THE READER
January 2005

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Cover

Customer Comments

GM Report

Board Report

Health & Wellness News: A Basic Hemp Primer and Progress Report

Juice Bar & Bakery News: Maintaining Your Health through Juicing

Deli News: A Fiberiffic Feast

Produce News: Root Vegetables

Book News:
Fiber Titles

Specials Information

Recipes & Drink Recommendations

Ask the Midwife: Urinary Tract Infections

A Rough Guide to Dietary Fiber

Producer Profile: Maggie's Functional Organics

An Open Letter from the Northside Community
Co-op

The 16th Annual Upper Midwest Organic Farming

Community Calendar

Board Report
Annual Audit Results

by Megan Christiansen, WSGC Board Member

Each year, the Board engages an audit firm to examine the Co-op’s financial operations. This annual audit serves three important purposes. First, it offers us reasonable assurance that our financial statements are accurate and are fairly presented in accordance with generally accepted accounting principles. Second, the audit gives us a picture of our current financial health. And third, the auditors offer us some recommendations for things to consider during the upcoming year.
The Board reviewed the fiscal year 2004 audit with the auditors during our meeting on December 7th. The auditors expressed their opinion that our financial records were properly prepared and accurately reflect our financial situation.

Key indicators of our financial position
Anyone who walks into our store can see that we operate a healthy and thriving business. This fact is also made clear in our financial statements. Here are some of the key indicators of our financial position:

• The Co-op again showed rapid growth in 2004, with sales increasing from $10 million to $11.8 million.

• Our gross profit margin is 33.54% (down from our 2003 margin of 34.08%). Most other stores operate
with higher margins of 36% to 40%. A lower profit margin indicates that shelf prices are being kept to a minimum, which allows us to provide our members with more affordable groceries.

• Average days to sell (ADTS) is the number of days it takes before the entire inventory of the store is sold
and replaced. Most grocery stores operate with an ADTS of 16 to 18 days. Our inventory turns over in just under twelve days. The lower the ADTS, the more space we need in the store—both on the floor and in the back—to hold enough product to keep the shelves stocked. Our low ADTS indicates that we are very near our sales capacity at the current site.

• The balance sheet also shows that the Co-op has a healthy cash reserve and an excellent asset to debt
ratio, which are both very important as the new off-site kitchen is outfitted and we continue working on other expansion plans that will require significant capital outlays.

This leads me to note the auditor’s recommendations that we take steps now to make sure we will have the necessary infrastructure in place to support the Co-op as we grow. This includes staffing and compensation levels, and administrative space.

Looking forward
We made significant progress on expansion planning during fiscal year 2004, including gaining member approval for the soon to open off-site kitchen and a second store in the Monroe Street neighborhood. Planning for the second store continues, as does planning to enlarge our current site. As we continue to work on these projects in 2005, we can rest assured that the Co-op is well positioned financially to undertake them. Indeed, the last year has brought us even closer to maximum capacity at our store, which is a very strong incentive to continue to expand. These certainly are exciting times.