Financial Performance of Multipurpose Primary Cooperatives in Hababo Guduru District of Oromia Regional State, Ethiopia

Gezahegn Legesse Wayessa^1, , Amsalu Mitiku Bora¹ and Alemayehu Oljira¹

¹Jimma University College of Agriculture and Veterinary medicine, Jimma, Ethiopia

Cite this paper:
Gezahegn Legesse Wayessa, Amsalu Mitiku Bora and Alemayehu Oljira. Financial Performance of Multipurpose Primary Cooperatives in Hababo Guduru District of Oromia Regional State, Ethiopia. Journal of Applied Agricultural Economics and Policy Analysis. 2021; 4(1):34-39. doi: 10.12691/jaaepa-4-1-4

Abstract

In developing countries like Ethiopia Multipurpose primary cooperatives are an ideal means for self-reliance, higher productivity level and promotion of agricultural development, hence, this study aims to analyze financial performance of multipurpose primary cooperatives in Hababo Guduru district, Oromia Regional State, Ethiopia. Secondary data were used for this study. Secondary data (audit reports of primary cooperatives) of years 2016/17, 2017/18 and 2018/19 was also used to examine the financial performance of the sampled cooperatives. Financial Ratios were analyzed using the three years financial data 2016/17, 2017/18 and 2018/19 the liquidity analysis showed that the cooperatives under investigation were below the satisfactory rate (current ratio of less than 2.00). The financial leverage ratio (debt ratio) showed that the cooperatives under investigation used financial leverage (financed more of their total asset with creditors’ fund).The profitability ratio of the cooperatives were weak. The cooperatives return on asset below the interest rate the financial institution extends credit (7%). Therefore, different recommendations supposed to improve the over financial performance of Multipurpose Primary Cooperative in Hababo Guduru, Oromia regional state of Ethiopia were recommended in this study.

Keywords:
multipurpose primary cooperative liquidity ratio financial leverage management ration and profitability ratio

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