The directors knew, and had decided privately, among themselves, that the Preference dividend would not be paid. But on the day when the normally quite formal announcement of the Preference dividend was due, it so happened that the directors were scattered far and wide. Then, however, the directors were faced with the choice of going ahead with their original stringent plans for valuing stocks and work in progress and showing the Preference dividend unearned, or of following a more optimistic valuation and showing sufficient profits to cover the dividend. But the author mentions the case to show why the financial journalists are sometimes a little cynical about company accounts. A word or two about over-trading. A company may well be showing bumper profits through over-trading. This is not always easy to spot from the accounts, but if there are signs of unwieldy stocks, work in progress, debtors and creditors, combined with a deficiency of quick assets.