FINANCIAL ILLUSION: A CASE STUDY OF THE FINANCIAL POSITION OF AGRICULTURAL COOPERATIVES IN PATHUM THANI PROVINCE

Abstract

To successfully operate a cooperative, the cooperative executives need to have good management, financial planning and optimal fund allocation. This also includes not-too high risk taking. Thus, this research study aims to analyze the relationship of the funding capital structure and the performance of the agricultural cooperatives in PathumThani province. It can be used as a guideline for running the cooperatives in order to enhance their financial stability. The study used financial data of 8 cooperatives in PathumThani province in the fiscal year of 2010.
According to the findings, three out of the eight cooperatives: SiriRuam Sup Agricultural Cooperative Ltd., LadLumKaewPattanaAgricultural Cooperative Ltd.and PathumThani Agricultural Marketing Cooperative Ltd. are in a good status. Three cooperatives: Samkok Agricultural CoperativeLtd., Klongluang Agricultural CooperativeLtd.,and LumLukKa Agricultural Cooperative Ltd.are at risk; while two cooperatives: RuamjaipattanaSettakijChumchonSamkokCooperative Ltd. and MueangPathumThani Agricultural Cooperative Ltd. were found to be of suspicious status. Considering the overall picture, it can be said that 80.56% sources of funds of the eight cooperatives is the debt (deposits) with the debt to equity ratio (D/E) of3.49 times, which is considered a very high ratio. Therefore, the cooperatives executives as well as the cooperative committees need to be cautious about the financial risk and they should raise fund or decrease the proportion of loan balances to maintain appropriate levels of their funding capital structure.