Aboriginal Co-operatives in Canada - Centre for the Study of Co ...

to other consumer co-ops.It was also found that the sales-to-assets ratio for all consumer co-ops (Aboriginal and non-Aboriginal) was lower than the one prevalent in “private” industry 23 . This finding does notnecessarily translate into (socio-economic) inefficiency of the consumer co-ops. Pricingstrategies are implicitly included when we use the sales figures in the computation of the ratio.Lower sales-to-asset ratios of consumer co-ops can therefore be the result of pricing strategies byco-operatives that aim to meet a minimum margin (thus, allowing the member to benefit from lowprices).5.8 Equity per MemberFigure 5.10 Value of Equity per Member in a ConsumerCo-op: Aboriginal Vs AllThe value of equity expresses4,000the liability that a company3,5123,500has regarding its shareholders.3,0002,8433,1373,064It is an important indicator2,5002,416because it sheds light on the2,000capacity of the firm to financeits future investments andoperations. In 1997, the value1,5001,0005006656856766606150of equity for the average1993 1994 1995 1996 1997YearsAboriginal consumer co-opwas equal to $1.2 million andAll Consumer Aboriginal Consumer$3.2 million for the average consumer co-op. Since the average consumer co-op has moremembers (5187 members in 1997) than the average Aboriginal co-op (399 members in 1997), thisdifference is not surprising. However, when we compare the amount of equity per member, itappears that members of Aboriginal consumer co-ops have more equity. In 1997, the equity permember in an Aboriginal consumer co-op was almost five times greater than the equity permember in a consumer co-op. The Aboriginal co-op (especially in small communities in the$ per Member23 Harris, A. and M. Fulton (1996) used an average sales-to-asset ratio of 4.11 for the retail industrybetween 1987 and 1993. This ratio was calculated for the retail grocers with total assets greater than$250,000 and less than $1,000,000. For firms with assets of more than $1,000,000 the average ratio wasequal to 4.69 between 1989 and 1993. These figures were obtained from the Canadian industry normspublished by Dunn & Bradstreet.103