EXHIBIT 2-4 Abt Associates Inc. Social and Financial Balance Sheet

EXHIBIT 2-4
Abt Associates Inc. Social and Financial Balance Sheet
and Income Statement
Abt Associates Inc. Social and Financial Balance Sheet..
1974
1973
$ 7,555,000
14,895,000
6,384,000
15,261,000
2,986,000
2,051,000
..., _.-
Assets (Note 1)
Staff Available Within One Year (Note 2)
Staff
Avaj]able After One Year (Note 3)
......
"""
Training
Investment
(Note 4)
25,436,000
Less Accumulated Training
Obsolescence (Note 4)
Total
=
<:)
.....
....,
1,422,000
503,000
$24,014,000
23,193,000
Creation and Development of Organization
Research (Note 5)
..... Child Care Development
.
$
Sodal Audit Development
0
v .,.
23,696,000
Total
Public Services Paid For Through Taxes
(Net of Consumption) (Note 6)
554,000
437,000
25,000
46,000
'7,000
32,000
$
625,000
476,000
$
839,000
365,000
:.:: =
..Q ::I
Q
ClJU
="0
0;
Total
Cash
AccountsReceivableLessAllowancefor
DoubtfulAccounts
UnbilledContractCost and Fees.
$
839,000
365,000
$
27,000
91,000
1,567,000
1,886,000
169,000
6,000
2,083,000
1,789,000
42,000
39,000
.
Other Curren t Financial Assets
Other Long-Tenn Financial Assets
"0Q.I
-
y
.s
Cl)
46
Total
$ 3,655,000
4,044,000
$
106,000
467,000
3,649,000
430,000
4,652,000
336,000
°
310,000
2,157,000
242,000
2,7('j},000
204,000
Total
$ 4;316,000
2,505,000
Total
$33,449,000
30,583,000
PhysicalAssets:
Recreation Center
Land and Improvements
Buildings and Improvements
Equipment, Fumiture, and Fixtures
Total Fixed Assets
Less ACt.'UmulatedDepreciation
1974
Liabilities (Note 7)
Staff Wages Payable (Note 8)
Organizational Financing Requirement (Note 9)
Environmental Resources Used Through Pollution:
Paper
Electricity
Commuting
Notes Payable (Current)
Accounts Payable & Accrued Expenses
Accrued Expenses
Federal Income Taxes
Deferred FederaUncome Taxes
Notes Payable (Long-Tenn)
Leasehold Interest in Property
. ."'
1973
$24,014,000
23,193,000
$24,014,000
23,193,000
$ 1,056,000
563,000
$ 1,056,000
563,000
Equity
See statement below for
stafHinancial equity that is
not a social asset or social
liability.
1973
1974
o
o
(431,000)
(87,000)
$
18,000
113,000
58,000
11,000
76,000
37,000
$
189,000
124,000
650,000
24t ,000
$
406,000
788,000
1,059,000
24,000
98,000
2,300,000
130,000
514,000
1,081.000
875,000
109,000
52,000
1,092,000
128,000
Staff Stockholders Equity:
Common Stock
95,000
480,000
Additional Paid-In Capital
444,000
Retained Eami ngs
Total
$1,019,000
95,000
480,000
249,000
824,000
Non-Staff Stockholders
Equity:
Common Stock
200,000
Additional Paid-In Capital 1,011,000
936,000
Retained Earnings
Total
$2,147,000
200,000
1,011,000
618,000
1,829,000
$3,385,000
2,807,000
$ 4,805,000
3,851,000
$30,064,000
27,731.000
"
47
-_.
EXHIBIT 2-4
(Continued)
Abt Associates Inc. Social and Financial Income Statement
Benefits
Contract Revenue and Other Inroffie (Note 10)
Federal Services Consumed (Note 11)
State Services Consumed
LocatServices Consumed
~ Environmental Resources Used Through
Pollution (Note 12)
'0
Electricity
:f2
Commuting
.s
Paper
1974
1973
$16,423,000
262,000
104,000
40,000
15,224,000
195,000
80,000
32,000
31,000
21,000
7,000
35,000
17,000
6,000
$16,894,000
15.589,000
$ 6,231,000
700,000
719,000
461,000
185,000
50,000
95,000
15,000
67,000
134,000
18,000
11,000
-~ 27,000
$ 8,713,000
5,399,000
602,000
571,000
361,000
127,000
0
124,000
2,000
51,000
16,000
11,000
8,000
,_.- - 0
7,272,000
$16,423,000
15,224,000
1,184,000
474,000
1,056,000
349.000
96,000
327,000
100,000
54,000
17,110,000
~
r.J)
-.....
~
~
eo
u
Total
Salaries Paid for Time Worked (Note 13)
Career Advancemt'nt (Note 20)
Vacation and Holidays
Health and Life Insurance
Sick Leave
. Retirement Income Plan
\01004
Parking
':u Tuition Reimbursement
(j) Food Service (Note 21)
Quality of Work Space (Note 22)
Child Care
Credit Union
Recreation Center
Total
Value of Contract I~esearch(Note 28)
Professional Staff Overtime Worked But Not Paid
(Note29).
iQJ State
Federal Taxes Paid By Company
and Federal Tax Worth of Net Jobs
o
......
£
Created (Note 30)
State Taxes Paid ByCompany
Contribution to Knowledge (Note 31)
Total
LocalTaxes Paid by Company
§ Local Tax Worth of Net Jobs Created
E. Environmentallmprovements
E
Reduced Parking Area (Note 35)
o
U
_ Tota)
Total
48
13Q,OOO
60,000
$18,367,000
$
63,000
52,000
18,000
78,000
16,000
36,000
29,000
159,000
133,000
$44,133,000
40,104,000
$
o
Costs
Salaries Paid (Exclusiveof Training (Note 13)
Investment and Fringe Benefits) (Note 14)
Training Investment in Staff
Direct Contract Cost
Overhead/General Administrative Expenditures
Not Itemized
Vacation and Holidays
Improvements, Space and Environment (Note 15)
Federal Taxes Paid (Note 16)
State Taxes Paid (Note 16)
LocalTaxes Paid (Note 16)
Health and Life Insurance
Sick Leave
Food Service
-Child Care
Tuition Reimbursement
Miscellaneous and Public Offering of Stock
Interest Payments (Note 17)
Income Foregone on Paid in Capital (Note 18)
Opportunity Cost of Total Time Worked (Note 23)
Absence of Retirement Income Plan (Note 24)
Layoffsand Involuntary Tetminations (Note 25)
Inequality of Opportunity (Note 26)
Uncompensated Losses Through Theft
Reduced Parking Area (Note 27)
Cost of Contract Work to Client (Note 32)
Federal Services Consumed (Note 33)
State Services Consumed (Note 33)
Environmental Resources Used Through Pollution:
(Note 34)
Electricity
Commuting
Paper
LocalServices Consumed
1974
1973
$ 5,296,000
935,000
5,529,000
4,319,000
1,080,000
5,5%,000
1,860,000
719,000
137,000
474,000
130,000
78,000
256,000
185,000
67,000
18,000
15,000
0
197,000
265,000
$16,161,000
1,649,000
571,000
384,000
349,000
100,000
63,000
201,000
127,000
51,000
11,000
2,000
154,000
171,000
276,000
15,104,000
$ 7,540,000
1,000
77,000
1,000
1,000
29,000
6,455,000
58,000
31,000
11,000
1,000
0
$ 7,649,000
656,ooo
$16,423,000
262,000
104,000
15,224,000
195,000
8OJ)00
37,000
21,000
7,000
$16,854,000
$
40,000
35,000
17,000
6,000
15,557,000
Net Benefits
1974
1973
733,000
485,000
1,064,000
716,600
1,513,000 153,OOO
32,000
-
40,000
32,000
119,000
$40,704,000
37,249,000
$3,429,000
2,855,0
101,000
49
EXHIBIT 2-4 (Continued)
.
U1
=
Notes to Social Audit Statements'
a direct economic benefit and paYJIlent to
the company.
For more details on the calculations see
the notes on the 1973 Social Audit in
Abt Associates 1973 Annual Report, or
write the company for detailed notes on
how the ,.social Audit values were determined.
1. Social assets are resources which
promise to provide future social or economic benefits, and are a social asset to
the company valued at their present
worth.
2. Staff available within one year
are staff immediately available tQ
provide research and evaluation services,
estimated to be $7,555,000 for 1974
based on q discount. rate of .9715 and a
mean staff tenure of 2.95 years. For
1973, staff. assets were valued at
$6,384,000 based on a discount rate of
.9604 and a mean staff tenure of 3.8
years.
3. Staff available after one year is
estimated. to be $14,895,000 for 1974
based on a discount rate of 1.915 and a
mean staff tenure of 2.95 years. For
1973, staff assets after one year were
based on a discount rate of 2.296 and a
mean staff tenure of 3.8 years.
4. Training investment in staff is a
social asset that promises to provide
present and future benefits. The 1974
staff survey indicated that company staff
spent an average 15 percent of their time
in training, decreasing from a high of 25
'.
.
11. Federal
services consumed
by
the company are a social benefit to the
company and the stockholders because
the federal services contributed to the
operations.
12. Environmental
resources creating pollution are a social benefit to the
company and the stockholders because
the company earns economic benefits by
production processes cr.eating socially
undesirable
environmental
effects
without paying for them.
13. Salaries paid exclusive of training inve$tment and fringe benefits
are a social cost to the company and
stockholders because payment for -staff
services reduces available company
funds, and once spent for staff services
these funds cannot be used again for
other services.
14. Training investment in staff is a
social cost to the company and stock)
holders which results in a loss of staff
time during- training and a loss of funds
paid to staff during training time when
the staff was non-productive.
15. Improvements,
space and environment expenditures are a social and
economic cost to the company and stockholders because money spent on building
maintenance is not available for other
uses by the company.
16. Federal, State, and Local taxes
paid by the company are a social and
economic cost to the company and stock-
,
Only four eligible staff who terminated
early in the year experienced any social
cost as a result of plan absence when
they left.
25. Layoffs and involuntary terminations is a social' cost to the staff. A
survey was taken of the 72 terminees
that showed that 45 percent of terminees
were still unemployed after 60 days.
Social cost is estimated, to be one
month's salary for the 40 terminees who
found employment within' 60 days and
two months' salary for the 32 terminees
who found employment after 60 days.
26. Inequality of opportunity
is. a
social cost to the staff and is defined in
terms of the costs to individuals of the
income loss equal to the difference
between what the minority or female individual earns and what a non-minority
or male individual doing the same job
with the same qualifications earns.
27. Reduced parking area is a social
cost to the staff in the Cambridge office
that drive automobiles.. The company
reduced the number of parking spaces by
80 in order to comply with Environmental Protection Agency req uirements
that all companies in the area reduce
their parking areas.
28. Value of co'ntract research as a
social benefit
is assumed to be
whatever is paid for. the service~since it
was purchased on the open market.
29. Staff overtime worked but not
paid is a social benefit to society and the
client and constitutes an Hinvisible sub.
pei.{:ent h\"e years ago to i 0 percent this
year.
Accum ulated train ing obsolescence
is a reduction in total training based on
a straightline depreciation of training investment over the mean staff tenure.
S. Creation and developme.nt of organization is an organizational .asset
equated to the replacement cost of paidin capital computed by weighing the
capital stock account from 1965 to the
present by the deflator for Gross Private
Fixed Investment.
.
6. Public services paid by taxes but
not consumed by the company are
social assets to the general public' and
the community. When the company
consumes fewer public servi~es than paid
by taxes, a net social asset is prod uced.
7. Social liabilities are sources of future ,economic or social cost and are
valued at their present economic worth.
S. Staff wages payable are a .liability
contingent upon future utilization of
staff on contract or administrative tasks.
This amount does not constitute a liability in the legal sense but it does show
expected future liability to pay staff as
they provide future services.
9. Organizational
financing
requirements cost is equated to the difference between mean borrowing during
the year and year-end borrowing which
was $1,056,000 for 1974, compared to
$563,000 for 1973.
.
Ut
...
10. Contract revenue and other income is a social benefit to the company
and the stockholders because it results in
Source: Abt Associates Inc. Annual Report
holders because tax paymen'ts reduce the
amount of money available for other
uses.
17. Interest payments are a social and
economic cost to the company and stockholders because the amount spent to borrow money cannot be expensed to
contract work and therefore is a loss and
cannot be used for other purposes.
18. Income foregone
on paid-in
capital is a social and economic cost to
the stockholders because of having paidin capital tied-up in the company.
19. Sal.aries paid to staff for time
worked is a social benefit to the staff
members because it results in a direct
economic benefit in payment for their
contribution to company operations.
20. Career advancement is a social
benefit to the staff because of the added
earning power from salary increases for
merit or promotion.
21. Food service subsidy by the company is a social benefit to the staff because it increases the q~ality of food
served to the staff on the premises above
that commercially' available for the same
prices.
22. Quality of work space is a social
benefit to the staff created by the above
average office space provided employees.
23.. Qpportunity
cost of total time
wOJ;ked is a social cost to staff because it
-represents time given up while working
for the company.
24. Absence of retirement plan is a
social cost to the staff for 1973. In 1974
a retirement plan was implemented.
sidi' by the company professional staff
"that results in a higher quality of
services. The t 974 staff survey showed a
decrease of overtime to 19% of regular
working hours from' 20% in 1973 and
33% in 1972.
30. State and federal tax worth of
net jobs created are a social benefit to
the general public because each new job
will create additional tax revenue for the
state and federal government. Expansion
of the company has created 67 new jobs
in Cambridge.
31. Contribution
to knowledge is a
social benefit to the general public because publications by the company staff
constitute additions to the stock of
knowledge.
32. Cost of contract research is a
sociql cost to the client and the general
public because payment for research
comes from state and federal governments which reduces the amount of
money available for other uses.
33. Federal
'.and state services
consumed
are a social cost to the
general public and society from the company's use of public services.
34. Environmental resources used
through pollution are a social cost to
the general public and society caused by
socially undesirable effects of production
that are not paid for by the company.
35. Reduced parking areas is a social
benefit to the local' community resulting
in less pollution and traffic on the
highway.
+ Social Audit 1974. Used by permission.