What is Equity?
Membership Benefits
A good investment
When you become a member-owner of Co-op, you are making a sound business investment in a community organization that provides both economic and social benefits. Your Co-op is an attractive alternative to chain stores and private business because you're the owner and the profits belong to you. That is why retail co-ops refer to their profits as "savings". Savings are distributed to each member-owner based on his or her patronage. And the more patronage a co-op receives, the greater the savings it can generate for its member-owners.
How it works
To illustrate how your investment in the Co-op grows, let's look at one member's transactions with the Co-op over a year.
John Doe invested $10 to become a member of the Co-op. This $10 was credited to John's equity account, identified by his new Co-op number. Each time he made a purchase at any of the Co-op's locations, the amount was recorded on his patronage record.
At the end of the year, the Co-op's financial statement showed a net profit and the Board decided to return a patronage refund to the member-owners. John's patronage record shows that his share of the Co-op's savings for the year amounted to $950.
Patronage Record
|
Location |
Purchases |
Refund |
Amount |
|
Petroleum |
$5,000 |
8% |
$400 |
|
Food |
$5,000 |
5% |
$250 |
|
Appliances |
$3,000 |
5% |
$150 |
|
Agro Centre - Other |
$5,000 |
3% |
$150 |
|
$18,000 |
$950 |
Name: John Doe
Membership Number: 2055
The purchases John Doe made from the Food Centres totaled $5,000. His share of the savings generated in that department, at 5%, would be $250. In the same manner, his share of the savings from other departments is calculated and a total of $950 is allocated to him as a patronage refund in the form of additional shares.
John's initial investment of $10 has grown as a result of his patronage of his Co-op. The Board also decided that the Co-op could pay out a cash patronage refund to the members. In essence, the Co-op is repurchasing those shares from John Doe. On average, the Co-op returns 20% back to the member on current year purchases and 3% on accumulated equity from previous years. The balance in John Doe's share account is now $768 calculated as follows:
Equity Record
|
Dr. |
Cr. |
Balance |
|
|
Day 1: |
$10 |
$10 |
|
|
One year later: |
$950 |
$960 |
|
|
Co-op's year end: |
$192 |
$768 |
Name: John Doe
Membership Number: 55
It's still John's money
If John should move away, or when he reaches the age of 70, or if he should die, his equity in the Co-op will be repaid in full.
Apply today!
Fill out an application form at any of our locations and start saving $$$ through your own business!
***Co-op is mandated by Federal Law to retain 15% of your equity allocation over $100, and submit it to the Federal Government as prepaid income tax. You then claim it back on your income tax return to receive this money.