Let us return to the report and balance-sheet of Messrs. Bass, Ratcliff & Gretton and see what the directors of this company do with the profit at which they arrive after making the provisions recorded in the last chapter.
According to their statement in the report the profit amounts to £537,000 before charging interest on Debenture Stock, but since interest on Debenture Stock is a charge that has to be met, unless a company is prepared to compound with its creditors or commit an act of bankruptcy, it seems to be sounder and more logical to take off this interest, which comes to £81,000 for the year, before we arrive at the profit which the Board may or may not distribute to shareholders. On this basis Messrs. Bass's profit for the year to June 30, 1925, was £456,000.
Of this sum £68,000 goes in dividend on the preference stock, and £265,000 in
