Management Practices of Palcon Dairy Multi-Purpose Cooperative at Brgy. Concepcion Palasan Sariaya, Quezon and the Effect to Its Financial Performance for the Years 2009-2011

Abstract

The purpose of the study is to determine the management practices of Palcon Dairy Multi-Purpose Cooperative at Brgy. Concepcion PalasanSariaya, Quezon and the effect to its financial performance for the years 2009 to 2011. Specifically, the study aimed to answer queries, mainly about the cooperative profiles, in terms of organizational structure, physical structure and technical structure as well as its operation; the management practices in terms of membership, loan services and collection policy; the financial performance in terms of liquidity, profitability and stability; the effect of these management practices to the financial performance of the cooperative; and the problems that the cooperative deals with. The researchers used the descriptive type of research through a personal interview guided by a structured questionnaire enhanced by observation in the workplace and other data provided by the financial statements and various documents. Responses to the questions were presented, analyzed and interpreted. Furthermore, liquidity, profitability and stability were subjected to financial analysis. Palcon Dairy Multi-Purpose Cooperative has a line and staff type of organization with the General Assembly as the highest policy making body. The cooperative requires the aspiring members to have at least one milking cow in order to be part of the organization. PDMPC basically focuses on three types of services, which includes dairy products, consumer store and loan services. For the dairy products, PDMPC is just a producer. The members supply cow’s milk every morning in the cooperative and they will be paid for the liters of milk they’ve supplied. KKMI will pick up the milk to the cooperative; P1.00 will be deducted and will serve as the additional contribution of the member. On the other hand, consumer stores only sell basic commodities exclusively for members. Basic commodities include the canned goods, rope, feeds for the cow, rice, LPG and some other. They also accept credit that is payable within a week. Furthermore, PDMPC has three types of loans, such as regular loan, emergency loan and financing loan. The amount of loan that the members can avail depends on their share capital and the number of milking cows they own. The researchers, with all the studies that have been conducted, recommend that the cooperative has to standardize their organizational structure. PDMPC should maintain the quality of the produced milk as they help in producing global fresh milks with the help of Philippine Dairy Corporation, Cooperative Dairy Technician. High-tech equipment such as the chilling tank and milk tester are of great help to the avoidance of spoilage of milk. They also need to organize the store to make it more appealing to the customers. In order to avoid delayed payments, strong collection especially to the non-milkers must be observed by the cooperative. As to the cooperative’s financial performance, PDMPC has a poor financial status in 2010 as compared with the other years. With regards to the profitability, the cooperative is still profitable but according to the observation, there is a tendency that their financial status drops down. When it comes to the liquidity, it is evidently seen that PDMPC is liquid due to the higher ratio of liquidity though it drops down a little in 2010. Finally, the cooperative is financially stable because of the lower reliance to debt as computed in the debt/equity ratio. The cooperative provided higher margin of safety as to its creditors. In lieu of these findings, it was evident that the management practices do affect the financial performances of the PDMPC.