The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-03-16
EXPENSES TAKE
82PER CENT OF
GAS REVENUES
Operating Costs Nearly Eat
Up All Funds, Survey OF
Records Shows.
Continued From Page Onel

Thus BY the end OF the 20-year
period the entire cost OF the plant
viii 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 a
single unit, as far as income state
ments are concerned. in 1913 when
the lease between tn two companies
was signed. This brought together
two plants with an estimated cost
OF approximately 1900, 600.
Only Si2.995 Allowed
Despite this. the company in 1914
allowed only s42.995 for depreciation.
on this basis that same sum would
have 10 be charged for more than
400 years before the fun value could
be written of the books.
In the next year only 22.431 was
allowed for depreciation; in 1916,
S1s86 SIS: in 1917. sl66.764. in 1918,
sl30O4s. in 1919. 73.1O7: in 1920,
s224.544. in 1921 $4,000: in 1922.
SlI25OO: in 1923. $4,000. and sub
sequent years Odate allowances Of
more than 100000 have been made
In analyzing the earnings position
Of the Citizens Gas Co. the best re-
suits can be obtained by segregating
earning. into three clasSeS-cOm-
mercial. .duStrial and residual.
COmmerc- earnings represent the
return fro. ales Of gas TO individ-
uals: indus I earnings represent
the return I. sales Of gas TO in
dustry and ca. 'ngs from reaiduals
represent the i'm from sales OF
coke and othc products manu-
featured by the company.
Position Since Reversed
From 1914 to 1927 earnings from
residualS were 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
fro msales of residuals in every
year.
Since 1914 commercial earnings
have risen sharply in that year the
low point for revenues in that field
was reached when the total was
S924.743.
Earnings then moved consistently
forward from year to year until
the an-time peak Of S2907.253 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 10 wpOint in commercial earn
ings was S924.743 in 1914; the high
point was s29O7.253 in 1924, and
the average yearly revenues since
1914 has beenn S2.148.444. Thus. any
chart depicting the trend of COM
mercisl earnings over a term of
years would not show a great dis
crepancy between average earnings
and the high and low points.
The 'ow point in earnings from
residuaLs was reached in 1914 when
the total was S1.O65.l19. The high
point was s6.331 OFT in 1920. The
average yearly earnings from this
source since 1914 has been S2.611 .2I3.
The sharp rise and fall in this
classification is due TO the fact that
theprice of coke has fluctuated
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 1894 .4O9 was attained
in the boom year of 1929. At the
close OF 1888 earnings from this
source amounted to S212 264.