The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-03-16
EXPENSES TAKE
81 PER CENT OF
GAS REVENUES
Operating Costs Eat Up
$40 of Every SAG, Survey
of Records Shows.

period the entire cost Of the plant
will have been written-off.
Application Of either too large or
too small allowances for depreciation
tends 70 give a false impression Of
the cOmpany's position.
For instance the properties Of the
Citizens Gas Co. and the Indianap-
oils Gas Co. we're welded into
single unit. as far as income state
ments are concerned, IN 1913 when
the lease between the two companies
was signed. This brought together
two plants with an estimated cost
OF approximately S1sOO0OO0.
Only SI2.995 Allowed
Despite this. the company in 1914
allowed only SO 995 for depreciation.
on this basis that same sum would
have 70 be charged for more than
400 years before the fun value could
be written of the books.
In the next year only SD. 43l was
allowed for depreciation, in 1916,
sI88. 625. in 1917. sl66.764: in 1913,
sl3OO48: in 1919. S73. l07. IN 1920,
s224 So. in 1921. $4,000: IN 1922,
SIP 500. IN 1923. $4,000. and sub
sequent years 10 date allowances Of
more than 100000 have been made.
II analyzing the earnings position
Of the Citizens Gas Co. the best re-
suits can be obtained by segregating
earnings into three classes-com-
merCial. industrial and residual.
Commercial earnings represent the
return from sales Of gas TO individ-
Uals. industrial earnings represent
the return from sales Of gas 10 in
dustry and earnings from residuals
represent the return from sales Of
coke and other products manu-
featured by the company.
Position Since Reversed
From 1914 TO 1927 earnings from
residuals we're greater than earn
ings IN the commercial classical
ton in every year except two, 1922
and 1924 Since 1923. however, the
position has been reversed and the
revenues from commercial sales of
gas have been above the return
from sales of residuals in every
year.
Since 1914 commercial earnings
have risen shaTpl-. In that year the
low point for revenues in that field
was reached when the total was
S924743.
Earnings then moved consistently
forward from year to year until
the su-time peak Of s2.9O7 .253 was
reached in 1924. In the intervening
years the downward variation in
earnings has been limited to less
than 100000 in any single year.
Low Point Was in 1914
The low point in commercial earn
ings was S924.743 in 1914; the high
point was S29O7253 in 1924, and
the average yearly revenues since
1914 has been S2146.444. Thus. any
chart depicting the trend of COM
mercial earnings over a term of
years would not show a great dis
Crepancy between average earnings
and the high and low points.
The low point in earnings from
rcsiduals was reached in 1914 when
the total was Sl.065.l19. The high
point was s6331 OFT in 1920. The
average yearly earnings from this
source since 1914 has been S2.611.2l3.
The sharp rise and fall in this
classification is due to the fact that
the price Of coke has fiuctuated
within a wide range over a period OF
years.
Industrial earnings today conSti-
tUte only about One-tenth of the
earnings from commercial sales. The
lowest figure was S4l6 in 1918, while
the peak Of S394 400 was attained
in the boom year Of 1929. At the
close Of 1867 earnings from this
source amounted 10 S2l2. 264.
Monday-PrOductiOn Costs Ana
lived.