East Oregonian : E.O. (Pendleton, OR) 1888-current, 1920-12-22
GO AHEAD BUT BE CAREFUL
HOW YOU STEP IS ADVISED

W. d. Whiteomb. Of Whitfield.
Whitcomb & Co, was the speaker at
the Rotary club luncheon at noon To-
day, giving a highly interesting talk
on business conditions with partio-
alar reference 70 credits Mr Whit
comb was accompanied 20 pendleton
by w, J. Piepenbrinb OF the Portland
office and by Howard S. Bell OF the
Spokane OFFICE
In his talk today Mr.. Whiicomb il
lustratcd his points by the use of nu-
merous charts showing methods or
handling bank statements. etc.
He said in part;
THE days of make believe work
and play business are by Many busi-
nesses are at the fork ia the roads
the one leading 30 banking regularly
the other 10 bankruptcy, Commodity
market is dropping. the cessation of
production plus resumption Of immi-
grafton means an overstocked labor
market, and yet labor defiGntly says
that any reduction in wages below
the abnormal and Illogical rates of
previous years will be fought to Bit
ter end. In the facce OF all Of this,
the government OF necessity must in
sist that the unpaid income tax be
paid on time and in cash. ANY hope
for a real reduction in the tax bur
den Is. in the opinion OF those in
touch with the situation. absolutely
hascIess
! This is not time to become panicky
/ but on the other hand. it is not time
to stick our heads in the sand and
thus think to escape the approaching
storm The question has ceased TO he
general, and has become personal,
| yes. pressingly personal IT seemed
TO me. therefore, that if | could bring
you each today some help in your
own business. it would mean lot
more to you than If / tried to amuse
YOU with stories or spent the time in
pleasant generalities. With this in
view / am going to devote the entire
time to strictly business, and try to
help YOU learn to read your own fl
financial statements and thus to be able
to realize the dangers in your own
business and eliminate them. The
Financial statement before us is some
what general in nature, but at least
some of the points brought out will
be applicable to any kind of business
here represented
First let us make few genera
observations, The ratio of Current
Assets to Current Liabilities is as LII
to / In other words, the Curreu
Assets are only one and seventy-fiv,
hundredths times the Current l.iahil
titles, Your banker will expect rati,
/ of at least two to one as protection
: for his loan and from now on, yol
can expect your banker to give NOR
attention TO this ratio than he ha
during the last few years Most busi
ness in the enthusiasm Of prosperit
= have expanded. Sales being easy
n they have greatly increased their ac
= counts receivable and correspondence
It their accounts payable and their ra
g tios have suffered correspondent
Il Probably YOU will feel that your in
d vestments ought TO be included in tn
= Current Assets, in which case th
ratio would be 1855 to !.
"Whcn YOU find Il necessary 10 IL
clude investments in current assets
order TO secure a desired ratio, yo
are. by so doing weakening yot
statement Some investments al
good. others bad. many mediocr
They range all the way from liberi
bonds down to wildcat mining stoc
For this reason loaners of mon,
look askance at all investments unit
they prove their innocence,
"rhe inventory of merchandise
one Vi the most vital parts of yoI