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For nalionally odvertised products mqnuflactured by:..

Bowers Mqnufqcturing Co.

Celotex Corporotion

Colorcdo Fuel & lron Corp.

Heqtilotor, Inc.

Henry Aspholr Compony

Kqiser Aluminum income taxes. This lvould Ieave I0/o. A sound operation has to plan for the future. It must have money for expansion, for catastrophies, for slow periods, for bad credit Iosses, and for all of the other things for which we must have reserves of cash.

Keystone Steel & Wire Co.

It is generally considered a good policy to set aside half or 5/o of our profit for this purpose. This would leave 5/o that could be paid out to stockholders or taken out of tlre company. If you can put your money out at 6 to 8% then we shouldn't be satisfied with less than 5/o in the form of returns that can be taken out of the company.

Bankers and men of high finance ahvays consider the value of the company on the basis of return to investment. They are not concerned lvith the net return to sales. Net

Proteclion Producls

Richkrqfi Compony

Tension-Tife Window Screen Co.

U. S. Gypsum Compony

Wood Conversion Compony return to sales does not tell the story, because it does not take into consideration the investment necessary to get those sales.

If we will accept this sound approach to business analysis, th,en we have a basis for pricing merchandise that takes into consideration many factors that ,cannot otherwise be considered. The number of times that you turn an inventory item affects your net profit to investment. Increased turn allows a decreased net profit in order to make satisfactory net returns to investment.

Let's assume that you were running a yard where the inventory is $50,000.00, accounts receivable is $30,000.@ and fixed assets are $20.000.00.

The relationship between total assets and inventory is