New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-04-06
General Motors
Expenses Jump
81 8, 100000
Company Earned $I.56 a
$40 Share of Common
Stock in 1920, Report
Shows
Writes Down Inventories
Construction Program Will
Be Completed in 1921 by
the Expenditure of SlO,-
100000

ne net safes OF tne 1eneral MOTORS
Corporation in 1920 were $567 800 ,602,
an increase of S57,643,909 over the
sales Of the preceding year. according
to the annual report just made public.
This was far more than offset by the
increase in expenditures. Regular ex
penses increased S6S,161, 301 and extra
ordinary expenses and depreciation
about $4,000, 600, total of about
s7s,46o,o 900, leaving sS2,762,o63 net
earnings in 1920, against $l03 ,667 ,700in
1919. Provision for bonuses and pen
sions was about the same in the two
years, but in 1920 S18,502 ,1SS was
written off in inventory account from
the 1920 income in addition to the re-
serves previously set up to cover
shrinkage in inventory values. After
deductions for this and cognate items.
$49, 277.522 remained in 1920, com
pared with $90517,519 in 1919. Last
year only 1884 900 was set aside for
Federal taxes, compared with $30,000,-
600 set aside in 1919, but in 1920 a
special reserve for Unforeseen con-
tingencies" Of S75OO,00O was set aside.
After all deductions $37,750,375 was
left in 1920 available for all classes
of dividends and s60005, ASA in 1919.
General Motors now has outstand
ing 25,153,500 per cent debenture
stock, $50 100000 per cent debenture
stock and S16,1S3 400 per cent pre-
ferred stock. The per cent debenture
stock was issued last year and the
6 per cent debenture was reduced by
about $4,000 900. After the payment
Of dividends on the debenture and pre-
ferred stocks there was $32, l29, 949
earned on the common stock in 1920
and sos, 792,972 in 1919. During 1920
the company issued 1929 ,901 shares
of new common stock, with no par
value but carried on the books at $40
per share, IN exchange for about 1532,-
600 shares of 500 par value and as
was 1,534,110 shares of common stock
of 500 par value outstanding. The
amount earned on the common stock in
1920 was the equivalent of $1.56
share, or on a basis of $40 par value
shares, 1916 per cent. In 1919 the per
centage on the then outstanding com
mon stock was 1914 This includes new
stock held in the treasury for the con-
version of fractional old stock.
The slump in the motor car industry
began in early September. Inventories
reached their greatest quantity in Oc
tober. but during the last ten weeks
of the year the company made a net
reduction "a inventories of S25, 100000
and a further reduction Of s25,776,000
by charging off all obsolete material
and adjusting inventory values to cost
or market, whichever was the lower.
Inventories at the end of 1920 were
carried at S164684,679. This compares
with $126,696,652 in 1919. Reserves
for Federal taxes and extraordinary
expenses were carried as q liability at
the end Of 1919 at $36 ,262, 472, and were
reduced to $4,942.11 at the end of
1920. The new special reserve of ST.
500,0 900 already has been mentioned
Genera Motors went through the
period of the latter part of
1920 without depicting its cash, but not
without some new financing Cash on
hand at the end of 1920 was SAL sos $50,
or only 100000 less than at the end of
1919 Notes receivable increased from
81 IT'S, 104 at the end of 1919. to S13,-
449,377 at the end of 1920. Notes pay
able increased from S6,S12,319 to ST.
421 ,451, although there was a reduction
of about S7,600,000 on accounts payable.
this account being S30,140.276 in 1920.
this up, current assets. of
which inventories form about half. were
more than two times the current liabili-
ties at the end of 1920, while they were
nearer four than three times the cur
rent liabilities in 1919. and reserves
were reduced by approxima tely SILL
900 900.
In 1920 the General Motors spent
S79,161,951 for new construction. This
almost completes the present construc-
ton program, and it is estimated that
an expenditure Of s1O,619, 521 in 1921
Will complete all the construction that
will be needed in the near future.
The directors at their regular meet
ing yesterday extended from April 4
to April Is the offer whereby common
stockholders we're given the privilege
to complete their fractional stock war
rants, which were issued during 1920,
IN connection with the payment Of stock
dividends. The regular dividends were
declared on the preferred and debenture
stock.