Masonry Magazine May 1962 Page. 15
Financing for the Mason Contractor
(Continued from page 6)
I don't recommend this, but sometimes he will lend you the money to do the job. Or the owner will lend you money to do the job. Generally speaking, these can be dangerous people from whom to borrow money, but it has been done successfully. Then, of course, there is that very delightful person, the supplier, from whom so many people borrow without permission. And a few borrow with permission. And of course, there are occasionally enlightened suppliers - plug for Texas Industries - who have their own financial companies, whose business it is to teach their customers how to run their businesses properly, and will provide funds to those who do, as bankers, until they teach them how to get it from banks, and they are not needed any longer. But that type of supplier is not quite so common.
Gentlemen, you have heard the magic formula. And with the magic formula, you get a guarantee. It works every time. Use it.
Thank you.
QUESTION: In your opinion, do you feel that it is better to record depreciation on the basis of actual usage, rather than on the basis of, say, the conventional federal allowances?
ANSWER: Well, this is an interesting question. Did you get the question? The question was, in my opinion, did I think it better to record the depreciation on the basis of actual usage, or in the conventional way, as prescribed by Internal Revenue methods.
Well, this is a very interesting question, because what the gentleman really says is this: Should your financial statements reflect the truth relative to your operations, or should it reflect some customary, arbitrary, stereotyped form of accounting? I would answer his question in this way: If your operation is big enough, and you are sufficiently willing to accept the need for proper figures, I would run two sets of books. I would run a set of books for operations, in which I reflected accurately what the truth was on depreciation, and then I would run a set of books the way the United States Government requires you to run a set of books, and while this might give you some additional cost in your books - and incidentally, I have never been able to convince my treasurer to do this - it would give you an opportunity, when you were doing your bidding, to know what you were doing instead of guessing what you were doing. If I were running a job shop, I would do that even if my operating set of books was much less formal than my regular set of books.
QUESTION: What are your feelings about renting or buying equipment?
ANSWER: There is really no difference between renting and buying equipment, unless you are talking about true renting. In other words, if you are talking about renting a piece of equipment for a specific job, and when the job is over, you have no further obligation, that's just simply a question of arithmetic. Do you think you are going to need it again in the future? Or can you charge it off to the job, and have no further obligation? But if you are talking about this fancy kind of renting that goes on today, where you agree to pay rent until it is paid, plus the interest, and then agree to buy it back for a dollar, that's not renting, that's buying. This is just another method of financing, and you shouldn't kid yourself about that method of financing, it is an absolute obligation.
Any other questions? Thank you.
(Applause.)
MAA Members will receive Mr. Roger's entire address in a Special Report to be issued during June.
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15