As a cooperative, our finances are public. Annually, the Co-op releases two pieces of information about its financial health. One is the Balance Sheet, the other is the Profit and Loss statement from the current year. Previous year is typically included in annual reports for context.
Finances for the store are prepared by staff and reviewed monthly by the Board’s Finance and Audit Committee (FAC). Maryland State Cooperative laws dictate that the Board authorize a financial audit once every two years and a financial review annually. Finances are reviewed or audited at the end of each financial year (July 1 through June 30), and these financial documents are released post-audit, typically around September as a part of the Annual Report.
Budget - A budget is prepared annually by the General Manager to account for profit and loss of the store, governed by policy L5 in the Policy Register. The Board votes to accept this budget, which becomes the basis for monthly FAC reports on annual progress.
Profit and Loss Statement - Shows annual revenue and expenses for the store, resulting in net income or loss at the end of each year.
Balance Sheet - Shows the assets of the Co-op on one particular day, typically the end of a financial period. Includes cash, member equity, physical assets along with debts and liabilities.
2020 Summary
Budget - Due to the effects of the pandemic, budgeted goals of sales and profit were not achieved.
Profit and Loss - Sales declined roughly 10% compared to 2019 due to severe income loss when the store pivoted to online-only between March 23rd and June 12th 2020. The store posted a $148k operational loss.
Balance Sheet - The Co-op has assets totaling $4,025,931, including $3,210,774 in cash. Non-cash assets include inventory and equipment among others. Total liabilities are $638,023.
Of the $3,210,774 in cash, $1,377,653 is member equity payments that cannot be spent by the Co-op. They need to be available for members leaving the Co-op and requesting a refund of their equity payment. The remaining $1,833,121 is profit built up over years to cover operating losses such as 2020, and pay for business improvements.
$500,000 of these funds will need to be spent to match the $500,000 State Historic Grant the Co-op received in 2017 from Maryland to improve the building and aging equipment. Matching dollar for dollar funds is a requirement of the grant. $150,000 of funds is also promised to the second elevator in the future Takoma Junction development in the Cooperation Agreement with Neighborhood Development Company.