Carrol Daily Times Herald from Carroll, Iowa on July 10, 1974 · Page 15
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Carrol Daily Times Herald from Carroll, Iowa · Page 15

Carroll, Iowa
Issue Date:
Wednesday, July 10, 1974
Page 15
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Piercing the Profit Sheet Times Herald, Carroll, la. Wednesday, July 10, 1974 16 An important consideration in weighing the price-earnings ratio of an individual stock is to investigate the quality of the earnings being reported. Some of the tricks are pretty obvious once you know what you're looking for. For example, companies like to play with their depreciation expenses. If they stretch out the theoretical life of their equipment, this can increase their net earnings in the intervening years — without really improving the company's prospects. In the late 1960s, when the conglomerate balloon was still being inflated, a company with a high P-E would buy one with a low P-K. me laneoyer instantly bolstered the first company's earnings per share. The idea of the game was that its stock would then sell even higher and it would then take over another low P-E company, thereby again increasing its over-all earnings, and so on into the jazzy night. The trouble was that the increases were not based on sound growth of sales and profits but on acquisitions and manipulations. And as it must with all pyramid clubs, the game finally ended. Another sneaky tactic is that, in recent years, a number of major corporations have announced programs for buying their own stocks, especially when the prices of those stocks were depressed. Now an investor might think this a splendid confirmation of his own fine judgment. After all, if the corporation itself is buying its stock, it must augur great things to come, right? Don't count on it. A further pitfall inexperienced investors often encounter is the failure to distinguish between "fully diluted" and "undiluted" earnings. Undiluted earnings can be as powerful as 100-proof bourbon, and equally apt to lead you astray. You buy stock in a company in the expectations that its earnings will increase. The earnings duly increase — but the earnings-per-share do not, because there are suddenly, say, 50 per cent more shares outstanding. So what happened? The answer could be that there were numerous "convertible" securities lurking in the background all the time — issues, such as bonds, that have the right eventually to be converted into the company's common stock at a given price. Whenever there are any kinds of convertible securities outstanding, there is potential "dilution" of common stock Iowa Bookshelf THE EMERGING CONSTITUTION. By Rexford G. Tugwell. (Harper,)20.00) This book is a compilation of papers written for and discussed by the Center for the Study of Democratic Institutions. Rexford G. Tugwell was a member of Franklin Roosevelt's "Brain Trust" and has had much experience in government. For many years the Constitution has been looked upon as almost a sacrosanct document, classed in importance with the Magna Carta, The Bill of Rights, and perhaps even the Ten Commandments that it gives one a mental jolt to have Mr. Tugwell point out in great detail and with quotations and incidents to prove his points that in many incidents the Constitution is out dated and obsolete and in some instances the language almost ambiguous. He points out that the country is vastly bigger, the population many times greater and therefore situations can not be judged in the same way as when the founding Fathers wrote this document. This is a book for serious students of government and the legal profession. It is well documented and readable but it is not for the layman. — Genevieve Spaulding. KILGAREN. By Isabelle Holland. (Weybright &Talley, $6.96) Kilgaren has all the credentials for a proper Gothic novel: financially strapped innocence, (female), a darkly mysterious, strong-willed presence (male), a decaying ancestral home and danger which lurks in a rich setting — in this case the West Indies. There are occasional sparks of humor and some crisp dialogue which one guesses may put the book a cut above its genre. BLACKS fe. IW NOW WUL AttER 8C Nazi Demonstrators — Indifferent passerby walks past American Nazi Party members picketing the St. Louis city jail. Nazi demonstrators were protesting alleged discrimination against white prisoners they claim have been brutalized by black prisoners and guards. Despite racially provocative placards displayed by Nazis, there were no incidents reported. Summoned by her older ^° teach school at Great half-brother! Barbara "°, use ' ^ e s .y mbo1 of luhe Kilgaren family s intrenched Kilgaren returns from the sway. Awaiting her are states to her childhood home her lone canine companion and herselt, confused family trees, love and an obstreperous pupil — not necessarily in that order. — Ellin Hunter RIDICUL RN AUTO STARTS ARLY Thursday thru Saturday Getting hot over crisis living...and cost COOL WITH THIS REFRESHING WHIRLPOOL July 11 13 Model AXM-PSO 2 This THEY COME WITH A NO-SWEAT WARRANTY. For one year, we will repair or replace all parts of any Whirlpool room air conditioner found by us to be defective in materials or workmanship —free of charge. For five years, we will repair or replace all parts of the sealed refrigeration system found by us to be defective in materials or workmanship—free of charge. We do require that warranty service be done by a Whirlpool franchisee! TECH-CARE* service company. What else do you need to know? \Vhirlpool 5,000 BTU/HR. AIR CONDITIONER HAS COMFORT GUARD' CONTROL FOR BALANCED COOLING, PLUS INSTA-MOUNT. Other Whirlpool Floor Models Whirlpool Ref. 12 cu. ft. Automatic Defrost 209 95 Whirlpool Ref. 19 cu. ft. Side by Side 399'* Whirlpool Automatic Washer 3 Cycle 18-Lb 199 95 Whirlpool Automatic Dryer (Elec.) 149 95 Whirlpool Dishwasherw/super scour <AII color) 209 95 Imperial Electric Range Chalet w/warm tray Si™ 319 95 Imperial Electric Range ''Smooth Top" S 399 95 Whirlpool 18,000 Air Conditioner 299 9 * Whirlpool TrashmaSher w/built in bag storage 199 95 Litton Micro Wave w/Defrost cycle 329 95 RCA 14" Color TV Port 249 95 RCA 15" Port. Color TV XL100 349" RCA 17" Port. Color TV XL100 399 9 * RCA 17" B & W TV 11995 RCA 25" Console Color TV XL100 529 95 RCA Console Stereo Credenza 239 95 RCA Component Tape & Record Play AM/FM 139 95 ______ • »^ • «» . 1 speaker damaged _.__ RCA Record Player Stereo w/Magnum Separ. Speaker 79 95 Lloyds Component Tapeplayer 69 95 Lloyds Component Record Player 69 95 Lloyds Component AM/FM „£'£?£_.„ 129 9 * Whirlpool Dehumidifier Vinyl Rocker-recliner Slight damage Philco ALL SOLID STATE S 519 95 Philco 12" Portable B&W 84 95 II Philco 18 Port. B&W $12995 16"TRUETONE Solid State S24995 Truetone AM/FM Stereo Component 22" Lawn Mower Adj. whls. 3 1 /2 B & S 69 95 20" 2 Speed Fan H78-15 Radial Tires Ea S 44' 5 • « Giant 20.4 cu. ft. side by side refrigerator. • Stores 13,7 cu. ft. fresh food. 3. 234 Ib. capacity freezer section has 4 shelves, slide-out meat basket and stores 6.67 cu. ft. White. Colors slightly higher With Trade Model No. 3WC 1934 Worried about inflation. This refrigerator was catalog priced in July, 1973 at $474.95 and now carries the low price of only $339.95. WESTERN AUTO CARROLL

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