How does your local co-op rate?

Rural Cooperatives, Nov-Dec, 2004 by Beverly L. Rotan

Another year has come and gone with some of the larger regional supply cooperatives no longer in business. How did this affect your local cooperative?

Many local cooperatives that would have had positive net incomes had negative net incomes due to loss on disposal of investments. Has your cooperative flared better, about the same or lower compared to cooperatives with similar functions and factors, including sales, product mix, etc.?

Comparisons with other cooperatives may help to determine whether your cooperative is doing well or poorly. The following tables can help you make industry trend and norm comparisons.

The tables shown here contain average financial data compiled from a survey of 287 cooperatives for 2002 and 2003. Fill in the blanks and compare these benchmarks with your cooperative's financial data.

So how's your cooperative doing?

Compare your farm supply cooperative (1) with averages for
cooperatives with similar functions.

                                                     Size (2002) (2,3)

Measure/Item                       Unit      Small   Medium     Large

Sell farm supplies only         Number       68      36        31
Total assets                    Mil. dol.    1.8     4.2       8.0
Long-term debt                  Thou. dol.   106.2   382.0     649.5
Total liabilities               Thou. dol.   540.4   1,504.8   3,014.9
Total sales                     Mil. dol.    2.7     6.9       13.1
Total service revenue           Thou. dol.   64.1    239.8     207.4
Total revenue                   Mil. dol.    2.8     7.4       13.6
Net income (losses)             Thou. dol.   64.8    196.8     353.0
Labor of total expenses         Percent      55      51        54
Patronage refunds received      Thou. dol.   37.9    105.1     207.4
Liquidity ratios
  Current                       Ratio        2.00    1.60      1.42
  Quick                         Ratio        0.98    0.88      0.81
Leverage ratios
  Debt                          Ratio        0.29    0.36      0.38
  Debt-to-equity                Ratio        0.41    0.56      0.60
  Times interest earned         Ratio        5.45    5.96      6.25
Activity ratios
  Fixed asset turnover          Ratio        7.19    6.51      5.90
  Total asset turnover          Ratio        1.47    1.66      1.64
Profitability ratio
  Gross profit margins          Percent      18.32   16.46     19.12
  Return on total assets
    before interest and taxes   Percent      4.55    6.02      5.71
  Return on total equity        Percent      6.77    9.76      9.57

                                                  Size (2002) (2,3)

Measure/Item                     Super    Small   Medium     Large

Sell farm supplies only         9         68      36        31
Total assets                    14.3      2.0     4.1       8.1
Long-term debt                  2,087.5   126.2   330.0     602.2
Total liabilities               6,019.8   586.3   1,423.5   3,347.3
Total sales                     25.9      2.8     7.0       13.9
Total service revenue           478.1     77.1    170.5     382.9
Total revenue                   26.8      2.9     7.2       14.5
Net income (losses)             261.9     22.8    106.3     311.1
Labor of total expenses         53        55      53        53
Patronage refunds received      417.1     1.4     32.5      89.4
Liquidity ratios
  Current                       1.40      2.07    1.56      1.37
  Quick                         0.58      0.99    0.81      0.71
Leverage ratios
  Debt                          0.42      0.30    0.35      0.41
  Debt-to-equity                0.72      0.42    0.53      0.70
  Times interest earned         2.34      2.51    3.81      5.49
Activity ratios
  Fixed asset turnover          6.16      6.81    6.60      6.34
  Total asset turnover          1.80      1.43    1.70      1.71
Profitability ratio
  Gross profit margins          16.94     17.66   16.31     17.39
  Return on total assets
    before interest and taxes   3.60      1.90    3.70      4.98
  Return on total equity        4.16      2.27    5.23      9.05

                                             Your
Measure/Item                     Super    cooperative

Sell farm supplies only         9             --
Total assets                    15.6          --
Long-term debt                  1,675.3       --
Total liabilities               6,199.4       --
Total sales                     28.2          --
Total service revenue           774.8         --
Total revenue                   30.0          --
Net income (losses)             803.6         --
Labor of total expenses         53            --
Patronage refunds received      344.3         --
Liquidity ratios
  Current                       1.37          --
  Quick                         0.61          --
Leverage ratios
  Debt                          0.40          --
  Debt-to-equity                0.66          --
  Times interest earned         5.10          --
Activity ratios
  Fixed asset turnover          6.81          --
  Total asset turnover          1.81          --
Profitability ratio
  Gross profit margins          17.00         --
  Return on total assets
    before interest and taxes   7.40          --
  Return on total equity        11.58         --

(1) 100 percent of sales were generated from farm supply
sales.

(2) Small = Sales are $5 million or less; medium = over $5
million to $10 million; large = over $10 million to $20
million; and super = over $20 million.

(3) There were 287 cooperatives surveyed in both years.