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Financial Ratio Analysis Template for Cooperatives

This template is designed to assist managers and board members


in calculating and interpretating standard financial ratios.
Up to five years of financial statement information can be
entered on the income statement and balance sheet worksheets.
The ratio worksheet calculates common financial ratios and provides
industry benchmarks. A "red light" "green light" analysis
illustrates which ratios are unacceptable (red light) or
exceeding standards (green light). Calculated ratios
close to industry standards do not trigger either a "red light"
or a "green light".
Other sheets on the template provides graphs
of the common ratios.
input cell color
Input information is entered in the green cells on the
income statement and balance sheet pages.
Calculation cells are protected. The template can be
modified by turning off the protection. Before modifying the
template you should save a master copy under a different file name.
Cooperative Name Case Study Cooperative
Statement of Income and Expenses
2010 2009 2008 2007 2006 Average
Sales
Grain $ 5,156,395 $ 5,881,151 $ 3,302,963 $ 4,689,774 $ 4,689,774 $ 4,744,011
Farm Supply $ 3,664,765 $ 3,345,770 $ 2,946,158 $ 3,028,085 $ 3,028,085 $ 3,202,573
Total Sales $ 8,821,160 $ 9,226,921 $ 6,249,121 $ 7,717,859 $ 7,717,859 $ 7,946,584
Costs of Goods Sold Grain $ 4,686,341 $ 5,604,171 $ 2,925,217 $ 4,183,877 $ 4,000,000
Costs of Goods Sold Farm Supply $ 3,202,767 $ 2,956,050 $ 2,616,553 $ 2,697,462 $ 2,000,000
Gross Margin Grain $ 470,054 $ 276,980 $ 377,746 $ 505,897 $ 689,774
Gross Margin Farm Supply $ 461,998 $ 389,720 $ 329,605 $ 330,623 $ 1,028,085
Gross Margin on Grain and Farm Supply $ 932,052 $ 666,700 $ 707,351 $ 836,520 $ 1,717,859

Other Income
Storage and Handling $ 73,886 $ 56,888 $ 108,413 $ 86,554 $ 86,554
Feed milling $ 33 $ 7,310 $ 45,911 $ 45,911
Custom Application $ 182,641 $ 187,928 $ 215,338 $ 157,839 $ 157,839
Petroleum Revenues $ 28,686 $ 31,687 $ 40,667 $ 39,685 $ 39,685
Finance Charge $ 24,051 $ 21,315 $ 20,588 $ 23,274 $ 23,274
Other Income #1 (feed truck) $ 1,038 $ 1,065 $ 12,670 $ 12,362 $ 12,362
Other Income #2 (misc) $ 2,867 $ 1,215 $ 922 $ 6,290 $ 6,290
Gain (loss) on sale of fixed assets $ 5,170 $ 220 $ (1,387) $ (1,387)
Total Other Income $ 313,169 $ 305,301 $ 406,128 $ 370,528 $ 371,915

Total Gross Income $ 1,245,221 $ 972,001 $ 1,113,479 $ 1,207,048 $ 2,089,774

Operating Expenses
Payroll and Benefits $ 444,199 $ 431,200 $ 404,860 $ 409,602 $ 409,602
Fixed Expenses
Depreciation and Amoritzation $ 156,948 $ 177,105 $ 177,140 $ 177,070 $ 177,070
Interest $ 512,382 $ 499,665 $ 469,767 $ 502,189 $ 502,189
Insurance
Property Taxes $ 29,999 $ 31,353 $ 32,990 $ 29,564 $ 29,564
Total Fixed Expense $ 699,329 $ 708,123 $ 679,897 $ 708,823 $ 708,823
Utilities
Truck
Repairs and Supplies
Advertising
Office Supplies
Rent
Bad Debt Provision $ (23,500) $ (26,000) $ (26,000) $ (30,000) $ (30,000)
Telephone
Other Operating Expenses
Total Other Expense
Total Operating Expenses $ 1,143,528 $ 1,139,323 $ 1,084,757 $ 1,118,425 $ 1,118,425

Local Savings $ 101,693 $ (167,322) $ 28,722 $ 88,623 $ 971,349


Patronage Refunds Received $ 47,769 $ 43,012 $ 45,951 $ 16,508 $ 16,508
Other non-local income (expense) $ 10,233 $ 9,474 $ (127,243) $ (49,985) $ (49,985)
Savings before Income Tax $ 159,695 $ (114,836) $ (52,570) $ 55,146 $ 937,872
Case Study Cooperative Case Study Cooperative
Balance Sheet Balance Sheet
Assets 2010 2009 2008 2007 2006 Liabilities and Members Equity
Current Assets Current Liabilities
Cash $ 37,610 $ 135 $ 3,214 $ 4,736 $ 4,736 Notes Payable
Accounts Receivable $ 470,527 $ 430,237 $ 293,507 $ 258,789 $ 258,789 Current Portion of Long Term Note
Allowance for Doubtful $ (23,500) $ (26,000) $ (26,000) $ (30,000) $ (30,000)
Notes Receivable $ 10,030 $ 29,344 $ 12,534 $ 8,578 $ 8,578
Sales Contracts Recievable $ 351,879 $ 21,992 $ 532,527 $ 46,296 $ 46,296 Secured Operating Loan
Accrued Storage $ 42,756 $ 18,635 $ 56,947 $ 57,757 $ 57,757 Accounts Payable
Other Receivable $ 148,701 $ 21,608 $ 43,643 $ 202,827 $ 202,827 Trade
Grain Inventory $ 1,255,418 $ 97,753 $ 328,782 $ 257,389 $ 257,389
Farm Supply Inventory $ 382,982 $ 341,789 $ 301,624 $ 366,829 $ 366,829 Grain
Prepaid income taxes $ 3,800 $ 3,800 $ 2,800 $ 6,880 $ 6,880
Prepaid Expenses $ 76,588 $ 24,512 $ 39,659 $ 104,498 $ 104,498 Accrued Payables and Taxes
Total Current Assets $ 2,756,791 $ 963,805 $ 1,589,237 $ 1,284,579 $ 1,284,579 Patron Refunds Payable
Total Current Liabilities
Long-term Assets
Property Plant and Equipment at Cost $ 3,427,920 $ 3,400,704 $ 3,373,115 $ 3,265,158 $ 31,590,419 Deferred Taxes and Liabilities
Accumulated Depreciation $ 2,699,029 $ 2,542,081 $ 2,367,424 $ 2,192,564 $ 17,916,299
Net Property Plant and Equipment $ 728,891 $ 858,623 $ 1,005,691 $ 1,072,594 $ 13,674,120 Long Term Debt, Excluding Current
Secured Note
Other Assets $ 315,299 $ 317,115 $ 300,362 $ 197,935 $ 16,171
Total Long Term Debt
Total Local Assets $ 3,800,981 $ 2,139,543 $ 2,895,290 $ 2,555,108 $ 14,974,870
Total Liabilities
Investments in Cooperatives $ 209,926 $ 172,911 $ 680,238 $ 650,949 $ 12,833,530
Members Equities
Total Assets $ 4,010,907 $ 2,312,454 $ 3,575,528 $ 3,206,057 $ 27,808,400 Common Stock
Allocated Patranage
Unallocated Reserve
Patronage dividends payable
Total Members Equity

Total Liability and Equity


2010 2009 2008 2007 2006

$ 1,863,369 $ 319,892 $ 744,723 $ 474,336 $ 474,336


$ 97,776 $ 97,776 $ 97,776 $ 78,180 $ 78,180

$ 186,839 $ 148,539 $ 196,748 $ 72,764 $ 72,764

$ 37,162 $ 85,725 $ 85,725


$ 20,437 $ 20,437
$ 94,218 $ 17,295 $ 20,539 $ 20,170 $ 20,170

$ 2,242,202 $ 583,502 $ 1,096,948 $ 751,612 $ 751,612

$ 306,322 $ 404,098 $ 501,874 $ 403,650 $ 403,650


$ 4,000 $ 4,000 $ 4,000 $ 8,641 $ 8,641

$ 310,322 $ 408,098 $ 505,874 $ 412,291 $ 8,641

$ 2,552,524 $ 991,600 $ 1,602,822 $ 1,163,903 $ 760,253

$ 68,800 $ 1,074,700 $ 1,102,400 $ 1,118,200 $ 1,118,200


$ 789,382 $ 233,713 $ 229,174 $ 209,815 $ 209,815
$ 600,201 $ 12,441 $ 641,132 $ 693,702 $ 693,702
$ 20,437 $ 20,437
$ 1,458,383 $ 1,320,854 $ 1,972,706 $ 2,042,154 $ 2,021,717

$ 4,010,907 $ 2,312,454 $ 3,575,528 $ 3,206,057 $ 2,781,970


RATIO ANALYSIS FOR: Case Study Cooperative
2010 2009 2008 2007 2006 STANDARD CALCULATION
Profitability Analysis
Local Savings $ 101,693 $ (167,322) $ 28,722 $ 88,623 $ 971,349 Local Savings
Gross Margin $ $ 932,052 $ 666,700 $ 707,351 $ 836,520 $ 1,717,859 Sales-COGS
Gross Margin Trend YOY 39.80% -5.75% -15.44% -51.30% % Change in GM$
Local Savings Margin 1.15% -1.81% 0.46% 1.15% 12.59% > 1.5% Local Savings/Sales
Local Savings to Local Assets (ROA) 2.68% -7.82% 0.99% 3.47% 6.49% > 8% local savings/local assets
Return on Local Equity (ROE) 8.15% -14.58% 2.22% 6.37% -8.98% > 10% local savings/members equity
EBITDA $ 829,025 $ 561,934 $ 594,337 $ 734,405 $ 1,617,131 Net Earnings+Int Ext+Dep&Amort+Tax
EBITDA/(Int Exp + CMLTD) 1.36 0.94 1.05 1.27 2.79 >1 EBITDA/(Int Exp + Current Maturities LT Debt)
Neutral Unfavorable Unfavorable Unfavorable Favorable

Expense Ratios
Personnel Cost/Gross Margin 35.67% 44.36% 36.36% 33.93% 19.60% < 35% for grain coops, 45% for Farm Supply
Fixed Expenses/Gross Margin 56.16% 72.85% 61.06% 58.72% 33.92% < 25-30
Other Expense /Gross Margin 0.00% 0.00% 0.00% 0.00% 0.00% <25
Operating Expense to Sales 12.96% 12.35% 17.36% 14.49% 14.49% < 10%
Bad Debt/Sales 0.64% 0.78% 0.88% 0.99% 0.99% < .25%
Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable

Efficiency Ratios
Total Asset Turnover 2.20 3.99 1.75 2.41 0.28 > 4 to 5 Sales/Total Assets
Total Assets/Sales 45.47% 25.06% 57.22% 41.54% 360.31% < 20%
Farm supply inventory turnover 9.57 9.79 9.77 8.25 8.25 > 7 to 10
Average Farm Supply Sales Outstanding 44.94 45.01 34.87 29.91 29.91 < 30 to 45 days Accounts Rec./Daily Farm Supply Sales
Accounts over 60 days < 20% over 60 days
Fixed Assets/Total Assets 18.17% 37.13% 28.13% 33.46% 49.17% < 33%
Unfavorable Neutral Unfavorable Favorable Favorable

Liquidity Ratios
Working Capital $ 514,589 $ 380,303 $ 492,289 $ 532,967 $ 532,967 $ 500,000
Current Ratio 1.23 1.65 1.45 1.71 1.71 > 1.5 Farm Supply, 2.0 Grain Coops
Working Capital to Sales 5.83% 4.12% 7.88% 6.91% 6.91% > 7% 1.5% grain sales + 2.5% of Farm supply sales
Favorable Neutral Unfavorable Favorable Favorable

Debt Ratios
Debt/Assets 7.74% 17.65% 14.15% 12.86% 0.03% < 50% L.T. Debt/Total Assets (TD/TC)
Debt/Equity 21.28% 30.90% 25.64% 20.19% 0.43% < 50% L.T. Debt/Total Equity
Debt/Local Equity 24.86% 35.55% 39.14% 29.64% -0.08% <30% to 40% L.T. Debt/Net Worth-Investment in Coops
Ownership Ratio ME/TA 36.36% 57.12% 55.17% 63.70% 7.27% > 50-60% Total Equity/Total Assets
Local Equity/Total Equity 85.61% 86.91% 65.52% 68.12% -534.78% > 80%
Working capital $ 514,589 $ 380,303 $ 492,289 $ 532,967 $ 532,967 1.5% grain sales + 2.5% of Farm supply sales
Working Capital

$600,000

$532,967 $532,967
$514,589
$492,289 $500,000
$500,000

$400,000 $380,303

$300,000

$200,000

$100,000

$-
2010 2009 2008 2007 2006 STANDARD

Working Capital
Expense Ratio

Personnel Cost/Gross Margin


Fixed Expenses/Gross Margin
Operating Expense to Sales
Bad Debt/Sales
Other Expense /Gross Margin
80.00%

70.00%
Percentages

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
2010 2009 Year 2008 2007
Profitability

Personnel Cost/Gross Margin


Fixed Expenses/Gross Margin
Other Expense /Gross Margin
Operating Expense to Sales
Bad Debt/Sales

75.00%
70.00%
65.00%
60.00%
Percentages

55.00%
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2010 2009 2008 2007
-5.00%
Year
Efficiency

Total Asset Turnover


Total Assets/Sales
Farm supply inventory turnover
Average Farm Supply Sales Outstanding
Fixed Assets/Total Assets
50.00

45.00

40.00
Percentages

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00
2010 2009 2008 2007
Year
Inventories
0.428571