An Electronic Company Employees’ Multi-Purpose Cooperative: Analysis of Cooperative’s Financial Performance During the Pandemic for Fy 2019 – 2021

Abstract

This study aims to evaluate the audited financial statements of the Electronic Company Employees' Multi-Purpose Cooperative.The findings and results serveas the basis for recommendations on how to raise the cooperative's financial performance.This study aims to provide potential courses of action and approaches that could help in improving cooperative financial operations for the years 2019 to 2021 using Financial Statement Performance Analysis as its main tool. In order to calculate the financial ratios and provide a comparative financial statement for the Electronic Company Employees' Multi-Purpose Cooperative, this study used documentary analysis as a technique. For the purpose of analyzing the Employees' Multi-Purpose Cooperative's business operations, the researcher gathered the documents from the data mined there. The results of the study are expected to aid Cooperative in improving.To ascertain such, the proponents established Employees’ Multi-Purpose Cooperative performance using the financial statement analysis; comparative statement of financial position, comparative statement of comprehensive income (Horizontal and Vertical Analysis), and statement of cash flow analysis. The ratios that evaluate profitability and performance that were utilized are as follows (1) Operating Profit Margin (2) Current Ratio (3) Debt Ratio and (4) Debt to Equity Ratio (5) Return On Assets and (6) Return On Equity.The following conclusions were reached after studying the financial statement in comparison analysis: The current assets are slightly up by 6%, especially the loans and accounts receivable from 2019 to 2020 and 0.88% for 2020 to 2021. Since the cooperative is a lending and savings business, member loans, capital accumulation, deposits, and other investments of the assets account for the majority of the cooperative's earnings. It was said that for the first two (2) months of coverage, the multinational Electronic Company, where the member-owners of the cooperative work, was in lockdown and pre-pandemic circumstances. Due to the Electronic Company's "No Work, No Pay" policy, there were no collections during that time period. As a result, throughout that time there are stagnant assets and fewer obligations. It is a result of decreasing member savings, rising non-performing loans, restricted debt recovery, and withdrawals from membership. This also has an impact on the restricted cash-in and cash-out, which raises the amount of cash and cash equivalent by roughly 50.95% for year 2020~2021, but results in low loan releases because the borrowers have already taken full advantage of all available loans, thus the situation becomes stationary. Total liabilities for the cooperative went up by 9% from 2019 to 2020 and went down by 2.44% from 2020 to 2021. As it is not earning at the time of the epidemic but will instead pay the necessary earned interest, this strengthens the cooperative's claim that it has duties, notably to the deposit liabilities. However, the cooperative has sufficient cash on hand to cover its short-term debts and obligations. The result of its profitability ratios such as Operating Profit Margin and Return on Assets was mostly considered as good, which means the cooperative can pay itsobligations to the members anytime. It is also determined that the cooperative services had a better debt ratio, which means that the liabilities are lower compared with the assets. Anytime the depositor withdraws their deposits it can immediately be released and pay offmembers’ obligations and it means that the cooperative is ata low-risk level, based on the comparative financial statements, the cooperative is able to generate profits from its operations. The following recommendations were offered as a result that the profitability ratios explaining that the business was less well utilizing its assets.Outside of its current operations, the cooperative is encouraged to make investments for the benefit of its members. Management of hotel operations, joint transportation ventures, gas station linking to vehicle loans as captured market by members who own vehicles or cars, medical care, health insurance, mortuary services, apartment and boarding houses where many of the workers in Lapu-Lapu come from outside Cebu are examples of joint ventures made with other existing cooperatives. In the Visayas region, specifically in the Philippines, Mactan, Lapu-Lapu City, and Cebu, it is also possible to have housing loan or real estate as a developer for the members and extend to the community level because the area needs a basic and affordable shelter and turns into their own assets for them to safely keep their individual living.