The study utilized a quantitative approach, analyzing financial records from
VITPACO’s balance sheet and income statements for the years 2016, 2017, 2018, 2020, and 2021. The study intentionally chose solely the most pertinent data to assess the cooperative’s financial status. Ratio analysis was employed to assess liquidity, efficiency, and profitability, providing a clearer view of performance trends throughout time.
The results showed that from 2016 to 2021, the financial performance of VITPACO changed over time. Liquidity remained at zero, showing the absence of current liabilities and limited assets during those years. Efficiency, measured through the asset turnover ratio, was strong in 2016 but declined in 2017, 2018, 2020, and 2021 due to reduced operations and resource use. Profitability, shown by the net profit margin, reached its highest point in 2018 and 2021 but dropped in 2016 when the cooperative was still in its early stage. The capital position remained small throughout the period, as operations relied mainly on members’ contributions and lacked external financing, which restricted business growth and expansion.
These findings underscore the reliance of the cooperative on outside assistance and reveal the lack of an organized financial management system. Despite VITPACO showing promise during its operational periods, the absence of structured accounting methods and extended financial planning limited its capacity to maintain stability and development. In summary, the study emphasizes the necessity for more robust financial systems to guarantee stable performance.
Keywords - Agriculture cooperative, Financial performance, Financial ratios, Liquidity, Profitability, VITPACO.
INTRODUCTION
Background of the Study
The Villa Consuelo Tree Planters Agriculture Cooperative (VITPACO) serves as an exemplary community-based agricultural development initiative in Villa Consuelo, Naval, Biliran. Established in 1992 as the Villa Consuelo Tree Planters Association, it initially engaged in tree planting activities supported by the Department of Environment and Natural Resources (DENR). By 2000, it had expanded into pineapple production and later diversified into processing vinegar, pineapple jam, and coconut sugar, with assistance from the DAR, DTI, PCA, and DOLE. This transformation led to its formal establishment as a cooperative, now consisting of approximately 50 active members. Through innovation and the development of processing facilities, VITPACO continues to pursue profitability and sustainability.
Financial performance is a vital indicator of an organization's overall health and long-term viability. According to Richard et al. (2009), it includes profitability, return on assets, and return on investment—factors essential for sustainability and growth. Agricultural cooperatives, such as VITPACO, play a crucial role in strengthening rural economies, making financial stability essential for their effectiveness (Stavros et al., 2024). Financial ratio analysis, as explained by Dalen et al. (2013) and Babalola & Abiola (2013), serves as a key tool for assessing financial health, managerial efficiency, and prospects.
While previous studies have emphasized the social and governance aspects of cooperatives (Manansala & Mendiola, 2024; Paradero & Casinillo, 2022), few have explored long-term financial analyses. This study addresses that gap by evaluating VITPACO's financial performance from 2016 to 2021 using ratio analysis. The results provide a comprehensive understanding of its financial condition, supporting stakeholders in making informed, data-driven decisions for sustainable cooperative growth.
This study assesses the Financial Performance of Villa Consuelo Tree Planters Agriculture Cooperative. Specifically, it seeks to;
1. Analyze the liquidity position of Villa Consuelo Tree Planters Agriculture Cooperative in terms of:
1.1. current ratio;
1.2. quick ratio; and
1.3. cash ratio.
2. Evaluate the efficiency of the Cooperative in utilizing its total assets in terms of:
2.1. total asset turnover ratio;
2.2. inventory turnover ratio; and
2.3. receivables turnover ratio.
3. Examine the profitability performance of the cooperative in terms of;
3.1. net profit margin; and
3.2. gross profit margin.
4. Design an Intervention Plan relevant to financial performance.
This section outlines the theoretical framework, which explains the path and foundation of the study.
This study is grounded in three theoretical frameworks: Financial Analysis Theory, Agency Theory and Stakeholder Theory.
Theoretical framework. This section indicates the theories that guide the study about Assessing the Financial Performance of Villa Consuelo Tree Planters Agriculture Cooperative from three theories, namely: "Financial Ratio Analysis Theory" (Graham, 1990), Agency Theory" (Hendrastuti & Harahap, 2023), and "Stakeholder Theory" (R. Edward Freedman, 1984)
Financial Ratio Analysis Theory (Graham, 1990) guided the evaluation of VITPACO's liquidity, profitability, and efficiency to assess its financial health. Agency Theory (Hendrastuti & Harahap, 2023) examined potential conflicts between management and members, particularly when financial decisions failed to benefit the cooperative's stakeholders. Stakeholder Theory (Freeman, 1984; Seven Pillars Institute, 2019) emphasizes the need to balance the interests of stakeholders, including members, employees, suppliers, and the broader community. Collectively, these theories explained the cooperative's financial performance, managerial accountability, and sustainability within a socially responsible framework.
