dow chemical company annual report - 1935

8/14/2019 Dow Chemical Company Annual Report - 1935

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The Dow Chemical Company

Condensed Financial ReportMay 31,1935


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To the St ockh olders of th e Dow Ch emicalCompany :The Dow Chem ical Compan y is pleased

to presen t her ewith th e following pages ofinformat ion concern ing th e finan cial stat usof th e Compan y. The earnings per shar eof th e out sta nding stock a re $3.32, a fterma king allowance for depr eciat ion, incom.eta x an d th e pr eferr ed stock dividends. Itis believed th e inform at ion is clear ly setfort h and the explanations and comment sby th e Audit ors ar e also self-explan at ory.Further comment here would only be arepet ition. A more conclusive present at ionof facts would be apparent by paying theCompan y a visit. We cordially invite allst ockh older s to visit our home office an dth e principal man ufactur ing plant at Mid-land, Michigan.

Very truly yours,WILLARD H. DOW,

President.July 10, 1935.


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THE DOW CH(Incorpora

BALANCE S

ASSETSCURRENT ASSE TS :

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,119,451.17United Stat es Government securities-at

cost (face valu e, $1,000,000.00; mar ketvalue, $1,066,625.00) . . . . . . . . . . . . . . 1,059,375.00

Notes an d account s r eceivable (cust om-er s, $2,068,879.78; officer s an d em-ployees, $8,988.23; an d sund ry, $42,-293.49)~less r eser ve, $1053962.68 . . . 2,014,198.82

Inventories of finished goods, work inprocess, an d ma terials an d supplies-at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,663,355.92

Tota l cur ren t as set s . . . . . . . . . . . . . . . . . . . . . . . . $ 8,856,380.91CLAIMS AGAINSTBANKS IN LIQVIDATION (less reserve forloss , $35,000.00) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,492.84RECEIVABLEROM N DIVIDUALSN SALESOF HOUSESANDLOTS 26,972.63RE CEIVABLE ROMSU BS ID I~Y CO MP ANIE S . . . . . . . . . . . . . . 293,229.28INVESTMENTS-AT COST

Subsidiar y an d affiliat ed compan ies (atcost, which is less than this companysbook equ ity ther ein) . . . . . . . . . . . . . . . $ 604,277.OO

Comm on capita l stock in tr easu ry (7,286no par comm on sh ar es) . . . . . . . . . . . . 314,958.11

Miscellaneous securities . . . . . . . . . . . . . . 132,103.57Tota l inves tm ents . . . . . . . . . . . . . . . . . . . . . . . . . 1,051,338.68

F IXED ASSETSReal estat e, plarr ts an d equipment (less re-

ser ves for depreciat ion, $9,416,563.25) $16,068,778.82Patents (less reserve for amortization,

$5,350.02) . . . . . . . . . . . . . . . . . . . . . . . 19,407.18Good-will . . . . . . . . . . . . . . . . . . . . . . . . . . 587,267.50

Tota l fixed asse t s . . . . . . . . . . . . . . . . . . . . . . . . . . 16,675,453.50DEF ER RE D HARGES-UNEXP IRE D NSURANCE RE MIUMS,UN-

AMORTIZED OTE DISCOU NT,E TC . . . . . . . . . . . . . . . . . . . . . 143,400.13.OTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,082,267.97

NOTATIONS :Under an agreement providin,u for th e forma tion of th e CliffsDow Chem ical Compan y, a par tially owned su bsidiary organ izedin 1935, the company has agreed to purchase Class A preferredcapital stock of the subsidiary in amoun ts su fficient to pr ovidefunds for plant expansion and th e need for

funds is determined by theto an extent not to exceedparties to the agreement trequired for this purpose, t1935 to 1937, inclusive).$75,000.00 requested by t


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CAL COMPANYL Michigan )MAY 31, 1935

LIABILITIESCURRENT LIABILITIES :

Accounts payable:Trad e an d miscellan eous . . . . . . . . . . . . $1,245,007.39Subsidiary an d affiliat ed compa nies . . . 84,781.59

Employees compensation awards . . . . . . . 56,163.30Federa l in come t ax-cur ren t year . . . . . . 477,754.76Serial n otes, 21/z%, series due J an ua ry 1,

1936 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720,OOO.OOAccru ed Accounts :

Local pr opert y ta xes . . . . $104,323.99Federa l capita l stock ta x

-estimated . . . . . . . . . 44,ooo.ooIn terest . . . . . . . . . . . . . . . 37,500.oo 185,823.99

Tota l cur ren t liabil.ities . . . . . . . . . . . . . . . . . . . . $ 2,769,531.03SERIALNOTES,21&% (exclusive of $720,000.00 included incurrent liabilities) -$720,000.00 MATURING N J ANUARY

OF E AC H OF T HE YEARS 1937 TO 1940, INCLUSIVE . . . . . . 2,880,OOO.OORE SE RVE OR F IR E AND ACCIDE NT NSURANCE . . . . . . . . . . . 193,093.14P RE FE RR ED APITAL STOCK-~% CUMULATIVE authorizedan d outst an ding, 30,000 sh ar es of $100.00 each) . . . . . . 3,000,000.00COMMONCAPITAL TOCK (au th orized, l,OOO,OOO ha res with-out par value; issued, 945,000 sha res) . . . . . . . . . . . . . . . 12,685,OOO.OOEARNEDSUR P LUS .,................................. 5,554,643.80

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,082,267.97

tof Directors of the subsidiary,doo.00 (it is estima ted by th eoximately $750,000.00 will beended over the calendar yearsMay 31, 1935, an amount ofsidiary prior to that date to

apply on this comm itment has been included as a cur rent liabilityin the above balance sheet.At May 31, 1935, th er e wer e cont ingen t liabilities of $35,546.92on account of notes receivable sold under repu rcha se agr eemen tan d of $16,826.04 on a comm ercial letter of credit.


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THE DOW CHEMICAL COMPANYSUMMARY OF INCOME AND SURP LUS FOR THE

YEAR ENDED MAY 31, 1935

GROSSP R O F I TFROM SALES BEFOR E ROVIDING OR DEPR E-CIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,437,268.43

SELLINGAND ADMINIS TR ATIVEXP E NS E S . . . . . . . . . . . . . . . 1,043,818.73P R O F I TFROM OPE RATIONS EFOR E ROVIDING OR DEP RECI-

ATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,393,449.70P R OVISI ON O R DE P R EC IATI ON . . . . . . . . . . . . . . . . . . . . . . . . 1,387,532.75P R O F I TFROM OP ERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,005,916.95OTHER INCOME:Cash discount s on pur cha ses, int erest

earned, and premium on Canadianfun ds . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 82,378.15

Div,idends from su bsidiary an d affiliat edcompa nies (th ese dividends ar e less th anequity in earn ings of such compa niesfor the year) ...................... 317,651.27

Royalties ........................... 74,703.87Miscellaneous ....................... 33,202.53 507,935.82GR OS S NCOM E ...................................... $ 4,513,852.77INCOME CHARGE S:Cash discounts on sales ............... $ 145,462.74

Pr ovision for un collectible account s .... 35,200.OOResearch and experimenta l ........... 368,876.94Interest ............................. 162,487.85Miscellaneous ....................... 3,290.01 715,317.54

NET INCOMEBEFOR E EDERAL NCOMETAX ............. $ 3,798,535.23F E DE R AL NC OM E TAX ............................... 477,564.82NE T INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,320,970.41SURP LUS T BEGINNING F THE YEAR . . . . . . . . . . . . . . . . . . . 8,729,089.39GROSSS URP L US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,050,059.80SURPLUSCHARGE-DIVIDENDS

Cash :Pr eferr ed capit al st ock . . . . . . . . . . . . . . $ 210,000.00Common capital stock . . . . . . . . . . . . . . 1,875,416.00

Tot a l . . . . . . . . . . . . . . . . . . . . . . . $2,085,416.00St ock-50% comm on st ock dividen d . . . . 4,410,OOO.OO 6,495,416.00

S URP L USAT END OF TH E YEAR . . . . . . . . . . . . . . . . . . . . . . . . $ 5,554,643.80


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ACCOUNTANTS CERTIFICATEThe Dow Chemical Company:

We ha ve made an examination of th e balance sheet of TheDow Chemical Compa ny as of May 31, 1935, an d of th e rela tedsumm ary of income an d surplus for th e year ended th at dat e. Inconn ection th erewith, we made a review of th e accoun ting meth ods,examined or test ed, in a man ner and to th e extent wh ich we con-sidered appr opriat e in view of th e compan ys system of int ern alaccount ing contr ol, account ing record s of th e compan y an d othersupportin g evidence, and made a general review of th e operat ingand income accoun ts for t he year, but we did not ma ke a detailedaudit of the transactions.

The account s of subsidiar y an d affiliat ed compan ies car riedas investm ent s at a cost of $604,277.00 in th e accompan ying bal-an ce sheet were not examined by us at May 31, 1935. Examina -tions of th e account s of four of th e compan ies, th e investm ent inwhich amoun ted to $359276.00, ar e now in progress but no exam-ination is cont emplated by us of th e remain ing compa nies.

We did not verify th e quan tities in the inventories but werefurn ished with a cert ificat e of officials of th e compa ny as to th equan tities upon which t he inventory values wer e based.

In our opinion, subject to th e foregoing, th e accompan yingbalance sheet, with the notations thereon, and related sumrn ary dfincome a nd sur plus fairly present , in accorda nce with acceptedprin ciples of account ing consisten tly followed by th e compan y, itsfinan cial cond ition at May 31, 1935, and the resu lts of its opera-tions for the year ended that date.

HASKINS & SELLS.Detroit, July 2, 1935.


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THE DOWCHEMICAL COMPANY

DIRECTORS-JULY 10,193sE. 0. BARSTOW L. I. DOANE. W. BENNETT W. H. DOWG. E. COLLINGS J. T. PARDEEJ. S. CRIDER C. J. STROSACKER

W. R. VEAZEY

OFFICERS-JULY 10,193sChairma n of th e Boar d . . . . . . . . . . . . . . J. T. PARDEEPr esident an d Gener al Man ager . . . . . . . . . W. H. DOWVice President . . . . . . . . . . . . . . . . . . . G. E. COLLINGSV.ice Pres iden t . . . . . . . . . . . . . . . . . . . . . J. T. PARDEEVice P residen t, Secy an d Trea su rer . . E. W. BENN ETTAssist an t Treasu rer . . . . . . . . . . . . . . . . . J. S. CRIDERAud itor an d Assista nt Secret ar y . . L. A. CHICHE STER

Registra r an d Tran sfer AgentTHE CLEVELAND TRUST COMPANY

CLEVELAND, OHIO

dow chemical company annual report - 1935

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