The Year in Review

Editor's Note: Beginning with this issue, we will be using the traditional cooperative term "surplus" rather than "profit." This is to remind us that the wealth generated by our store is a surplus over and above operating expenses that is reinvested in the store and rebated to the member-owners based on their patronage. It is not the kind of profit that builds personal wealth, but a communal resource that ensures our cooperative's future and goes back into our community.

Sales for the year ending June 30, 1996 were $9,321,242. This is a 12.3% increase over last year. This is the lowest level of growth since we opened the new store in 1992. Most of this growth occurred in the first 6 months. We saw 23% growth in the first qtr, 20.1 % in the 2nd qtr, 6.5% in the 3rd qtr, and 2.5% in the last qtr. Our expenses increased 22.5% over last year, or about twice as much as our sales.

Our Cost of Goods went down, to only 63.5%. This means that for every dollar in sales, it cost us 63.5 cents to buy the item that was sold. COG and Gross Profit together equal 100%, so our gross profit went up to 36.5%. That means we had 36.5 cents from each dollar to pay all other expenses.

Expenses: We paid 1.5 million dollars in wages this year. This is a 19.5% increase, which means we spent $245,891 more than last year. We paid 595,811 in payroll taxes and benefits. Our total payroll related costs were 22.5% of sales. After paying for payroll, we have 14 cents from every dollar to pay all remaining expenses.

We paid almost $34,000 to produce and mail the newsletter. We gave out $101,337 in member discounts! This is up from $60,347 last year; an increase of 68%. We paid $43,505 in Real Estate Taxes, $20,034 in Interest Payments, $28,187 in Equip Repair, and a whopping $29,298 in credit card processing and bank fees. Last year's banking fees were $10,931. Incidentally, it costs the Wedge 10 times as much to process credit cards as checks. All told, our Operating Expenses were $2,872,167. That leaves us $532,699, or 5.7% of sales, in Operating Profit. From this we pay Income Taxes and Rebate, and our Net Profit is 2.8%, or $259,000.

We paid $180,844 in Income Taxes, down from $219,011 last year. The main reason for this decrease is that we made less money than last year. However, the increase in member sales contributed too. If we had maintained the same % of member sales, 35%, instead of 44%, our taxes would have been $8,000 higher, and the Rebate would be $20,000 lower. Also, the total Rebate of $114,375, saved us $50,000 in Taxes. Our combined Federal and State Tax rate was 41%.

Speaking of Rebates, this year's total is $114,375. Members did 43.84% of shopping, so we are allocating 43.84% of profit to Patronage Rebates. 25% of the rebate will be distributed as cash, for a total of $28,594. The average rebate, figured by dividing the cash portion by the # of members, will be 10% return on the $80.00 stock investment. When added to the discounts, member-owners got an average 44.7% return on their investment.

Current Assets increased very slightly, under $29,000. Fixed Assets decreased about $50,000. We did purchase about $38,000 worth of equip during the year, and our depreciation write off totaled $87,000. There is a large increase in the category "Other Assets". This is primarily all the property that we purchased for the expansion, but was not "in use" as of June 30. By the end of the current fiscal year this will show up in Fixed Assets.

Current Liabilities increased by $122,000 over last year. Most of this is a $100,000 loan we got from the bank to help in all the property acquisitions. Long Term debt decreased by $80,000, but this, of course, will be growing again with the expansion. Equity increased by $407,00, of which $91,000 was an increase in member-owner stock, and $259,000 was our Net Surplus.