New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-05-20
Westinghouse Go.
Earnings Decline
1920 Report Shows
Slump in Business at End of
Year Left Heavy Inven-
tories, but Obviated Ne
cessity of New Financing

! Tho high peak of the business Of the
Westinghouse Electric g. Manufacture
! ing Company came in August, 1920.
The company's fiscal year ended March
81, 1921. Business continued at high
volume until December, 1920, and then
dropped of with great suddenness. II
had been running st the rate Of nearly
! $200,000,o00 year gross sales, and
dropped to between eight and nine
million a month. The result was that
the balance sheet as of March 81, 1921,
showed $8O,724,000 inventories carried
at cost market value. AT the be-
ginning Of the year inventories were
carried at $63,018,000. There were
about s65,621 900 orders on hand,
March 81, 1921.
In normal times the company can
operate economically with inventories
Of about third to half OF the years
business, The reason for the much
this fiscal year lies in the general
business situation of last August, when
it was necessary to order raw materials
simultaneously with the placing OF an
order for finished materials by
customers.
The company has, as shown by its
balance sheet, $20,775,Oo0 notes pay
able, and $6,652,000 accounts payable.
During the past year it has sold $780,
100000 per cent bonds due 1881. Cash
on hand at the end Of the year
amounted to 81 1911, 900. If sales had
continued at the heavy rate Of 1920,
it might have been necessary to have
increased the working capital Of the
company, and at first glance the bal
ance sheet suggests the possibility Of
the necessity for further financing.
AS matter OF fact, however, the
company has been able to deliver at
the rate of from ten to twelve mil
lion dollars worth q month since
December, 1920, and has been able to
cut down It's buying OF raw material
to minimum, SO that bank loans are,
it is understood, being paid off COM
paratively rapidly.
Possibility Of Revival
II there should be no revival OF bust
ness activity for six months it is I'M
likely that the Westinghouse Company
would have to do any funding Of its
bank loans as shown on the March 81
balance sheet. AS of that date the
company had $7,69S,00 notes recelv-
able and $34,552,0oO accounts re-
ceivable. 1t ought to be possible to
cut these figures down to approx
mately the figures for the end of the
1920 fiscal year. At that time notes
receivable amounted to $2,532, 900 and
accounts receivable to $28,381 900.
The Westinghouse does both do
nestle and foreign business. 1t
manufactures standardized articles for
lamps and electric heating devices,
etc, and also does large business in
manufacturing expensive units, such
as electric locomotives and the cleo
trical equipment for battle ships. In
December, 1920, there was a cessation
for the time being Of orders for the
small articles for domestic use, but
the company was able to continue
work on its large orders. Gradually,
as retail dealers stocks were reduced,
the orders for standardized articles
began to come in again, and at pres
cnt the company is running at low
volume Of business compared with the
last five years but at volume which
yields satisfactory profit.
The company's foreign business is
smaller than is generally supposed
probably less than sixth of the total
orders on hand are for foreign bust
ness. On the other hand, the manu-
featuring plant could, it is believed,
turn out business IN competition with
either Belgium or Germany for South
American trade at a satisfactory profit
and at prices that would permit of
successful competition.
Gross Sales Increase
In the fiscal year ended March 81,
1921, gross sales billed amounted to
s150,980,000. This compares with $780,
053,000 for the previous year. Net
manufacturing profit in 1921 was $12,-
100000, and in the previous year $15,-
100000. Interest charges, etc, in 1921
were $685. 900, and in 1920 were ST.
$4,000. This left $12,618,0o0 available
for dividends in 1921, and $15,206,00O
in 1920. This is equal to II per cent
on the common stock in 1921 and 81
per cent in 1920. The company paid
it's regular per cent dividends on the
common, calling for $5,665,000.
The Westinghouse Electric and Manu-
featuring Company has $74,S12,00O
stock, Of which $7O,814,OO0 is common.
During the last year it issued $S0,o0O,OOo
7 per cent bonds, and the cost Of this
financing was $2,8O3,000. The total
funded debt, including these bonds, is
$36, 900.
Assets of Company
AS Of March 81, 1920, the total assets Of
the company and its proprietary COM
panies in the United States were $780,
73A.000. At the end of March, 1921,
total asSats were carried at S0O6 26k