Document oMBK7q8ZpZGV8vGk77JzMXEQr
Annual Report
1936
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Th e Sh e r w in -Wil l ia ms Co*
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Th e Sh e r w in -Wil l ia ms Co.
GEORGE A. MARTIN
" PRESIDENT
To ike Stockholders'.
,,;Th|:re is presented herewith the AnnuaIJReport of the Company for thie fiscail yi ear ended August 31, 1936. The Consolidated Balance Sheet* of The Sherwin-Williams Company and Subsidiaries as at August 31, 1936 and related Consolidated . Income and Surplus Statements have been prepared by Ernst & Ernst, Certified Public Accountants, whose certificate is included in this report.
Th| net profit, before providing for federal income tax, is
$6,881,640.82. The amount set up as a reserve for federal income tax ijjjl. $994>011.74, which leaves $5,887,629.08 as the final net earnings for the year.
After deducting $790,744.50 for the Preferred Dividends paid during the fiscal year, the balance of $5,096,884.58 earned on the Common Stock is equivalent to $8.04 per shs re.
The volume of sales in dollars was 23.6% grbater than the pre vious year.
Th<! Balance Sheet.shows current assets of $31,761,998.61 and total assets of $54,214,873.42 against a total indebtedness of $4,664,157.26.
Du :ing the year, the Company made an offer of exchange to its Preferred Stockholders according to which every holder of the Comp any's 6% "AA" Preferred Stock was given the opportunity to exchange a share of the 6%"AA" Preferred Stock for a share of new 5% Preferred Stock, Series "AAA". The h Iders of about 98% of the 6% "AA" Preferred Stock accepted this offer and the remain ing shares not turned in for exchange were callecjl at the redemption price of $105.00 per share. Accordingly, the balance sheet shows $14^2(8,900.00 of new 5% Preferred Stock, Series "AAA", outstand ng as at August 31, 1936, as against $14,517,400.00 of the 6% Preferred Stock, Series "AA" outstanding August 31, 1935.
Again I wish to express my gratitude to the Organization for its loyalty and faithful service and trust that wfe will continue to enjoy the pleasant relations between Management and employees whichl have prevailed throughout the past history of the Company.
AUDITORS'CERTIFICATE
' The 'Sherwin-Williams Company/,:'
Cleveland.
y. .
We have made an examination of the consolidated bal-t nee sheet'of THE SHERWIN-WILLIAMS COMPANY and SUBSIDIARIES as at August 31, 1936, and of the state ment .of consolidated income and surplus for the year ended at that date.. In connection therewith we examined or to; ted accounting records of the Companies and other supporting evidence, and obtained information and explanations from officers and employees of the Companies3 we also made a general review of the accounting methods and of the operat ing and income accounts for the year, but we did not ma ke 1 detailed audit of the transactions.
In our opinion, based upon our examination, the accom panying balance sheet and related Statement of income and surplus fairly present the consolidated position of the Com pany and its subsidiaries as at August 31, 1936, and the results of their operations for the year ended at that date. Further, it s our opinion that the statements have been prepared in accordance with accepted accounting principles end on a baris consistent with the preceding year.
October. 23/ 1936.
ERNST & ERNST, Certified Public Accountan ts.
CONSOLIDATED . INCOME - AND SURPLUS
THE SHERWIN-WILLIAMS COMPANY ./AND SUBSIDIARIES
For the year ended August SI, 1936.
: . SUMMARY OF INCOME
Front from operations for the year ended! August -31, 1936,. .before other income, depreciation, other deductions and federal income tax
-Otherincome: . Profit on sale' of securities " -*-/lr':mr634/54
/ Interest earned, etc. -
- 66,717.88
$ ,8,094,006.46
': ,183,352.42..
Deductions: ;.' Provision for depreciation - - -
Loss an permanent assets sole! -or -
scrapped, provision for doubt-.
\ ful accounts, etc/...
--
Provision for estimated federal im-
' come-tax
-
"880,495.34
.'515,222.72 994,011.74;
'$, .8,277,358-.88 2,389,729.80
-^: .'NET PEOFIT^FOR; y E.AR Earned surplus Scptember 1, .19 56 -
8 5,887,629.08 16,146,510.65
DEDUCTIONS
umderds paid anc.'. provided tor:
Preferred ,
$ 790,744.50
Common (.f4.C (.) per share) - - 2,535,708.00
$22,034,139.63.
$3,326,452.60-
Premium on 6% preferred stock called for redemption - - - -
15,426.00
:/;!///// 3,341,877.50
"EARNED SURPLUS AUGUST 3.1, 1936 - - - - -
:1 $18,692,262.13
(Note A) The Companies* proportionate share of the operating results .of unconsolidafiedi affiliates-during' the year has been reflected in fhe foregoing* s tatement, with the exception of the results of the Cana dian affiliate. Final statement as to. operating results, of the Cahadian affiliate for the , year ended August 31, 1936 was not available .at
date: of issuance of this report.;.:'
THE
pCONSOLIDAT:ED ' ALANCI ISHEiWIN-WllLI AMS COM PANY
i
As at the close of business August
Assets
CURRENT CasJh.
Notes and acceptances receivable -
6,2^9,775.85 232,587.16
CURRI
Acco'i acc
Accounts receivable, less reserves (includes accounts amounting to
PAS
iati
$7,611.61 due from unconsolidated affiliates) ---------- 8,335,395.61
Prefe. ten
Inventories--rawmaterials^and supplies, in process and finished'mer chandise' stated on basis of lower
:
Accn tax
ofcost or market (estimated interplant and inter-company profits
1
.
.....
Depo.
have been eliminated) -
~
16,954,240.01$31,761,998.61 Mart
sul
OTHER ASSETS %
19-
Notes receivable for properties sold
'during 1934---secured, by mort gage - - - - - - - - - - - - -. $ 135,325.50
RESEEFor <
Miscellaneous notes and accounts.
pla
receivable, claims, advances, etc.,
sur
less reserves -------
374,467.96
509,793.46
of]
82]
INVESTMENTS. /
, .',.
Lin<
Securities of affiliated companies
fixe
'not consolidated (Note A) - - $ 3,764,981, 54'
Other securities--at or below-''dost
,66,0701,65'; 3,831,052.19
.c a p it ;
F re f(
FIXED ASSETS
sha
Landf> buildings,' macMnerjr and
(
equipment at cost to consolidated "dd
,, companies, less reserves. for de
predation - - - -
-
PATENTS ANE). -TRADE-MASKS Nominal.value-.- . 4 Vi
\
. V VvSO-;,:; 17,196,871..69
1.00
Com M .'TAMAril Aha' -
I 'C
DEFERRED ..
Advertising stock, stationery, eric.;-'
636,986 83
Prepaid insurance, taxes, etc. -; - - ;7 278,169 64
915,156.47
CONSCA; Briar.
$54,214,873.42
r
, (Note AJ.Iinvastrntnfis in seeuritiei of affiliated companies not consolidated induicle f as to operating
(1), investment pf.$5,695,325,00.in Canadian affiliate stated at cost which was less than
thee proportionate spar*1 of the .hook value (including intangibles).. of., the net assets d
S :
.
issuance of this all other uncons
such affiliate, as'iflhported to.the Company and (2) investijnenfcs aggregating $69,15riM which arc stated if .equity in net assets of such affiliates. Net'decrease .in equity in mi-
consolidated Canadian ftlfifiate since date1 of acquisition, not taken up by parent`Cop? pariiy,, amounted to approxiltnately $6SO,000;00 as of August: 31, .1935. (final statement
. .(Note'B)'-1, the amount of :
dealers.
.. i.. I...
O LI DATED jBALANCE ; SHEET
Vw il l ia ms c o mp a n y a n d s u b s id ia r ie s ;
at tlie close of business August 31, 1936.
Liabilities Capital Stock and Surplus
CURRENT
. Accounts . payable,, 'etc.' (includes : account amounting to$3,730Ao to.m^soH4ateAaffil-
$31,761,998.61;
Preferred dividend payable.. Sep-
' texnber 1, 1936 - - -
--
Accrued federal, state and county
;,: ,-.7.Laxes,et:c. .- - > - * -
--
Deposits---officers and employees -
Mortgage payable (existing when
subsidiary was fully acquired in
A;;.;; 1934)'
V - - - -A'-' - *
>1T m,6U.2o
.1,735,193,84 514,907.26 '
140,GOO.00 $ 4,66-!, 157.26
509,793.46i
RESERVES
For contingencies, maintenance 01 plants and employers' liability in surance (reserve for revaluation of plants, in the amount of $481,821.20., previously included here under has been deducted from fixed asset accounts)
801.379.03
3 jflSl ,052.19
17,196,871,69
,1','OOi
CAPITAL STOCK
Preferred -- authorized 395,500 shares (par value $100.00 each) Outstanding -- series "AAA' ' 5% cumulative preferred 142,089 shares - - - - - $14,208,900.00
Common. -- authorized 800,000 shares (par value $25.00 each) Outstanding -- 673,927 share s 15,848,175.00
.915,156,47. **$r>0A*3. j `>14, U07fa*- *4**T**r-
CONSOLIDATED EARNED SURPLUS
Balance August 31, 1936 ----------
18,692,262.13 48,749.337.13
W $64,214,875.42
s no! consolidated incleds I
t cost, which was less fhaa .J, ibles) of the' net. onsets of | its aggregating. $69,156,54 i l decrease.in equity ifl |'
taken up by parent: Com*' s : 31, 1955 (final staterarni t
as to operating resnifs -for year ended August ol, .1936 was not available at date of issuance of this report). Proportionate share (not significant) of net profits or losses on
'ill oi.her unconsolidated affiliates ha.; been taken up.
(Note B) The Companies were reported contingently liable at August 51, 1936 in
tpe amount of $15,147,06 as guarantors of a portion of certain botes discounted by
denUrs.
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