78 BULLETIN 1317, U. S. DEPARTMENT OF AGRICULTURE 
as depreciation and interest on owned capital would not greatly af- 
fect the amount of total expense or of net profit. Error was largely 
avoided by making actual inventories of equipment, but in dealing 
with investment items alone it should be understood that there is 
possibility of greater percentage of error than in dealing with ex- 
penses and profits. 
(2) In the amount of merchandise inventory there is a wide dif- 
ference between those concerns handling meats alone and those 
handling in addition even a small percentage of more slowly moving 
merchandise. Since a small percentage of such merchandise does not 
appreciably affect the various items of expense, it seemed desirable 
to include such concerns in the study of operating expenses, in order 
to have data from a larger number of concerns. Since in their invest- 
ment items these concerns differ greatly from concerns carrying meats 
exclusively, it has seemed best not to include them in summarizing data 
regarding merchandise inventory and other items of investment. 
Accordingly, in the study of investment and stock turn, data are used 
for the 60 carry stores and 88 delivery stores with trade limited 
strictly to meats, a total of 148 (Table 43), instead of the larger 
number used in studying operating expenses and profits (Table 28). 
(3) Valuation of equipment presented such difficulties as must 
necessarily occur at a time of violent changes in prices. If equip- 
ment should be valued on one basis at the beginning of the year and 
on another at the close, it is obvious that the net profit would be af- 
fected by the change. Although such a change in basis would 
more accurately show the net worth of the concern, it would incor- 
rectly show the business profits of its merchandising operations. 
Accordingly, the same basis of valuation per unit of equipment was 
used at the beginning and at the close of the year, with allowance 
merely for depreciation from usuage and obsolescence. 
STORE AND OFFICE EQUIPMENT 
Inventory value of store and office equipment varied from approxi- 
mately 5 per cent of the amount of annual net sales in the smallest 
stores to approximately 3 per cent in the largest (see Table 43). 
Although equipment is regularly much more complete and more ex- 
pensive in the larger stores, the larger volume of sales makes possible 
the utilization of the equipment so much more constantly that the 
percentage relation to business done is lower. As between carry and 
delivery stores, the relation of store and office equipment to sales was 
found "to be appreciably higher in the former than in the latter. 
For attracting trade the carry store must rely in a large part upon 
the general appearance of equipment for customers shopping in 
person, along with lower prices, while the delivery store relies more 
largely upon the service rendered. 
DELIVERY EQUIPMENT 
Inventory value of delivery equipment varied from approximately 
1 per cent of the amount of annual net sales in the smallest stores 
to approximately 0.4 per cent in the largest. The high ratio in 
the smaller stores is undoubtedly largely due to the fact that the 
equipment is idle a large part of the time, while it is more con- 
stantly utilized in the larger stores. It accords with a higher wage 
expense for delivery in smaller than in larger stores. (See Table 28.) 
