Initial results of trend analysis of key CFC ratios for 2021 demonstrate financial strength of cooperatives
DULLES, Va., June 17, 2022 (GLOBE NEWSWIRE) — The National Rural Utilities Cooperative Finance Corporation (CFC) has analyzed preliminary data from its 2021 Key Ratio Trend Analysis (KRTA) report, an annual assessment of electric utility financial trends. nationwide cooperatives. The results show that the electric cooperatives have maintained strong financial metrics and are growing across a number of metrics, including consumers, sales, margins and utility facilities.
“The disciplined management of rural electricity distribution cooperatives and their focus on improving the quality of life of the communities they serve is a testament to the cooperative business model,” said Brad Captain, Senior Vice President and Chief Business Officer general CFCs.
Financial performance has been strong year over year, as evidenced by coverage ratios, which assess the ability to repay debt, and equity levels. The interest earned ratio (TIER) and equity as a percentage of assets continued their upward trend. The TIER increased from 2.80 to 2.95 while equity as a percentage of assets also increased to 45.97% from 45.80% in 2020.
Consumption growth topped 1%, the highest in more than a decade, with nearly 93% of co-ops posting increases, including notable pockets of consumption growth above 2% in Arizona, California , Idaho, Nevada and Utah.
Investment in utility facilities also maintained its four-year growth trend, as evidenced by an increase in the total utility facility ratio, which increased to 3.95% in 2021 from 3.79%. in 2020. including renewable energy and fiber, to ensure they provide their consumers with reliable, affordable and sustainable electricity in the future,” said Mark Snowden, Senior Vice President of Strategic Services at CFC .
In another positive sign, after a slight increase in 2020, accounts receivable over 60 days and write-offs have returned to pre-pandemic levels. Accounts receivable fell to 0.09% of operating revenue from 0.13% in 2020, and write-offs fell to 0.07% of revenue from 0.08% in 2020.
KRTA’s preliminary results are based on data submitted by 812 electricity distribution cooperatives for the year ending December 31, 2021. CFC calculates 145 financial and operational ratios for each cooperative and provides a report showing the ratio of the cooperative compared to the US median. Median ratios minimize the effect of outliers and provide a clearer picture of cooperative performance.
Created and owned by the U.S. Electric Cooperative Network, the National Rural Utilities Cooperative Finance Corporation (CFC) – a nonprofit financial cooperative with $30 billion in assets – provides unparalleled expertise, flexibility and responsiveness in the industry to meet the needs of our member-owners. CFC is an equal opportunity provider. Visit us online at www.nrucfc.coop.
Since 1975, the CFC has published KRTA, an annual report that tracks the median value of 145 financial and operational ratios for participating electricity distribution cooperatives over the past five years. Based on unverified data reported by electricity distribution cooperatives, KRTA provides CEOs and administrators of electricity cooperatives/trustees with a complete picture of the financial performance of their system.
Corporate Relations Group