.
The total surplus of the company at
the end of the year is only $590.S3O,
although the payment of the common
stock dividend of per cent. would
require $654,49O.
The report therefore after careful
analysis made it apparent why the
company stock dividend may be pass
ed, as James A. Patten, director was
quoted recently as announcing that it
would.
The report sets down the combined
income account of the M. Rumely COM
pany, the Rumely Products company
and the Northwest Thresher company
as showing a net profit of 81 1924, 800,
and in a note at the bottom of the
page states that $342,S09 of this re-
presents earnings of the Northwest
Thresher company for ten months be-
fore ii was taken into the NJ. Rumely
company. The balance sheet shows
that the Rumely company's actual net
profit was 81 ,4S1 ,691. Various charges
against the company's surplus at the
beginning of 1912 and against the net
profit reduced the total surplus at the
end of 1912 to $500,S30 from S790,769
at the end of 1911, an amount insult
ficient to pay the common dividend.
These charges include 1851 ,015 charges
deferred from the 1911 account, exper-
mental expense of $4,000 from 1911,
estimated cost of taking over old COM
panies of $58O,000 and preferred divi-
dends of S700,614
The gross sales of the combined
companies were $17,527 ADJ. A. j.
Rumely, president, says:
Gross sales for the year 1912 We're
$17.597, 431.26, showing a large in
crease over all previous years. When
reduced to a net basis by deducting
discount they were 415 per cent
greater than the aggregate Of the
sales of the previous year of the M
Rumely company, and the other COM
panies whose assets and business it
acquired
1.-The past Eve years have been a
period of continuous growth, during
which our company has established
its position in the implement trade.
It's volume of sales. increased from
1912 (this latter figure including the
volume acquired by the purchase of
the business of the Advance and
Gaar-Scott plants, amounting in 1911
to $5,344,661). This twenty-fold in
crease was accompanied by fifteen
fold increase in its capital and sur
plus from $1,359,307.63 to s21, 499, $780,
so.