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A Dynamic And Static View Of The Financial Security Of Dairy Cooperatives

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  • WASILEWSKI, MIROSŁAW
  • GANC, MARZENA

Abstract

The aim of the research was to identify and assess the dynamic and static dimension of the financial security of dairy cooperatives in the area of liquidity. Cooperatives with a higher equity value than average and with a cash flow statement were purposively selected. The final research sample included 20 dairy cooperatives. The research period covered the period from 2017 to 2019. Statistically speaking, dairy cooperatives are generally financially secure as a result of the specific nature of their business, which is geared towards benefiting their members – milk suppliers – through timely payments for raw material delivered. Most of the entities studied were characterised by over-liquidity in static terms, which should be assessed favourably from the perspective of the cooperative form of management. In dynamic terms, however, not all entities were characterised by favourable values of cash productivity ratios. Static liquidity measures do not provide a complete and transparent picture of the financial security of dairy cooperatives and should be considered both static and dynamic. Only an interpretation of the two dimensions of liquidity indicators will allow an effective interpretation of this issue in relation to dairy cooperatives. Moreover, when assessing liquidity, account should be taken of the specificities of cooperative management activities, where static measures in this area are above literature standards, while dynamic liquidity measures do not always reach satisfactory volumes.

Suggested Citation

  • Wasilewski, Mirosław & Ganc, Marzena, 2021. "A Dynamic And Static View Of The Financial Security Of Dairy Cooperatives," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2021(2).
    • Handle: RePEc:ags:paaero:324094
    DOI: 10.22004/ag.econ.324094
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    References listed on IDEAS

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    1. Ganc, Marzena, 2018. "Level of the current liquidity ratio versus financial efficiency of dairy cooperatives," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 276386, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    2. Kim, Chang-Soo & Mauer, David C. & Sherman, Ann E., 1998. "The Determinants of Corporate Liquidity: Theory and Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 33(3), pages 335-359, September.
    3. Johnson, Timothy C., 2006. "Dynamic liquidity in endowment economies," Journal of Financial Economics, Elsevier, vol. 80(3), pages 531-562, June.
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    Keywords

    Agribusiness; Agricultural Finance;

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