Financial Characteristics of Wisconsin Farm Supply Cooperatives, 1966-1977
By W.A. Dahl, Director of the Bureau of Economics and Market
Development, Marketing Division, Wisconsin Department of Agriculture, Trade
and Consumer Protection; he was an assistant Professor in the Department
of Agricultural Economics at the University of Wisconsin-River Falls when
this study was conducted.
W.D. Dobson, Professor and Chairman, Department of Agricultural
Economics, University of Wisconsin, Madison.
D.H. Veium, Graduate Assistant in the Department of Agricultural
Economics, University of Wisconsin, Madison at the time the study was conducted.
UWCC Occasional Paper No. 4 - December, 1980
Financial support for this research was provided by UW-Madison and UW-River Falls Cooperative Research Project 027 and Hatch Project 1975. The assistance of boards of directors and managers of Wisconsin farm supply cooperatives in providing data for this study is gratefully acknowledged. Helpful comments on the manuscript were obtained from Professor Frank Groves, Director of the University Center for Cooperatives, and Dr. Thomas Paterson.
Summary
This paper contains benchmark figures which farmer-members, boards of directors and managers of Wisconsin farm supply cooperatives can employ to evaluate the performance of their cooperatives. The paper also identifies trends in the financial data generated by Wisconsin farm supply cooperatives during 1966-1977. Some trends and implications of the trends for management of the cooperatives are as follows:
(1) Sales became more concentrated
in the hands of the larger Wisconsin farm supply cooperatives during 1966-1977.
Group 4 cooperatives (firms with annual sales of $3.0 million or more)
accounted for 49% of the sales made by all Wisconsin farm supply cooperatives
in 1977, up from 44% in 1966. The percentage of sales accounted for by
the smallest Group 1 cooperatives (firms with annual sales of less than
$1.0 million) declined from 10% of the total in 1966 to 7% of the total
in 1977.
(2) Wisconsin farm supply cooperatives
generally recorded real increases in assets, net worth, sales, and net
savings during 1966-1977. However, the real (deflated to remove
the effects of inflation) growth of these variables was substantially lower
than the nominal (not adjusted to eliminate effects of inflation) growth.
This underscores the need for management to examine real growth figures
to obtain a less distorted picture of the growth of their cooperatives.
(3) Fixed assets of the average Wisconsin
farm supply cooperative declined from 29% of total assets in 1966 to 23%
of total assets in 1977. The average Group 1 cooperative actually recorded
a decline in real fixed assets during 1966-1977. This reduction in investment
in fixed facilities suggests that the cooperatives may need to embark on
new investment programs if they are to remain competitive and develop the
capacity needed to make further real increases in sales.
(4) Wisconsin farm supply cooperatives
replaced a substantial amount of equity capital with short-term debt during
1966-1977. This change presumably was welcomed by farmer-members who need
capital for their farm businesses. However, short-term debt may be an expensive
replacement for the equity capital.
(5) Smaller Wisconsin farm supply
cooperatives, in particular, have larger than average percentages of their
current assets tied up in accounts receivable. Moreover, these smaller
firms also had the highest accounts receivable delinquency ratios and bad
debt losses during 1973-1977. The accounts receivable delinquency ratios
of the larger cooperatives increased during 1973-1977. These results suggest
that managers of all Wisconsin farm supply cooperatives may need to carefully
monitor their accounts receivable.
(6) Wisconsin farm supply cooperatives
used less debt capital than other farm supply firms located throughout
the U.S. during 1966-1977. The smaller cooperatives, in particular, might
generate greater net savings if they increased use of financial leverage.
(7) Except for the largest cooperatives,
the net sales/working capital ratios of Wisconsin farm supply cooperatives
were less than those for other farm supply businesses in the U.S. during
1966-1977. Managers of small and medium-sized cooperatives might increase
net savings if they obtained a more rapid rate of working capital turnover.
(8) The smaller farm supply cooperatives
get a relatively large share of their savings in the form of patronage
refunds from other cooperatives, chiefly affiliated regional cooperatives.
This development may limit the decision making capacity of the smaller
cooperatives.
(9) The larger Wisconsin farm supply
cooperatives generally recorded strong financial performances during 1966-1977.
However, the market share figures, asset share figures, efficiency ratios,
real asset growth figures and other figures all suggest that the smaller
Group 1 cooperatives are not doing as well financially as the larger firms.
This may foreshadow problems for the smaller cooperatives in the years
ahead. It also may call for changes in management strategies for these
firms, perhaps including mergers with the larger farm supply cooperatives.
Introduction
This paper contains figures describing the financial characteristics of Wisconsin farm supply cooperatives for 1966-1977. The main objective of the paper is to present benchmark figures which members, managers and directors of cooperatives could employ to assess the performance of their cooperatives and identify areas within their cooperatives which may require attention. The paper also gives management of the cooperatives and researchers information needed to review trends which have affected Wisconsin farm supply cooperatives in recent years.Limitations regarding the usefulness of the figures should be recognized. First, the averages reported in the paper conceal variation in the financial figures for individual cooperatives. To a degree, this problem was corrected in the study by grouping the cooperatives into different size categories on the basis of sales. Secondly, the averages appearing in the paper do not necessarily define an optimally-run firm. Consequently, a cooperative which generated financial figures similar to the average for firms in its size category may not have employed optimal or near optimal financial management practices. Therefore, cooperatives desiring a more complete reading on their financial performance might compare their financial figures to the averages appearing in the paper for other firm size categories, the all cooperative averages, the Robert Morris Associates figures as well as the averages for the group to which they belong.1 Finally, figures such as those appearing ln the paper become dated. Thus, they will not reflect the effects on the cooperatives of recent developments such as the high interest rates of early 1980.
This study relies upon information drawn from the population of Wisconsin farm supply cooperatives. For purposes of the study, a farm supply cooperative was defined as a firm with 50 percent or more of its sales in one or more of the following products: livestock feed, seed, fertilizer, hardware items, bulk gasoline, and petroleum products. The classification system employed in the study placed cooperatives with annual sales of less than $1.0 million in Group 1, those with annual sales of $1.0 to $2.0 million in Group 2, those with annual sales of $2.0 million to $3.0 million in Group 3, and those with sales of more than $3.0 million in Group 4.
A cooperative was assigned to a particular group based upon average annual sales from 1966 to 1972 and from 1973 to 1977. For example, if a cooperative's yearly sales averaged $2.0 to S3.0 million during 1966-1972 it was placed in Group 3 for this period; if the cooperative's average annual sales increased to more than $3.0 million for 1973-1977, it was classified in Group 4 for all years in the latter period. It should be recognized that since the sales figures used for classifying the firms were in nominal (unadjusted for inflation) terms, an upward bias regarding classification of the firms into the different groups may have occurred.
That is, firms placed in Group 3 for 1966-1972 may have been reclassified into group 4 for 1973-1977 sorely because they sold the same quantity of products for higher prices. This possible bias should be kept in mind when comparing figures for the different size classifications.
The tables which follow have been arranged to permit a systematic review of the basic accounting and financial information for the cooperatives. In particular:
I. Changes in the number, sales and assets of Wisconsin farm supply cooperatives during 1966-1977 are described in Tables 1 and 2.Many of the tables are self-explanatory. However, brief descriptions and interpretations of figures in the tables appear in the remainder of the paper.II. Nominal (unadjusted for inflation) and real (adjusted to remove effects of inflation) balance sheets and operating statements for the average Wisconsin farm supply cooperatives for 1966 and 1977 appear in Tables 3 and 4. Nominal and real figures for 1966 and 1977 which were extracted from the balance sheets and operating statements for average cooperatives in the different size categories are included in Tables 5 and 6.
III. Information relating to the current assets of Wisconsin farm supply cooperatives appears in Tables 7 through 13. These tables contain figures describing changes in accounts receivable, aging schedules for accounts receivable and bad debt losses for the cooperatives.
IV. Solvency ratios for Wisconsin farm supply cooperatives for 1966 through 1977 are listed in Table 12.
V. Efficiency ratios for Wisconsin farm supply cooperatives (sales to working capital and saving to sales ratios) appear in Tables 13 and 14.
VI. Profitability ratios for the Wisconsin farm supply cooperatives, including figures describing returns on assets, net savings, investment and patronage refunds, appear in Tables 15 and 16.
I. Changes in the Size, Number, Sales and Assets of Wisconsin Farm Supply Cooperatives, 1966-1977
The number of Wisconsin farm supply cooperatives declined from 189 in 1966 to 169 in 1977, an 11% decrease (Table 1). This can be partially accounted for by the bankruptcy of two cooperatives and the change in sales specialities which caused 17 of the firms to no longer fit the definition of a farm supply cooperative used in this study. The majority of the firms which no longer met the definition of a farm supply business were smaller Group 1 and Group 2 cooperatives. Of the larger cooperatives which no longer met the definition, a few changed their specialty to some aspect of dairy product marketing or processing.Table 1. Number of Wisconsin Farm Supply Cooperatives in Sales Groups 1, 2, 3 and 4
Number of Cooperatives in Size Group Group Annual Sales 1966 Percent 1977 Percent 1 Less than $1,000,000 49 25.93 34 20.12 2 $1,000,000 to $2,000,000 58 30.69 55 32.54 3 $2,000,000 to $3,000,000 41 21.69 40 23.67 4 More than $3,000,000 41 21.69 40 23.67 ---------------------------------------------------------------- Total 189 100.00 169 100.00
The larger cooperatives increased their share of the total sales and assets of Wisconsin farm supply cooperatives during 1966-1977 (Table 2). Group 4 cooperatives, for example, accounted for 49% of the sales in 1977 (up from 441 in 1966) and accounted for 46. of the total assets in 1977 (up from 39% in 1966). The percentage of sales and assets accounted for by the Group 1 firms declined from about 10% in 1966 to 7% in 1977. The decline in the percentage of sales and assets accounted for by the smaller Group 1 cooperatives reflects the fact that some of these firms lost business, some went bankrupt, others left the farm supply business to begin other specialities and others moved into larger size categories. The share of sales of the intermediate-size Group 2 and Group 3 cooperatives remained fairly constant during 1966-1977, but their share of the assets declined 2% to 3%.
Table 2: Percent of Total Sales and Total Assets
Accounted for by Cooperatives in Sales Groups 1, 2, 3 and 4
Percent of Total Percent of Total Sales Assets Cooperative 1966 1977 1966 1977 Group 1 9.74 6.81 9.15 6.61 2 17.33 16.56 19.37 17.53 3 28.89 27.68 32.40 29.76 4 44.04 48.95 39.08 46.10 ------------------------------------------------------- Total 100.00 100.00 100.00 100.00
II. Financial Statements for Average Wisconsin Farm Supply Cooperatives, 1966
Both nominal and real values are represented in the financial figures for the cooperatives appearing in Tables 3 and 4. The distinction between nominal and real values is made to account for the possibility that a cooperative could exhibit apparent (nominal) growth as reflected by changes in its financial statements; however, when the effects of inflation are accounted for, its actual (real) condition may have changed little, not at all, or worsened between the periods compared. In the study, nominal figures were deflated by the Consumer Price Index (CPI)2 and converted to real figures. The real values should provide a less distorted picture of growth in the cooperatives. Tables 5, 6 and 7 elaborate on changes in the nominal and real financial condition of the cooperatives.Real vs. Nominal Changes in Balance Sheet Items.
The figures in Table 3 show the contribution of inflation to changes
in the balance sheet. For example, nominal current assets of the average
cooperative increased from $206,054 in 1966 to $843,527 in 1977 (309%).
Real current assets, on the other hand, increased only from $211,990 in
1966 to $464,699 in 1977 (119%). Nominal current liabilities of the average
fa rm supply cooperative increased from $93,641 in 1966 to $494,667 in
1977 (428%); the average cooperative's real current liabilities increased
from $96,338 in 1966 to $272,512 in 1977 (183%). Note that real current
liabilities increased by more than real current assets. This phenomenon
appears to be related to increased use of short-term debt by the cooperatives
and a corresponding reduction in working capital (current assets minus
current liabilities).
Changes in Assets.
Current assets for the average Wisconsin farm supply cooperative increased
from 43% of total assets in 1966 to 53% of total assets in 1977 (Table
3). This increase presumably reflects increases in cash required to conduct
business and increases in accounts receivable. Additional. cash generally
is required to deal with higher real sales and inflation, while higher
levels for accounts receivable also may reflect the effects of increased
sales and problems with collections.
Fixed assets for the average cooperative declined from 29% of total assets in 1966 to 23% of total assets in 1977 (Table 3). In 1977, fixed assets as a percentage of total assets were largest (25%) for the Group 4 cooperatives and smallest (20%) for the Group 1 cooperatives. However, fixed assets as a per- centage of all assets declined substantially from 1966-1977 -- even for the Group 4 cooperatives (from 32% to 25%). The reduction in investment in fixed facilities is not unique to Wisconsin farm supply cooperatives. According to Brown, this phenomenon is occurring in much of U.S. industry.3 Nonetheless, it suggests that Wisconsin farm supply cooperatives may need to embark on new programs of investment in plant and equipment to remain competitive and develop the capacity to further increase sales.
Table 3: Nominal and Real Balance Sheets for the Average Wisconsin Fanm Supply Cooperative, 1966 and 1977.
| Balance Sheet Item | Balance Sheet for 1966 | % of Assets or Liability & Equity | Balance Sheet for 1977 | % of Assets or Liability & Equity |
| Nominal Balance Sheet | ||||
|
|
|
|
|
| Real Balance Sheet (1967=100) | ||||
|
|
|
|
|
Changes in Liabilities and Equitles.
Current liabilities for the average cooperative increased from 20%
of total liabilities and equity in 1966 to 31% of liabilities and equity
in 1977 (Table 3). The contribution of member equity for the average cooperative
declined from 7t. of total liabilities and equity in 1966 to 59% of total
liabilities and equity in 1977. Since the share of liabilities and equity
accounted for by long-tenm debt remained almost constant during 1966-1977,
the average cooperative apparently replaced a substantial amount of equity
capital (long a dominant source of capital) with short-term debt.
The larger Group 4 cooperatives have proceeded farthest with the substitution of other sources of capital for member equity. For example, member equity capital comprised 67% of total liabilities and equity for the average Group 4 cooperative in 1966. Equity as a percentage of total liabilities and equity for the average Group 4 cooperative declined to 54% in 1977. This was 6 percentage points lower than the contribution of member equity to total liabilities and equity for the average Wisconsin farm supply cooperative in 1977.
Dahl and Dobson suggested that Wisconsin fanm supply cooperatives might reduce the financial sacrifices (opportunity costs) of farmer-members if they made less use of equity capital. 4 However, the Dahl-Dobson prescription called for Wisconsin fanm supply cooperatives to replace member equity with long-term debt which is generally less costly than short-term debt. Why the average farm supply cooperative increased use of short-term debt is uncertain. Since this choice could increase capital costs for the cooperatives, it may warrant the attention of management.
Table 4: Nominal and Real Operating Statements for the Average Wisconsin Farm Supply Cooperative, 1966 and 1977
1967 = 100 Operating Operating Operating Statement Statement % of Statement % of Item for 1966 Net Sales for 1977 Net Sales Nominal Operating Statement Net Sales $789,952 100.0 $2,938,665 100.0 Cost of Goods Sold 637,164 80.7 2,435,485 82.9 GROSS MARGIN 152,788 19.3 503,180 17.1 Patronage Refunds Received 14,504 1.8 74,400 2.5 Other Income or (Expense) (852) -* 7,432 0.3 GROSS OPERATING MARGIN 166,440 21.1 585,012 19.9 Operating Expense 134,381 17.0 454,851 15.5 NET SAVINGS 32,059 4.1 130,161 4.4 Real Operating Statement Net Sales $812,708 100.0 $1,618,911 100.0 Cost of Goods Sold 655,519 80.7 1,341,709 82.9 GROSS MARGIN 157,189 19.3 277,202 17.1 Patronage Refunds Received 14,922 1.8 40,987 2.5 Other Income or (Expense) (876) -* 4,094 0.3 GROSS OPERATING MARGIN 171,235 21.1 322,283 19.9 Operating Expense 138,252 17.0 250,577 15.5 NET SAVINGS 32,983 4.1 71,706 4.4 --------------------------------------------------------------- -* Less than .1
Changes in the Operating Statements.
The operating statements for 1966 and 1977 fail to reveal the major changes that were evident in the balance sheets for these two years. Thus, many items in the operating statement for the average cooperative in 1977 differed by only one or two percentage points from the comparable figures for 1966 (Table 4). Moreover, offsetting changes involving cost of goods sold, patronage refunds, and operating expenses (expressed as a percentage of net sales) kept net savings for the average cooperative in 1977 near the 1966 level. Of course, nominal values of the variables in- creased substantially from 1966 to 1977. Nominal operating expenses, for example, increased from $134,381 in 1966 to $454,851 in 1977 (238%). However, the real increase in operating expenses was a smaller 81% during this period. The comparison underscores the importance of examining both real and nominal values to gain a more complete picture of financial changes.
Nominal and Real Growth Figures Extracted from Financial Statements.
Nominal and real financial growth figures extracted from the balance
sheets and operating statements for average cooperatives appear in Tables
5 and 6. In general, the smaller cooperatives (especially those in Group
1) exhibited slower growth in nominal assets, net worth, total sales, and
net savings than the average Wisconsin farm supply cooperative (Table 5).
The average growth in nominal fixed assets, total assets, net worth, sales,
and net savings during 1966-1977 for the average Group 1 cooperative was
100 percentage points lower than the all- cooperative average; the comparable
figure for the average Group 2 cooperative was 43 percentage points lower
than the all cooperative average. The largest cooperatives recorded the
highest rates of nominal growth, with the Group 4 cooperative exhibiting
the highest average growth for every variable except net savings (Table
5). The Group 3 cooperative obtained the highest rate of growth in net
savings (320%) during 1966-1977.
Table 5: Nominal Financial Growth Characteristics for Average Wisconsin Farm Supply Cooperatives, 1966 and 1977
Cooperative Fixed Total Net Total Net Group and Year Assets Assets Worth Sales Savings Group 1 l966 $ 46,211 $ 182,925 $ 129,511 $ 325,150 $ 3,034 1977 83,865 420,602 276,043 803,427 26,185 Percent Change 1966-77 +82% +130% +113% +147% +190% Group 2 1966 $lO5,9l9 $ 387,344 $ 295,128 $ 578,588 $ 25,322 1977 249,351 1,115,788 697,320 1,954,220 87,l50 Percent Change 1966-77 +135% +188% +145% +238% +244% Group 3 1966 $170,625 $ 647,830 $ 482,103 $ 964,451 $ 42,356 1977 402,570 1,894,279 1,223,534 3,267,706 178,061 Percent Change 1966-77 +136% +192% +154% +239% +320% Group 4 1966 $251,548 $ 781,470 $ 523,751 $1,469,950 $ 58,809 1977 744,855 2,933,993 1,574,674 5,778,187 229,782 Percent Change 1966-77 +196% +275% +201% +293% +261% Weighted Average for all Cooperatives 1966 $136,067 $ 476,352 $ 339,277 $ 789,952 $ 32,059 1977 369,606 1,590,531 944,773 2,938,665 130,061 Percent Change 1966-77 +172% +234% +178% +272% +306%
The average cooperative in the four size groups recorded real increases in net worth, sales, net savings and assets during 1966-1977, which were substantially lower than the nominal growth rates (Table 6). For example, the nominal sales of the average cooperative increased 272%. from 1966-1977, while the real growth in sales for the average cooperative was 99%. during this period. The larger Group 3 and Group 4 cooperatives also exhibited the highest rates of real growth. The Group 4 cooperatives obtained the highest rates of real growth for all variables except real savings. The Group 3 ccoperative had the highest rate of growth in real net savings (125%) during 1966-1977. The only negative srowth figure recorded was real fixed assets for the Group 1 cooperative, which declined 3% during the 1966-1977 period.
Table 6: Percentage Change in Nominal and Real Net Worth, Total Sales, Net Savings, Total Assets, and Fixed Assets from 1966-77 for Average Wisconsin Farm Supply Cooperatives
Percent Change from 1966 through 1977 in: Cooperative Fixed Total Net Total Net Group Assets Assets Worth Sales Savings Nominal/Real Nominal/Real Nomina/Real Nominal/Real Nominal/Real Group 1 +82 - 3 +130 +23 +113 +14 +147 +32 +190 +55 Group 2 +135 +26 +188 +54 +145 +31 +238 +81 +244 +84 Group 3 +136 +26 +192 +57 +154 +36 +239 +81 +320 +125 Group 4 +196 +59 +275 +101 +201 +61 +293 +110 +291 +109 Weighted Average for All Cooperatives +172 +46 +234 +79 +178 +49 +272 +99 +306 +177
III. Current Assets. Liquidity Ratios and Accounts Receivable for Wisconsin Fanm Supply Cooperatives, Selected Years 1966-1977.
Current assets are generally defined as those assets of the fi rm which are expected to be converted into cash within one year. Included in this asset category are cash, marketable securities, accounts receivable, and inventories. Liquidity refers to the ability of the firm to meet its maturing short- tenm obligations. This section addresses this aspect of financial management, with emphasis on accounts receivable and credit policies.Current Ratios.
The current ratios given in Table 7 are defined as the ratio of current
assets to current liabilities. It is a generally accepted measure of liquidity
since it indicates the extent to which the claims of short-term creditors
are covered by assets that are expected to be converted into cash in a
period roughly corresponding to the maturity of the claims. A current ratio
of 1.8, for example, means that for each dollar of current liabilities,
current assets of S1.80 will be available to satisfy short-term obligations.
Smith and Cooper5 and Gries and Torgerson The average cooperative in each size category generally maintained a
current ratio above 2:1 until 1969 or 1970 (Table 7). Then, except for
those of the smaller Group 1 cooperatives, the current ratios declined
to the 1.60 to 1.80 range. The reduction in the current ratios paralleled
a decline in this ratio for the Robert Morris Associates firms (Table 7).
The general decline in liquidity recorded by the Wisconsin cooperatives
and the Robert Morris firms may reflect a desire on the part of managers
to avoid sacrifices in earnings and growth associated with excessive liquidity.
The average current ratio maintained by cooperatives in the different
size groups varied Inversely with the size of cooperatives (Table 7). For
example, the average cooperative in Group l recorded a 2.05 current ratio
in 1977, while the larger Group 4 cooperative recorded a l.59 current ratio
for the same year. The current ratios recorded by the Group I and Group
4 cooperatives raise questions: Are the Group 1 cooperatives sacrificing
earning opportunities by maintaining excessive liquidity? Are problems
with inadequate liquidity likely to arise for Group 4 cooperatives, especially
for those with below average liquidity?
A measure commonly used to identify a firm's credit policy is given
in Table 8 by the ratio of accounts receivable to current assets. This
ratio evaluates the proportion of current assets tied up in receivables.
A relatively high ratio identifies a credit policy which may need to be
more strict, whereas a low ratio may suggest that a firm is sacrificing
profitable sales by maintaining a credit policy which is too strict. Gries
and Torgerson recommend as a guideline that this ratio should never exceed
40 percent.7
The figures in Table 9 illustrate whether the rate of growth in accounts
receivable was equal to, in excess of, or less than the rate of growth
in sales for the average cooperatives. In the study, sales equaled actual
sales less discounts and returned purchases. While this is useful for comparing
how accounts receivable and sales expand, it should be recognized that
a strict cause and effect relationship is not implied. This is because
sales can increase in response to liberalizing credit terms or to other
factors. Similarly, the growth in accounts receivable may reflect a change
in policy or may be a result of expanded sales.
For 1974, accounts receivable did not grow as rapidly as sales for the
farm supply cooperatives. For 1975-1977, however, results are mixed. During
1975, the increase in accounts receivable occurred at a faster rate than
sales with the exception of smaller Group 2 cooperatives. The rate of increase
in receivables continued to exceed the rate of increase in sales for all
cooperative groups in 1976. By 1977, the smaller cooperatives in Groups
1 and 2 reduced the growth rate for accounts receivable below that of sales,
while the larger firms in Groups 3 and 4 continued a rate of increase in
accounts receivable in excess of sales growth. It appears that a buildup
in accounts receivable was developing for the larger cooperatives during
1975-1977. In order to determine the seriousness of this condition, the
rate of delinquency and bad debt losses for the cooperatives were examined.
Bad Debt Losses.
Gries and Torgerson suggest that a .8 to 1.0 debt to equity ratio may
be an appropriate target for farm supply cooperatives.9
When this ratio exceeds 1.0 the firm's equity capital may be reaching levels
which are too small to protect creditors from losses. On the other hand,
a relatively low value spells little risk to creditors, but it also means
that the cooperatives may forego some income-earning opportunities associated
with use of financial leverage.
As indicated in Table 12, the average cooperative in the four groups
maintained debt-equity ratios during 1966-1977 which were substantially
smaller than the target ratio suggested by Gries and Torgerson and the
Robert Morris Industry Standard ratios. Moreover, while the debt-equity
ratio for the cooperatives (especially the Group 4 cooperatives) did rise
modestly beginning in about 1970, the increase was substantially less than
for the Robert Morris fines. The Group 4 cooperatives recorded the largest
increase in the debt-equity ratios during 1966-1977, increasing them from
.49 in 1966 to .86 ln 1977 (Table 12). The equity capital used by the Group
4 cooperatives declined from 67% of total liabilities and equity in 1966
to 54% of total liabilities and equity in 1977, as these cooperatives substituted
short-term debt for member-supplied equity capital.
The average debt-equity ratio for all Wisconsin farm supply cooperatives
was only half as large as the Robert Morris ratios for 1966-1977. This
result suggests that the Wisconsin cooperatives may have used less than
optimal amounts of debt. Managers of the cooperatives, therefore, may have
foregone income opportunities which would have been available if more leverage
had been employed.
Working Capital Turnover.
Except for those of cooperatives in Group 4, the sales-working capital
ratios for all Wisconsin cooperatives were less than those for the Robert
Morris Industry group and within the range mentioned by Schermerhorn and
Page during 1966- 1977. The average working capital turnover ratio for
the Group 4 cooperatives exceeded the comparable ratio for the Robert Morris
group by .75 percentage points during 1966-1977. However, this does not
necessarily identify any significant "over-trading" by the Group 4 firms,
since the ratio for these cooperatives exceeded the comparable ratio for
the Robert Morris firms by only 9% (9.08 versus 8.33).
Table 13: Net Sales to Working Capital Ratio for the Average Cooperative
in Sales Groups 1, 2, 3 and 4, the All Cooperative Group, and Firms in
the Robert Morris Industry Group
Cooperatives in Group 3 generated the largest savings to sales ratios
during 1966-1977 (Table 14). The savings to sales ratios for the Group
3 cooperatives also showed a relatively strong uptrend during 1966-1977.
The efficiency ratios for the average Wisconsin Cooperative in all size
groups except Group 1 were higher than those for the Robert Morris firms.
This suggests that in terms of the savings to sales ratio maintained, the
cooperatives generally performed well relative to other farm supply firms.
Table 15: Total Return on Total Assets and Local Return on Local
Assets for the Average Cooperative in Sales Group 1, 2, 3 and 4, the Robert
Morris Industry Groups and the All Cooperative Group, Selected Years 1966
through 1977 a (All numbers are percentages)
In essence, the local return on local assets ratio measures the ability
of the cooperative to generate savings strictly on the basis of its local
operation. This accounts for assets specific to the individual cooperative
as well as for local economic and geographic conditions. The difference
between the two ratios is significant insofar as it reflects the extent
of dependence of the local cooperative on an affiliated regional cooperative.
Returns on total assets for the Wisconsin farm supply cooperatives were
significantly greater than returns on local assets during 1966-1977. As
shown in Table 15 for the average firm in the all cooperative group, the
6.731 total return on total assets figure for 1966 exceeded the local return
on local assets figures of 4.96% by 1.77%. The comparable differential
for 1977 was 3.60% (8.18% less 4.58%). The widest differential for all
four representative cooperative groups was recorded by the Group 1 firms
in 1977. For these firms, total returns on total assets and local returns
on local assets were 6.23% and 2.22%, respectively, for a differential
of 4.01% in 1977 (Table 15).
The figures in Table 15 show the strong influence investments in other
cooperatives have on the performance of the local farm supply operations.
Generally, outside investments were responsible for improving returns on
total assets by 2-4%. Moreover, the results show that the larger cooperatives
in Groups 3 and 4 generate larger returns. Both total returns on total
assets and local returns on local assets for these larger firms were substantially
larger than the all cooperative average in most cases. The relatively smaller
cooperatives in-Groups 1 and 2, on the other hand, recorded total returns
on total assets and local returns on local assets substantially below the
all cooperative average for the years examined.
The importance of patronage refunds received from other cooperatives
(generally the affiliated regional cooperative) on local operations declined
between 1966-1974 and increased again in 1977 (Table 16). Note the relatively
greater dependence placed on patronage refunds from other cooperatives
by the smaller cooperatives. Specifically, refunds as a percent of savings
for cooperatives in Groups 1 and 2 ranged from 32~. to 73! during the 1966-1977
period. The smaller range of 291 to 59. was recorded by the larger cooperatives
in Groups 3 and 4 during the same period. In all but one case, the Group
4 firms placed the least dependence on patronage returns from other cooperatives,
recording return ratios significantly below those of the smaller firms
as well as the all cooperative average. A heavy dependence on other cooperatives
as a source of savings may create a situation where local management becomes
limited in its decision-making ability.
b. Figures for Group 2 Cooperatives are based on
data for 48 firms for 1973, 1976 and 1977 and for 49 firms for 1974 and
1975.
c. Figures for Group 3 Cooperatives are based on
data for 33 firms for 1973-77.
d. Figures for Group 4 cooperatives are based on
data for 36 firms for 1973-77.
e. Figures for All Cooperative Group are based on
data for 141 firms in 1977, 142 firms in 1973 and 1976 and 143 firms in
1974 and 1975.
2 The CPI deflator was used since it was suggested
by the Financial Accounting Standards Board in 1979 for removing general
effects of inflation from financial statements.
3 Brown, Gail N., statement made at session dealing
with the "Impact of Inflation on Cooperatives" at the Annual Meeting of
the Wisconsin Federation of Cooperatives. November 13, 1979, Oconomowoc,
Wisconsin.
4 Dahl, Wilmer A. and W.D. Dobson, Reducing Financing
Costs and Financial Management Problems of Cooperatives, Res. Rep.
R2791, College of Agricultural and Life Sciences, University of Wisconsin-Madison,
June 1976.
5 Smith, Frank J., Jr. and Ken Cooper, The Financial
Management of Agribusiness Firms, Spec. Rep. 26, Dept. of Agr. and
Applied Econ., University of Minnesota, September, 1967.
6 Gries, Gary E., and Randall E. Torgerson, Financial
Structure of Local Missouri Farm Supply Cooperatives, Spec. Rep. 157,
Dept. of Ag. Econ., University of Missouri, Columbia, August 1973.
8 Appendix Table 1 contains a detailed aging schedule
of accounts receivable for average cooperatives in Groups 1, 2, 3 and 4
and the All-Cooperative Group during 1973-1977. The aging schedules show
for the average cooperative in each group the dollar amount of accounts
receivable which are 1-30 days, 1 month-6 months, 6 months-1 year, and
over 1 year of age.
10 Schermerhorn, Richard E. and R.E. Page, Financial
Statement Analysis for Agri-Business Firms, Circular E-812, Oklahoma
State University Extension Service, Oklahoma State University.
Table 7: Current Ratios for the Average Cooperative in Sales Groups
1, 2, 3 and 4, All Cooperative Group and Firms in the Robert Morris Industry
Group
Average Current Ratio for
Group 1 Group 2 Group 3 Group 4 All Cooperative Robert Morris
Year Co-op Co-op Co-op Co-op Group Industry Group
1966 2.55 2.20 2.12 2.18 2.20 2.00
1967 2.49 2.23 1.87 1.92 2.02 2.00
1968 2.56 1.96 2.04 2.08 2.08 2.00
1969 2.28 2.21 2.06 1.78 1.99 2.10
1970 2.22 1.94 1.81 1.74 1.86 2.00
1971 2.27 1.94 1.92 1.84 1.92 1.80
1972 2.28 1.80 1.85 1.81 1.85 1.70
1973 2.65 1.87 1.93 1.71 1.85 1.60
1974 2.29 1.98 1.96 1.80 1.91 1.60
1975 2.23 1.99 1.92 1.76 1.88 1.70
1976 2.12 2.01 1.88 1.69 1.83 1.60
1977 2.05 1.82 1.71 1.59 1.71 1.70
Simple Average for 1966-77
2.33 2.00 1.93 1.83 1.93 1.82
Accounts Receivable.
The financing of sales to farmer members represents an important source
of short-term financing for farmers. Those who manage these trade accounts
receivable, however, must establish a proper balance between the benefits
and costs of extending credit.
Table 8: Trade Accounts Receivable as a Percent of Current Assets
of the Average Cooperative in Sales Groups 1, 2, 3 and 4 and the All Cooperative
Group, 1973-1977
Accounts Receivable as Percent of Current Assets
Cooperative Group 1973 1974 1975 1976 1977
(percent)
Group 1 49.79 47.31 47.03 48.28 49.19
Group 2 41.26 36.76 34.07 39.17 38.13
Group 3 39.13 37.41 35.61 37.79 38.71
Group 4 35.98 37.20 36.80 41.20 40.22
All Cooperative Group 40.02 38.85 37.51 41.55 41.09
Based on the guidelines suggested by Gries and Torgerson, it appears
that the smaller cooperatives in Group 1 had an excessive amount of current
assets tied up in trade accounts receivable during 1973-1977. Therefore,
accounts receivable may need to be monitored more closely in the smaller
supply cooperatives. This monitoring may be especially necessary since,
as indicated later, the smaller firms have exhibited the highest delinquency
rates as well as the highest bad debt loss experience.
Table 9: Growth in Trade Accounts Receivable and Sales of the Average
Cooperative in Sales Groups 1, 2, 3 and 4, and the All Cooperative Group,
1974-1977
Cooperative Percent Change from Year Earlier
Group in Accounts Receivable and Net Sales
1974 1975 1976 1977
Group 1
Accounts Receivable 31.30 7.75 9.82 10.51
Sales 37.52 2.84 9.02 11.06
Group 2
Accounts Receivable 19.25 2.72 19.47 14.24
Sales 34.16 4.56 11.32 16.18
Group 3
Accounts Receivable 21.91 8.30 15.06 18.34
Sales 40.21 7.00 15.00 13.17
Group 4
Accounts Receivable 35.97 11.44 20.70 14.47
Sales 44.19 10.18 18.14 9.02
All Cooperative Group
Accounts Receivable 27.78 8.40 18.26 14.86
Sales 40.42 7.70 15.37 11.67
Delinquency Index.
A delinquency index for trade accounts receivable is presented in Table
10. This index equals the ratio of noncurrent trade accounts receivable
to total accounts receivable. The assumption made is that current accounts
receivable consist of those accounts which are 30 days or less in age,
while noncurrent accounts receivable are those over 30 days of age. A relatively
high ratio indicates that the firm has a higher proportion of its accounts
which are older than 30 days. This obviously becomes a management concern
if credit terms are for a 30-day period.8
Table 10: Noncurrent Trade Accounts Receivable to Total Accounts
Receivable Ratios for the Average Cooperative in Groups 1, 2, 3 and 4 and
the All Cooperative Group, 1973-1977
Ratio of Noncurrent Accounts Receivable to Total
Accounts Receivable (percent)
Cooperative Group 1973 1974 1975 1976 1977
Group 1 64.81 65.38 63.53 64.26 64.27
Group 2 61.62 60.40 60.52 60.72 61.07
Group 3 56.72 55.75 59.80 53.11 61.76
Group 4 51.11 54.01 53.78 54.90 57.94
All Cooperative Group 56.09 56.68 57.43 56.30 59.96
An inverse relationship existed between the delinquency rate and the
sales volume of the firms (Table 10). Thus, cooperatives in Groups 1 and
2 recorded the highest delinquency rates during 1973-77, while those in
Groups 3 and 4 re- corded lower rates. Note, however, that the delinquency
rates for the smaller fi rms remained relatively constant during 1973-1977,
while the delinquency rates increased for the larger firms during this
period. The delinquency rate for the Group 3 cooperatives, for example,
increased 5.04% over the period, while those in Group 4 experienced an
increase of 6.83% during 1973-1977. These results suggest that larger firms
may have become more lax in management of accounts receivable in recent
years. Such developments may need to be carefully monitored.
Information on the bad debt losses of the average cooperative in the
different size categories during 1973-1977 appears in Table 11. For purposes
of the analysis, bad debt losses were defined as accounts receivable which
were written off as uncollectible by the cooperatives. The larger cooperatives
experienced the largest absolute bad debt losses; for example, the average
cooperative In Group 4 sustained a bad debt loss of $13,955 in 1977, compared
to a $2,844 bad debt loss for the average Group 1 cooperative during 1977.
However, bad debt losses as a percentage of sales were greater for the
smaller cooperatives than for the larger ones (Table 11).
Table 11. Bad Debt Expense for the Average Cooperative in Sales
Groups 1, 2, 3 and 4 and the All Cooperative Group, 1973-1977
Cooperative Group
and Measure Bad Debt Expense for
of Bad Debt 1973 1974 1975 1976 1977
Group 1
Dollars $1,533 $2.027 $3,460 $3,022 $2,844
Percent of Sales .31 .30 .50 .40 .32
Group 2
Dollars 7,625 7,824 4,696 5,136 5,487
Percent of Sales .71 .55 .32 .31 .28
Group 3
Dollars 5,678 6,102 6,119 5,659 7,131
Percent of Sales .35 .27 .25 .20 .22
Group 4
Dollars 8,052 14,861 11,963 11,669 13,955
Percent of Sales .29 .47 .27 .23 .25
All Cooperative Group
Dollars 6,208 8,185 6,638 6,541 7,584
Percent of Sales .41 .38 .29 .25 .25
IV. Solvency Ratios
Whereas liquidity measures the ability of the firm to meet short-term liabilities,
solvency focuses on long-term obligations. As used here, solvency refers
to the relationship between a firm's debt and equity capital. The higher
the ratio of debt to equity, the less protection that is available to a
firm's creditors. In Table 12, solvency is measured by the ratio of equity
(net worth) to total (short and long-term) debt.
Table 12: Debt to Equity Ratios for the Average Cooperative in Sales
Groups 1, 2, 3 and 4, the All-Cooperative Group and firms in the Robert
Morris Industry Group
Average Debt-Equity Ratio
Group 1 Group 2 Group 3 Group 4 All Co-op Robert Morris
Year Co-op Co-op Co-op Co-op Group Industry Group
1966 .41 .36 .34 .49 .40 .86
1967 .45 .37 .42 .57 .46 .80
1968 .45 .44 .43 .55 .48 .80
1969 .47 .42 .42 .62 .49 .80
1970 .52 .47 .48 .72 .56 .90
1971 .51 .48 .51 .73 .58 1.00
1972 .51 .53 .53 .74 .60 1.20
1973 .42 .50 .49 .60 .64 1.40
1974 .47 .52 .48 .79 .61 1.50
1975 .45 .52 .50 .75 .60 1.40
1976 .51 .53 .49 .75 .60 1.40
1977 .52 .60 .55 .86 .68 1.50
Simple Average
for 1966-77 .47 .48 .47 .70 .56 1.13
V. Efficiency Ratios
Efficiency ratios measure how effectively a firm employed its resources.
Two ratios are treated here: the sales to working capital ratio and net
savings to sales ratio. Recall that sales represents actual sales less
discounts and returned purchases. Working capital is the amount by which
current assets exceed current liabilities. Net savings are defined as gross
operating income less operating expenses.
The sales to working capital ratios (working capital turnover ratios)
in Table 13 were developed from information extracted from the balance
sheets and operating statements of the cooperatives. These ratios show
how actively working capital was turned over or put to use by the firms
in generating sales. They also reflect whether the cooperatives were "over-trading",
that is, attempting to make excessive use of available working capital.
Such a condition is most often associated with the excessive use of short-term
assets. An unusually high ratio might also indicate a situation where a
firm lacks adequate operating funds to take advantage of available discounts
and finds it difficult to meet maturing obligations. This typically becomes
a major concern only if the ratio becomes unusually large. Schermerhorn
and Page report that most agricultural business firms maintain a ratio
of net sales to working capital ranging from 4.0 to 8.0.10
With the exception of the Group 4 firms, the cooperatives may have maintained
lower than optimal working capital turnover rates during 1966- 1977. For
example, the average sales-working capital ratio recorded by the Group
1 cooperatives was 5.98, or 2.35 percentage points below the comparable
Robert Morris figures and 1.66 percentage points below the all Cooperative
group average for this period (Table 13). Moreover, the sales- working
capital ratio for the Group 1 cooperatives failed to increase during 1976-1977
(when higher interest rates presumably placed a premium on higher working
capital turnover rates) by as much as that recorded by the larger firms
in Groups 2, 3 and 4. Thus, managers of the Group 1 cooperatives, and possibly
those managing firms in Groups 2 and 3 as well, might increase net savings
if ways were found to obtain a more rapid rate of working capital turnover.
*
Average Sales-Working Capital Ratio
Year
Group 1 Cooperative
Group 2 Cooperative
Group 3 Cooperative
Group 4 Cooperative
All Cooperative Group
Robert Morris Industry Group
1966
6.09
6.60
6.77
7.82
7.03
7.35
1967
5.99
6.58
7.50
8.49
7.43
7.20
1968
5.75
7.28
6.72
9.17
7.62
7.00
1969
6.26
6.57
6.49
10.13
7.71
7.70
1970
6.23
7.40
6.64
9.77
7.91
7.20
1971
6.01
7.26
6.67
9.08
7.65
7.40
1972
5.69
7.67
7.08
8.87
7.77
8.70
1973
5.24
6.98
6.27
8.24
7.12
8.20
1974
5.99
6.88
6.82
9.47
7.85
8.60
1975
5.78
6.37
6.48
8.34
7.15
8.80
1976
6.14
6.70
7.18
9.66
7.97
11.30
1977
6.60
7.48
7.66
9.89
8.42
10.50
Simple Average for 1966-77
5.98
6.98
6.86
9.08
7.64
8.33
Savings to Sales Ratios.
The savings to sales ratios in Table 14 give one indication of how well
cooperatives are being managed. This summary ratio shows, among other things,
how managers control expenses in relation to sales revenue. The higher
the ratio, the more that is being earned by the Cooperative on each dollar
of sales to farmer members. Incorporated in this ratio, then, is the efficiency
of the operation as well as its pricing policy.
Table 14: Savings to Sales Ratios for the Average Cooperative in
Sales Groups l, 2, 3 and 4, the All Cooperative Group, and Firms in the
Robert Morris Industry Group
Average Savings to Sales Ratio
Grp. 1 Grp. 2 Grp. 3 Grp. 4 All Co-op Robert Morris
Year Co-op Co-op Co-op Co-op Group Industry Group
1966 2.78 4.38 4.39 4.00 4.06 2.20
1967 3.63 4.75 4.63 4.41 4.47 1.60
1968 3.34 4.28 4.70 4.02 4.19 3.60
1969 2.79 4.25 4.73 3.79 4.04 4.20
1970 3.01 4.15 4.92 3.35 3.88 5.90
1971 3.31 4.12 4,45 3.94 4.05 4.40
1972 3.41 3.87 4.46 4.00 4.04 5.40
1973 5.11 5.02 5.84 5.41 5.42 4.10
1974 6.55 8.04 8.95 6.79 7.56 5.10
1975 s.ao 6.33 7.10 6.30 6.43 4.30
1976 3.84 4.89 6.22 4.95 5.18 3.00
1977 3.26 4.46 5.45 3.58 4.43 3.10
Simple
Average
for 1966-77
3.84 4.88 5.49 4.58 4.81 3.91
VI. Profitability Ratios
The profitability of a firm is a result of a large number of policies and
decisions. Although the parameters of financial performance examined thus
far are factors which influence profitability, Tables 15 and 16 give more
specific answers about how effectively the cooperatives were managed.
a. The Industry Standard figures appearing in Table
15 are figures for Robert Morris Associates firms which are roughly comparable
to the cooperatives in the different size categories. For example, the
Industry Standard figures appearing to the right of those for the Group
1 cooperatives are for firms roughly comparable in size to the Group 1
cooperatives.
YEAR AND RETURN
GROUP 1 COOPERATIVE
INDUSTRY STANDARD
GROUP 2 COOPERATIVE
INDUSTRY STANDARD
GROUP 3 COOPERATIVE
INDUSTRY STANDARD
GROUP 4 COOPERATIVE
INDUSTRY STANDARD
ALL COOP. GROUP
INDUSTRY STANDARD
1966
Total Return on Total Assets 4.94
5.30
6.54
4.00
6.54
6.90
7.53
6.90
6.73
6.10
1966
Local Return on Local Assets 2.50
N.A.
4.80
N.A.
4.70
N.A.
5.94
N.A.
4.96
N.A.
1970
Tota1 Return on Total Assets 5.11
3.70
6.42
6.10
6.90
5.80
6.62
5.80
6.52
5.70
1970
Local Return on Local Assets 3.57
N.A.
5.07
N.A.
5.64
N.A.
5.26
N.A.
5.18
N.A.
1974
Total Return on Total Assets 12.73
9.70
14.56
9.90
15.57
9.90
16.33
9.90
15.47
9.70
1974
Local Return on Local Assets 11.23
N.A.
12.82
N.A.
14.53
N.A.
14.08
N.A.
13.74
N.A.
1977
Tota1 Return on Total Assets 6.23
5.80
7.81
6.60
9.40
6.60
7.83
6.60
8.18
6.50
1977
Local Return on Local Assets 2.22
N.A.
4.15
N.A.
6.33
N.A.
4.02
N.A.
4.58
N.A.
Table 16: Ratio of Patronage Refunds Received From Other Cooperatives
to Net Savings for the Average Cooperative in Sales Groups 1, 2, 3 and
4 and the All Cooperative Group, Selected Years 1966 through 1977
Patronage Refunds Received from Other Cooperatives
to Net Savings Ratio
Year Group 1 Group 2 Group 3 Group 4 All Co-op
Co-ops Co-ops Co-ops Co-ops Groups
1966 62.2 47.0 49.1 38.3 45.2
1970 47.9 41.3 40.3 36.1 39.4
1974 31.6 33.2 29.9 29.1 30.4
1977 72.7 60.4 50.4 59.2 57.2
In order to properly evaluate the return on assets, a distinction is
made between rates of return on total assets and rates of return on local
assets. Local assets are defined as total assets less total investments.
Total investments include investments by local supply firms in other cooperatives--especially
the affiliated regional cooperative. Two measures are developed in Table
15. The first involves total return on total assets. computed as the ratio
of net savings to total assets. The second is defined as the ratio of-net
local savings to local assets, where net local savings equals net savings
minus patronage refunds received from other cooperatives.
Appendix Table 1. Accounts Receivable Aging Schedules for the Average Cooperative
in Sales Groups 1, 2, 3 and 4 and the All Cooperative Group, 1973-1977
Cooperative Group Average Amount of Accounts
And Age of Accounts Receivable in Age Category as of Fiscal
Category Year Ending
1973 1974 1975 1976 1977
Group 1 Cooperatives a
1-30 days $23,980 $30,978 $35,154 $37,838 $41,805
1 mo - 6 mo 27,953 39,033 38,673 43,985 49,091
6 mo - 1 yr 7,205 11,547 11,930 12,541 15,251
Over 1 year 8,817 7,242 10,857 11,703 11,278
Other 186 670 (213) (199) (435)
Total 68,141 89,470 96,401 105,868 116,990
Group 2 Cooperatives b
1-30 days $50,740 $61,162 $62,643 $76,013 $86,063
1 mo - 6 mo 51,370 67,690 64,893 82,012 95,844
6 mo - 1 yr 16,026 15,423 18,557 21,427 24,829
Over 1 year 14,034 10,997 13,300 14,458 15,217
Other 38 (828) (740) (416) (896)
Total 132,208 154,444 158,653 193,494 221,057
Group 3 Cooperatives c
1-30 days $91,675 $114,278 $112,442 $150,905 $145,623
1 mo - 6 mo 82,796 109,215 127,574 122,971 180,198
6 mo - 1 yr 18,456 19,489 22,126 23,594 25,635
Over 1 year 17,808 14,214 15,938 21,150 25,865
Other 1,105 1,055 1,600 3,192 3,495
Total 211,840 258,251 279,680 321,812 380,816
Group 4 Cooperatives d
1-30 days $148,468 $189,906 $212,715 $250,518 $267,441
1 mo - 6 mo 123,034 186,074 197,008 236,540 281,069
6 mo - 1 yr 20,452 28,326 37,394 47,491 61,505
Over 1 year 14,973 13,574 24,551 26,825 32,841
Other (3,228) (4,925) (11,463) (5,918) (7,029)
Total 303,699 412,955 460,205 553,456 635,827
All Cooperative Group e
1-30 days $80,318 $100,554 $107,110 $130,937 $138,779
1 mo - 6 mo 72,719 102,066 108,034 124,012 154,920
6 mo - 1 yr 16,160 18,932 22,965 26,974 32,751
Over 1 year 14,230 11,732 16,314 18,663 21,538
Other (516) (1,164) (2,809) (934) (1,355)
Total 182,911 232,120 251,514 299,652 346,633
a. Figures for Group 1 Cooperatives are based on data
for 25 firms for 1973-76 and for 24 firms for 1977.
Footnotes
1 The Robert Morris Associates benchmark figures employed
in the study represent figures collected by bank loan officers from loan
application figures submitted by farm supply retailers across the U.S.
and Canada. These figures were obtained from Robert Morris Associates,
Annual Statement Studies, Philadelphia, Pennsylvania, for various years.
Return to UWCC Homepage