Sources of Financial Stress in Agricultural Cooperatives
No hay miniatura disponible
Fecha
Título de la revista
ISSN de la revista
Título del volumen
Editor
Resumen
Descripción
Financial stress in agricultural cooperatives may be due to a combination of three factors:
inadequate profitability, excessive debt, or high interest rates. This paper uses an analytical technique
to determine the relative degree of financial stress in agricultural cooperatives attributable
to each factor. Roughly 30 percent of agricultural cooperatives in our sample suffered financial
stress from 1987 through 1992. The analysis indicates that the greatest portion of financial
stress, 54 percent, originated from low earnings. High interest rates accounted for roughly 24
percent of the financial stress while leverage accounts for the remaining 22 percent. The results
also indicate that smaller cooperatives are more than twice as likely to face financial stress than
larger cooperatives. Small cooperatives are more likely to face profitability problems whereas
large cooperatives are more likely to face debt and interest rate problems.