Free The Money Makers by Harry Bingham Page B

they had been run off using a computer, not a quill pen. George pored over the papers. Until a little over two months ago, he’d never looked at a balance sheet in his life and vaguely thought that double-entry book-keeping was something practised by the shadier sort of bookmaker. He’d had plenty to learn.
    He looked at the annual accounts for every year since 1980. He looked at the monthly reports for each of the last thirty-six months. He had Tom Gissing explain to him in laborious detail the intricacies of the ‘LIFO’ inventory reporting system, the reducing balance method of depreciation, the acronyms used to identify the machine tools logged on the register of assets. He even drank two mugs of peaty tea.
    After eight solid hours he understood the story. Back in the early eighties, recession had actually been kind to Gissings. Larger competitors had seen their export markets wither and hadn’t chopped their costs quickly enough. Gissings, without an export market to lose, had trimmed costs, redesigned its products, and made money. It had earned revenues of £1.9 million on costs of £1.7 million. Mr Gissing, as managing director, had elected to pay the shareholder, Mr Gissing, a handsome dividend of £50,000. But that was a long time ago.
    The profit spurt of the early eighties dwindled away as other companies found their feet. For the last part of the decade, the company had bumped along at break-even, squeezing capital expenditure here, trimming marketing budgets there, forsaking product development in favour of cosmetic changes which came too little, too late.
    The recession of the nineties had been cruel. In the last year before the economy tanked, old Tom Gissing had somehow persuaded his bank to approve a loan of £400,000. The idea was to provide the impetus for a major renewal. The production area was to be expanded and modernised, and new computer design systems would be introduced. Perhaps, just perhaps, if all had gone according to plan, The Gissings Modern Furniture Company would have found a new lease of life.
    But recession came. Gissings’ markets trembled and collapsed. The money from the loan went to meet the company’s losses. Worse still, the prime contractor on the construction work went bust with the job half done and Gissings’ advance payments in his pocket. Redesign of the product range was halted. Costs were trimmed when they should have been slashed. The £400,000 loan ballooned into £550,000, with arrears of interest. Penalty interest was now being charged and the dangerous snowball gathered momentum at a compound rate.
    Meanwhile, old man Gissing had lost his will to fight. He spent his time sorting through the company archives and threw his remaining energies into setting up a ‘museum’ to lure visitors to the factory shop.
    The bank had been tolerant, but its patience was at an end. Three weeks ago the bank had called in its loan. Gissings had thirty days to find the cash. If it failed, the official receiver - a cross between a bailiff and an undertaker - would step in. He would auction the company for whatever he could get, and if he thought the company would fetch nothing, he’d close it down and sell the assets piece by piece. Either way, Tom Gissing wouldn’t end up with a brass farthing.
    The thought terrified the old man. Losing the company to someone else would be hard, but watching the firm die would probably kill him. That was why he had called in the accountants. The accountants had come in, drawn up a report, and stuck an ad in the ‘Businesses for Sale’ page of the Financial Times. That was where George had found the name, and where he’d obtained the report which had encouraged him to make the visit. But whatever rosy words the accountants used, the company was in a desperate plight.
    It was now eight days before the deadline and the evening was drawing on. George had read everything, examined everything. He had seen all he wanted and still had no idea whether