This ratio fell from 5.2 to 3.8 in 1999. While there is no current crisis, the leverage ratio points to a situation where cooperatives are leveraging themselves at a time when their businesses are beginning to show some financial stress. Activity ratios look at how well the cooperative uses its assets. Again, cooperatives are finding activity ratios sliding. This represents the amount of revenue generated by each dollar invested in local assets.
Local assets are total assets less investment in other cooperatives.
This seems to indicate that revenues are not keeping pace with the growth in the cooperative's assets. These ratios indicate cooperatives are losing efficiency in their asset use. In other words, cooperatives are increasing the amount of assets they hold but these assets are not generating the revenues they once did. Profitability ratios, while limited as an absolute indicator, do provide a view of financial strength for the cooperative. We have already seen that cooperatives were less profitable and efficient with their assets.